May 23rd, 2013
in Gary's blogging
Opening Market Commentary For 05-23-2013
Premarkets were down indicating a sizable gap on the opening for some indices. Not entirely surprising to see the markets open down after a negative session like yesterday, but do not be surprised if the averages shoot up sometime during this session to at least close the gaps.
Markets did gap down about 1% on the opening but the volume was anemic and didn't descend any further indicating an unsure investing crowd. By 10 am the averages were slowly recovering, but still very much in the red.
I do not think we will see much of a correction downward in the next several sessions as not much has changed in the World. Except for some cryptic language from the Fed yesterday that some pundits are claiming all sorts of market directions will not deter Mr. Market's bull run.
In fact, any gaps today almost assures the markets will close them on an upwards march in the very near future. Yes, more upside is in the cards, but it is becoming much harder to continue each time the averages melt up one more notch.
The RRR** has been narrow at the opening bell for the past several months and today was no exception. Overnight trades would have given the trader the best advantage for maximizing the RRR** but that requires a lot of guessing. This continuing trend of small intraday movements 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 15239 down 66 or -0.43%.
The SP500 is at 1645 down 10 or -0.63%.
SPY is at 164.80 down 1 or -0.68%.
The $RUT is at 976.44 down 6 or -0.59%.
NASDAQ is at 3447 down 17 or -0.49%.
NASDAQ 100 is at 2986 down 13 or 0.45%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is slightly positive.
WTI oil is trading between 94.22 and 92.28 today. The session bias is bearish and is currently trading down at 92.36.
Brent crude is trading between 102.62 and 100.62 today. The session bias is bearish and is currently trading down at 100.78.
Gold rose from 1355.46 earlier to 1396.87 and is currently trading down at 1381.35.
Dr. Copper is at 3.276 falling from 3.368 earlier.
The US dollar is trading between 84.59 and 83.80 and is currently trading up at 83.98, the bias is currently negative.
** RRR = Risk Reward Ratio
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Written by Gary
Written by Gary