Opening Market Commentary For 07-31-2013
Premarkets were up until the morning financials started coming in. ADP employment was up, but the GPD second quarter was down and that brought the SP500 futures down -0,01% and sending the USD sky rocketing upwards.
But you needed not to panic as the futures made an abrupt 180 and were back up where they were up +0.50% by 9 am. However the USD didn't fall back (bearish) and investors are now worried what the Feds will say at the FOMC meeting today.
At the opening bell the averages were in the green and melting upwards with the large caps in the +0.30% and the small caps in the +0.50%. Volume remains low so watch your large block trades if you are brave enough to dip your toes into this market.
Back from a 2 day hiatus making a long weekend for celebrating my wife's birthday and fortunately I didn't miss too much at our casino market. I couldn't let her see me sneaking a peak at the smartphone for an update or two, so I wasn't completely out of the loop. (That's not really cheating is it?)
The RRR** was narrow at the opening bell today lie it was on Monday and Tuesday. It has been like this for the past several months, over a year actually, and we need some serious volume to change it. This continuing trend of low volume and narrow trading sessions makes predictions of session movements nearly impossible, thus making trading futile and unprofitable.
With all the financial uncertainty going on in the US and around the World, it is not a good time to jump in to catch anymore 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. Correctly 'guessing', of course, is the tricky part of the successful trading equation lately as TA is not of much use.
I also have continuing issues with some pundits, writing continually, that there are good setups for day trading. Best Stock Market Indicator Ever: At 91% Falls From 92% Last Week and Secondaries Confirm "Tradable" from Negative. 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 that has been going on for some time now where the reality doesn't match this continued bull run.
The single largest problem is because when the trading range is so narrow that way too much money has to be put on the table just to get back meager gains. If you guess incorrectly, you will rack up another unprofitable trading day.
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 15577 up 56 or 0.36%.
The SP500 is at 1691 up 5 or 0.30%.
SPY is at 169.12 up 0.53 or 0.32%.
The $RUT is at 1048 up 4.46 or 0.43%.
NASDAQ is at 3630 up 14 or 0.38%.
NASDAQ 100 is at 3093 up 8 or 0.27%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is positive.
WTI oil is trading between 103.80 and 102.95 today. The session bias is sideways and is currently trading down at 103.51.
Brent crude is trading between 106.97 and 105.75 today. The session bias is bearish and is currently trading up at 106.20.
Gold fell from 1339.17 earlier to 1311.72 (gaping at 1326.20) and is currently trading up at 1316.55.
Dr. Copper is at 3.073 falling from 3.082 earlier.
The US dollar is trading between 81.75 and 82.27 and is currently trading up at 82.02, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary
Written by Gary