May 29th, 2013
in Gary's blogging
Opening Market Commentary For 05-29-2013
Premarkets were down a half a percentage and not surprising as most investors are leery of any market advances and expect the markets to turn down at any time. I think that is a bit premature, but I agree that it would take a monstrous black swan to send Mr. Market in a tail-spin either.
The markets did open down -0.50% to -0.80% and with low to moderate volume and trading sideways.
Everyday I give the same advise below and it is getting to be monotonous as some have pointed out. The problem with being a conservative trader is that you have to pick your trading days with the least amount of risk which is most difficult lately. The test is when you can define a trading day on the day before which hasn't been possible for over a year, so I again repeat my caution to you.
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 10:15 is at 15321 down 88 or -0.57%.
The SP500 is at 1651 down 9 or -0.54%.
SPY is at 165.52 down 0.77 or -0.46%.
The $RUT is at 990.00 down 7 or -0.73%.
NASDAQ is at 3473 down 15 or -0.44%.
NASDAQ 100 is at 2998 down 13 or -0.44%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is sideways.
WTI oil is trading between 94.10 and 95.22 today. The session bias was bullish and appears to be turning negative and is currently trading sideways at 94.82.
Brent crude is trading between 104.37 and 103.63 today. The session bias is negative and is currently trading down at 104.08.
Gold fell from 1394.30 earlier to 1380.49 and is currently trading down at 1383.85.
Dr. Copper is at 3.281 falling from 3.318 earlier.
The US dollar is trading between 84.43 and 83.54 and is currently trading down at 83.70, the bias is currently bearish.
** RRR = Risk Reward Ratio
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Written by Gary