May 17th, 2013
in Gary's blogging
Opening Market Commentary For 05-17-2013
Premarkets were up +0.30% without any US financial reporting this morning.
Markets opened up as expected and moved up to +0.50% in the first several minutes as volume started to fall from moderate to low. Several notable gaps were made on the opening where the NASDAQ made a 16 point gap that remains open.
The 9:55 am U. of Michigan and US leading indicators reports came in at 83.7 and 6.0% respectively while analysts were expecting 77.9 and +0.2%.
The averages started to melt down almost immediately from the opening bell and then dramatically started to rise after the mornings US financial reports.
At 10 am the averages had risen up to the previous highs (or near them) and paused on low volume numbers unable at this time to push any further higher.
I wouldn't say the uptrend is strong and solid, maybe moderate and steady, otherwise I agree with Leavitt's assessment below. I would further characterize this market as one that is mature and starting to show show signs of weakness, but that is just my opinion.
The uptrend is solid and strong, but I’m not interested in initiating new positions. The market needs to rest. It’s come too far too fast, and the risk/rewards are not very favorable. Plus there aren’t many good set ups anyways. I’ve looked at hundreds of charts the last two days and don’t see much worth playing. That’s just the way it goes.
Right now I’m just playing good defense with the positions I have. Otherwise it’s waiting time…waiting for the market to re-set.
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 10:15 is at 15291 up 58 or 0.38%.
The SP500 is at 1659 up 9 or 0.55%.
SPY is at 166.23 up 1 or 0.55%.
The $RUT is at 991.81 up 6 or 0.66%.
NASDAQ is at 3484 up 19 or 0.54%.
NASDAQ 100 is at 3015 up 16 or 0.53%.
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 94.80 and 96.43 today. The session bias is bullish and is currently trading up at 96.09.
Brent crude is trading between 103.35 and 104.87 today. The session bias is bullish and is currently trading up at 104.72.
Gold fell from 1386.95 earlier to 1364.63 and is currently trading down at 1368.25.
Dr. Copper is at 3.327 rising from 3.281 earlier.
The US dollar is trading between 83.87 and 84.50 and is currently trading up at 84.41, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary