Opening Market Commentary For 08-16-2013
Premarkets were relatively quiet following the 'not-so-good' financial's this morning. Investors seemed to have done what they had to do yesterday and there is nothing left for today – or so it seems.
The markets opened flat and lackluster accompanied by low volume leaving investors wondering what Mr. Market is going to do next. The markets began to sea-saw back and forth on the plus / minus line for the first 15 minutes without giving a clue of direction.
I do have some thoughts about today.
Right off the bat, at the opening, that support line that kept the averages from going any further down yesterday, held this morning with a test – a halfhearted one at that as there was no volume to speak of. Then came the 9:55 am University of Michigan Confidence indicator which came in at 80 far below the 85.2 that was expected. The markets were slow to react and remained above the support and mostly flat and mixed by 10:15 am.
It would appear that there are not enough sheeples and small investors to make the markets move like they did before 2008. Yesterday, everyone ran out of steam and today will be a consolation of sorts before the next move, which indicators point downward.
I do not see the DOW dropping below 14900 on this correction and the SP500 not to exceed 1632, which is loosely a 5% move. From there it is anyone's guess, although indicators today depict a continuation back upwards afterward. However, remember similar conditions existed in October 2007 and we all know what happened shortly after that date.
The RRR** was narrow at the opening bell today continuing a trend of the last several months. It has been like this for over a year actually. This trend of low volume and narrow trading sessions makes any predictions of session movements nearly impossible, thus making trading futile and mostly unprofitable.
As of right now, it is too late to jump in to catch the market 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 several volatile sessions lately and made quick trades possible, unfortunately a lot of guessing remains. Correctly 'guessing', of course, is the tricky part of the successful trading equation.
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. Swing trading has been the game of choice for the past year would have been most profitable if you guessed overnight action correctly. 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 15128 up 17 or 0.12%.
The SP500 is at 1662 up 1 or 0.04%.
SPY is at 166.46 up 0.07 or 0.04%.
The $RUT is at 1029 up 1 or 0.13%.
NASDAQ is at 3615 up 9 or 0.24%.
NASDAQ 100 is at 3085 up 9 or 0.29%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been negative and the current bias is slightly positive.
WTI oil is trading between 107.04 and 107.90 today. The session bias is positive and is currently trading up at 107.81.
Brent crude is trading between 109.17 and 110.15 today. The session bias is positive and is currently trading up at 110.02.
Gold rose from 1257.04 earlier to 1373.88 and is currently trading down at 1365.70.
Dr. Copper is at 3.366 rising from 3.339 earlier.
The US dollar is trading between 81.06 and 81.42 and is currently trading up at 81.21, the bias is currently sideways.
** RRR = Risk Reward Ratio
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Written by Gary