May 7th, 2013
in Gary's blogging
Opening Market Commentary For 05-07-2013
Premarkets were surprising up this morning about 0.25%. There wasn't a scrap of good news anywhere as the French industrial production came in considerably lower than expected, the Euro is falling apart and the US didn't report anything this morning. Yet, the futures were up in what appeared to be an anomaly and was confusing to investors.
The markets did open up on relatively heavy volume switching back and forth between buyers and sellers and melting upwards setting new historical highs along the way. By 10 am the markets started to decline down to yesterday's session's closing numbers and 15 minutes later started melting back up once again. This is a scary market!
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and it was this morning. It appears investors are having nothing to do with the session’s gyrations this morning This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. As of right now, it is too late to jump in to catch the highs, safely anyway. As for shorting it may be too early to start shorting, close, but I feel you will not have to wait much longer.
As long as market volume remains light or the trading range is narrow, one can expect successful, or at least profitable, trading to remain elusive. The RRR** has been wider on some volatile sessions lately and is expected to become more so as 2013 enters the second quarter, unfortunately a lot of guessing remains. Correctly 'guessing', of course, is the tricky part of the successful trading equation. Any trades today will probably end up on the meager side of profitability if you are lucky as most trades have been less than optimal during the past several years.
I also have continuing issues with some pundits, writing almost every day, that there are setups for day trading. Best Stock Market Indicator Ever: Rises to 92% up From 87% and Secondaries Confirm "Tradable" This might be true, but still above 60% where I think it should be! Hard to believe and challenging to deal with considering 'not so good' current events. There is a wedge between perception and reality going on right now where the reality doesn't match this bull run.
The trading range has been so narrow that way too much money has to be put on the table just to get back meager gains. Do not fall into the trap of money burning a hole in your pocket, sit tight better days are coming. I keep hoping for increasing volumes to signal improved trading.
Swing trading is also at your own risk for all the reasons mentioned above although guessing overnight trades would have been most profitable over the past year. Again, guessing where the market is going to be tomorrow or next week, at this time anyway, can be a foolish and costly endeavor.
The DOW at 10:30 is at 14997 up 28 or 0.19%.
The SP500 is at 1619 up 2 or 0.13%.
SPY is at 161.98 up 0.22 or 0.13%.
The $RUT is at 961.39 up 1.62 or 0.17%.
NASDAQ is at 3390 down 2 or -0.07%.
NASDAQ 100 is at 2952 down 3 or -0.11%. (A lot of analysts are currently watching the 100 for a heads and shoulder formation.)
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is positive.
WTI oil is trading between 96.27 and 94.45 today. The session bias is bearish and is currently trading down at 95.22.
Brent crude is trading between 105.94 and 104.73 today. The session bias is bearish and is currently trading up at 105.14.
Gold fell from 1466.08 earlier to 1440.55 and is currently trading up at 1447.55.
Dr. Copper is at 3.286 falling from 3.344 earlier.
The US dollar traded between 82.39 and 82.12 this morning and is currently trading up at 82.36, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary