Opening Market Commentary For 07-23-2013
Markets opened up and quickly started to melt downward at a snails pace on low to moderate volume. Financial reporting this morning was negative and that was enough to keep investors at bay, for a while anyway.
By 10 am the direction for the small caps was negative and the large caps were holding their own, but sliding in a negative way.
Comcast internet really sucks, out all day yesterday starting at 9:25 am and today at 9:26. Now taking up residence at Starbucks and may move across the street to MCD (McDonalds) as their wifi is much faster, but the coffee sucks. Sorry for the late morning post.
The market keeps chugging along. After rallying 8 straight days, it dropped and has now closed up another 4 straight days. That’s 12 out of 13 up days, and 16 of 19. Heck of a run. It’s at times like these you can throw TA out the window. Trendlines aren’t very predictive, and overbought can stay overbought for a long time.
Don’t over-analyze. Most of the time simple breadth indicators are pretty good at picking off tops and bottoms and generally telling us what to expect and whether we should be aggressive or passive. But from time to time the market gets in a mode where it wants to do something, and it’s best not to stand in its way. Let the talking heads talk and debate and pound their chests when one of their predictions comes true. We should keep playing set ups and know the party won’t continue forever.
Trading continues to be a hit or miss situation and overnight trades seem to be the best although the most dangerous and subject to after hours 'Black Swans'.
The bear pundits are singing their song loudly and you know I have to agree, this market has gone to far too quickly.
Once they get the little guys to chase the market, Smart Money usually watches for the right time, and then starts selling into the rally.
When International Business Machines Corp. (IBM) and General Electric Company (GE) surge the day earnings are released, even though the companies actually reported lower revenues and forward projections were not increased, we have evidence of a giddy market driven by investors who are reacting to the news instead of paying attention to valuation.
Eventually this will change, and the writing is on the Wall.
The RRR** was narrow at the opening bell today and it doesn't look like it is going to expand any in today's session.
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.
The DOW at 10:45 is at 15562 up 20 or 0.12%.
The SP500 is at 1693 down 3 or -0.17%.
SPY is at 169.21 down 0.27 or -0.16%.
The $RUT is at 1052 down 1 or -0.11%.
NASDAQ is at 3585 down 15 or -0.41%.
NASDAQ 100 is at 3039 down 16 or 0.52%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is negative.
WTI oil is trading between 106.95 and 105.45 today. The session bias is bullish and is currently trading down at 106.83.
Brent crude is trading between 107.56 and 108.57 today. The session bias is positive and is currently trading sideways at 108.38.
Gold rose from 1326.12 earlier to 1333.18 and is currently trading down at 1332.25.
Dr. Copper is at 3.190 rising from 3.163 earlier.
The US dollar is trading between 82.46 and 82.17 and is currently trading down at 82.19, the bias is currently negative.
** RRR = Risk Reward Ratio
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Written by Gary