Markets Open Up, Small Cap Lag, Heavy Volume

June 3rd, 2013
in Gary's blogging

Opening Market Commentary For 06-03-2013

Premarket was up +0.25% and I was hoping that today, first trading day of the month and Monday, might be a volatile one by alas by 9:40 it was apparent that if anything was going to happen it wouldn't be until later.

By 10 the markets were sea-sawing in a very tight range mostly in the green, but flat. The DOW was up +0.50% while the small caps lagged behind at -0.05%.

Follow up:

Proprietary indicators pointed to an up day, but the averages were spread up indiscriminately making it impossible to determine direction. Volume is on the heavy side with a hint of green but the markets are in great indecision this morning. Probably not a good time to 'guess' which way things are going to go.

The RRR** has was narrow at the opening bell today and it doesn't look like it is going to expand any in today's session. It has been like this 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 of low volume and narrow trading sessions makes predictions of session movements nearly impossible, thus making trading futile and unprofitable.

As of right now, it is too late to jump in to catch the highs, safely anyway. Traders need to be especially cautious how close you set your stops as we have seen lately several corrections that unnecessarily wiped out a lot of investment profits. 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 continually, that there are good setups for day trading. Best Stock Market Indicator Ever: Slips To 93% Down From 95% 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 15215 up 99 or 0.65%.

The SP500 is at 1636 up 6 or 0.40%.

SPY is at 164.13 up 0.70 or 0.43%.

The $RUT is at 991.60 up 7 or 0.76%.

NASDAQ is at 3461 up 4 or 0.12%.

NASDAQ 100 is at 2984 up 2 or 0.07%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been sideways and the current bias is mixed.

How Oil Really Gets Priced

WTI oil is trading between 91.37 and 93.19 today. The session bias is bullish and is currently trading up at 92.94.

More Widening For The Brent/WTI Spread ahead?

Brent crude is trading between 99.69 and 102.28 today. The session bias is bullish and is currently trading up at 101.98.

Gold rose from 1384.54 earlier to 1406.48 and is currently trading up at 1403.35.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.316 falling from 3.347 earlier.

The US dollar is trading between 83.41 and 83.02 and is currently trading down at 83.05, the bias is currently bearish.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

Written by Gary















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