May 16th, 2013
in Gary's blogging
Midday Market Commentary For 05-16-2013
The averages tried unsuccessfully to plow ahead this morning and have instead backed off recent highs to a more sedate, anemic volume, slide back to 'flat' status. The small caps have remained in the green all morning with the DOW just recently joining them.
By 1 pm the indices were back to flat status and directionless. Difficult to guess where Mr. Market is going next so long as the 'sheeples' are still wanting to buy. Savvy investors appear to be sitting on their hands awaiting the next 'signal'.
The 'Greek', Mr. Kaminis, at WallStreetGreek says, “Traders are Smoking Crack” and “Traders are Insane Buying this Market” and I agree. There is nothing wrong with riding out a bull market, but lately the negative US stats and the European basket case issues (9 of the 17 members are in a recession) just do not coincide with the euphoria the markets are appearing to enjoy lately. I am very sceptically of the markets bullish outcome and I am not the only one.
'The market is clearly in idiot mode. I am not calling a top, but I am not as interested in going long. The risk/rewards just aren’t very favorable.”
Bret Jensen wrote in 'Getting Drunk On The Punch':
“Color me skeptical, but I believe we are just inflating the next bubble that will eventually pop with a massive bang.
I also have my doubts that an institution that has been responsible for several bubbles over the last two decades, which missed the buildup of the housing bubble completely and started the subprime crisis, was "contained." That it can be trusted to manage a $4 trillion balance sheet effectively is a bit farfetched.”
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and it looks like it is going to be this way all week, like last week. 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, 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 96% up From 92% 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 1:15 is at 15280 up 5 or 0.03%.
The SP500 is at 1657 down 1 or -0.07%.
SPY is at 166.04 down 0.07 or -0.04%.
The $RUT is at 988.24 down 0.30 or -0.03%.
NASDAQ is at 3477 up 5 or 0.15%.
NASDAQ 100 is at 3009 up 7 or 0.23%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is slightly negative.
WTI oil is trading between 93.28 and 95.55 today. The session bias is bullish and is currently trading down at 94.91.
Brent crude is trading between 102.74 and 104.28 today. The session bias is bearish and is currently trading down at 103.83.
Gold rose from 1368.16 earlier to 1395.40 and is currently trading down at 1384.35.
Dr. Copper is at 3.297 rose from 3.232 earlier.
The US dollar is trading between 84.12 and 83.57 and is currently trading down at 83.76, the bias is currently bearish.
** RRR = Risk Reward Ratio
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Written by Gary