May 22nd, 2013
in Gary's blogging
Opening Market Commentary For 05-22-2013
Premarkets were up a 'tad' leading speculation of a bull run when the markets opened.
Markets did open up, but not in a spectacular fashion as the bulls and bears battled it out. It first appeared as if the markets were floundering until the higher than normal volume was noticed.
By 10 am the markets had melted up rapidly where the averages were setting new highs where the DOW was up 0.60% and the $RUT was up +0.70% and still going. Now is the time to be very cautious.
The market has a mind of its own says Leavitt. That doesn't mean laying down your analysis tools and ignoring them, it means that they are not quite adjusted to the 'new normal'.
. . . we also have to be careful about initiating new positions with the market being as stretched as it is.
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 and be careful how close you set your stops. As for shorting, it still may be too early to start picking out your best candidates, 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: Stays At 96% Unchanged From 96% 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 15504 up 116 or 0.76%.
The SP500 is at 1683 up 14 or 0.83%.
SPY is at 168.61 up 1.42 or 0.85%.
The $RUT is at 1007.11 up 8.33 or 0.83%.
NASDAQ is at 3527 up 25 or 0.72%.
NASDAQ 100 is at 3049 up 23 or 0.76%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is bullish.
WTI oil is trading between 96.19 and 94.70 today. The session bias is mixed but positive and is currently trading up at 95.86.
Brent crude is trading between 103.81 and 102.70 today. The session bias is mixed but positive and is currently trading up at 103.62.
Gold rose from 1371.09 earlier to 1412.99 and is currently trading up at 1409.55.
Dr. Copper is at 3.412 rising from 3.334 earlier.
The US dollar is trading between 84.05 and 83.52 and is currently trading down at 83.69, the bias is currently negative.
** RRR = Risk Reward Ratio
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Written by Gary