Written by Gary
Opening Market Commentary For 09-23-2013
SP500 futures in pre-remarket action was down -0.25% and immediately after the opening the SP500 descended another 0.10%. The $VIX jumped from 13.25 to 14.00 and by 10 am was at 14.26 and climbing.
Generally, the market opened down and flat with the small caps also flat, but in the green. Interesting to follow the volume as sometimes, as in this mornings action, the sell off was rated heavy and noticeably the BTFDers were not buying into the dip as they usually do. The bulls in the crowd are obviously concerned about progressing further upwards at this time as the US PMI misses expectations this morning..
The current trend is downwards as traders and investors alike try to put the tea leaves into some coherent view of the long term. Financial news this morning was on the 'not-so-good' side which prompted mixed feelings of what the Fed is going to do regarding the taper in October.
On one hand this poor report might prompt the Fed to consider holding off the taper until later in the year as planned, but on the other hand it might not make any difference. This morning, at least, investors are not taking a chance and many are bailing out and the BTFDers are seemingly waiting this dance out.
Despite exuberance at European and Chinese PMIs, the US clean shirt just skidded with a miss. Against [expectations] of a high YTD 54.0 print, PMI posted 52.8 - its lowest in 3 months and falling for the second month in a row.
New orders fell at the slowest pace since April (boding ill for durable goods) and the employment sub-index grew at the slowest pace in 3 months (suggesting payrolls will not hold up well).
Of course, as Markit notes, bad news is good news "as far as policymakers are concerned there are some worrying signals in relation to the sector's growth momentum, which vindicate the Fed's decision to hold off on tapering its asset purchases."
As of right now, it is too late to jump in to catch the market highs, safely anyway because we may be there already. 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, be careful as the spreads are narrow and needs to be an overnight transaction. Correctly 'guessing', of course, is the tricky part of the successful trading equation.
The Best Stock Market Indicator Ever: Confirm "Tradeable". It was certainly true last week, but this casino market can turn on a dime and I would like to reminded you that there is a wedge between perception and reality that has been going on for some time now where the reality doesn't match the continued bull run. Maybe we have seen the top - but I wouldn't count it as long as Dr. Ben continues to hand out 'Free Ice Cream"!
The problem facing traders is that the trading range, which has been so narrow lately, that way too much money has to be put on the table just to get back meager gains. The RRR** is not favorable and is prone to serious risks of market reversal.
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 15417 down 31 or -0.20%.
The SP500 is at 1702 down 7 or -0.43%.
SPY is at 169.98 down 0.73 or -0.43%.
The $RUT is at 1068 down 4 or -0.38%.
NASDAQ is at 3764 down 11 or -0.28%.
NASDAQ 100 is at 3222 down 2 or -0.07%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been a wash and the current bias is down.
WTI oil is trading between 105.10 and 103.20 today. The session bias is bearish and is currently trading down at 103.32.
Brent Crude is trading between 109.44 and 107.94 today. The session bias is bearish and is currently trading down at 108.14.
Gold is trading in a narrow zone from 1332.02 earlier to 1313.61 and is currently trading up at 1323.90.
Dr. Copper is at 3.285 falling from 3.311 earlier.
The US dollar is trading between 80.39 and 80.63 and is currently trading up at 80.63, the bias is currently positive.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary