May 28th, 2013
in Gary's blogging
Opening Market Commentary For 05-28-2013
Premarkets were up +0.75% indicating a gap up at the opening for the cash crowd and was bolstered by a better than expected Case-Shiller report.
Markets did open and the major indices inched up to +1.25% in the first few minutes on moderate volume leaving some notable gaps. By 10 am the $RUT had risen to 1.57%, the DOW at +1.09 and the 500 to +1.21%.
The morning report was indeed good, but it remains to be seen if the rest of the economy supports this.
9:19 AM More on Case-Shiller: Prices for the 20-city composite rose 10.9% Y/Y, with all 20 cities posting gains, and 12 out of 20 garnering double-digit increases.
Phoenix, San Francisco, and Las Vegas all had gains greater than 20%. NYC (2.6%), Cleveland (4.8%), and Boston (6.7%) trailed the pack. Nationally, prices are back to mid-2003 levels. (full report)
The S&P/Case-Shiller composite index of 20 major metropolitan areas shows home prices rose 1.4% on a non-seasonally adjusted basis in March, compared with the 0.7% gain economists were expecting. Prices were up 10.9% from the same month a year ago.
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: Falls To 95% Down 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 10:00 is at 15487 up 184 or 1.21%.
The SP500 is at 1672 up 23 or 1.39%.
SPY is at 167.54 up 2 or 1.39%.
The $RUT is at 1003.25 up 19 or 1.94%.
NASDAQ is at 3512 up 52 or 1.51%.
NASDAQ 100 is at 3035 up 43 or 1.44%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been neutral and the current bias is bullish.
WTI oil is trading between 93.53 and 95.91 today. The session bias is bullish and is currently trading down at 95.45.
Brent crude is trading between 102.48 and 104.70 today. The session bias is bullish and is currently trading down at 104.50.
Gold fell from 1396.00 earlier to 1375.44 and is currently trading down at 1379.25.
Dr. Copper is at 3.337 rising from 3.268 earlier.
The US dollar is trading between 83.71 and 84.07 and is currently trading down at 83.95, the bias is currently sideways.
** RRR = Risk Reward Ratio
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Written by Gary