May 30th, 2013
in Gary's blogging
Opening Market Commentary For 05-30-2013
Premarkets were up prior to the unemployment report that posted higher numbers. After the report the premarkets did melt lower but not enough to notice. The markets opened up fractionally on very low volume leading investors to believe this was going to be another lackluster, sideways moving session.
By 10 the averages had melted up close to yesterday's opening but not far enough to close the gaps left by the DOW, SP500 and others yesterday. I expect the averages to continue to melt up during the session baring any unexpected World event. The fear of a decline is still foremost in the minds of investors which reflect the moderate volume so anything could happen.
The financial reporting is 'not-so-good' yet this house of cards melts upward. Are you concerned yet? You should be, stay on your toes.
New claims for unemployment benefits rose to 354,000 last week from an upwardly-revised 344,000 the week prior. Claims were expected to hold steady at an initially-reported 340,000.
A second reading on U.S. gross domestic product showed the economy expanded at an annualized rate of 2.4% in the first quarter, down slightly from an initial estimate and Wall Street’s forecast of 2.5% growth.
There is serious note in the article below. If there is an escalation of waring parties this could be the Black Swan I have mentioned before. Any attack will probably happen at night there and a closed market here meaning you won't be able to protect your market positions until after the fact.
Two days ago we reported that the most recent escalation in the Syrian proxy war involved a bitter exchange between Russia and Israel. Israel warned Russia that it would proceed with destroying any arms shipments from them into Syria, specifically referencing the S-300 missiles that has been known to be en route to Damascus for several weeks now.
The Israel defense minister warned that: "The shipments haven't set out yet and I hope they won't. If they do arrive in Syria, God forbid, we'll know what to do." Well, according to Lebanese newspaper al-Akhbar not only has the shipment been sent out, but it has already arrived.
Check to Israel and coming through on its warning to begin an offensive action not only against Syria, but more importantly, implicitly against Russia.
The RRR** was narrow at the opening bell today and appears it will continue to be for the rest of today's session. This continuing trend of narrow movements makes predictions of session directions impossible making trading futile and unprofitable. As of right now, it is really 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 months.
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 problem trading today is that 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 15363 up 63 or 0.41%.
The SP500 is at 1656 up 8 or 0.48%.
SPY is at 165.96 up 0.68 or 0.42%.
The $RUT is at 992.19 up 5 or 0.52%.
NASDAQ is at 3485 up 18 or 0.52%.
NASDAQ 100 is at 3009.47 up 15 or 0.49%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is negative.
WTI oil is trading between 93.29 and 91.70 today. The session bias is bearish and is currently trading up at 92.42.
Brent crude is trading between 102.82 and 101.08 today. The session bias is bearish and is currently trading up at 101.41.
Gold rose from 1396.55 earlier to 1417.58 and is currently trading up at 1415.45.
Dr. Copper is at 3.317 rising from 3.258 earlier.
The US dollar is trading between 83.76 and 83.03 and is currently trading down at 83.03, the bias is currently bearish.
** RRR = Risk Reward Ratio
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Written by Gary