Written by Gary
Opening Market Commentary For 11-08-2013
Premarket was down -0.30% just after the reporting U.S. Consumer Spending ticked up by 0.2% in September, matching analysts expectations. Also, personal income climbed 0.5%, topping analysts estimates of a 0.3% advance. This decline didn't last long as the SP500 futures edged up +0.15% just before the opening bell. Premarket volume was surprisingly coming in at moderate levels which is normally anemic.
Markets opened in the green, but flat on moderate volume. By 10 am, after a feeble attempt to test the resistance from yesterday, the averages remain flat on moderate volume.
16 Days - SP500
The RRR** has been very narrow at the opening bell for months and 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 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.
The short term indicators are leaning heavily towards the sell side this morning, but because of the Fed's reluctance to give any hints of when the taper will begin, I would take chart and other technical indicators with a grain of salt. The longer 6 month outlook remains 40-60 sell.
If we get Fed tapering in December the markets will certainly react in a negative fashion. If the tapering begins in March 2014, like many believe it will, the markets are going to price that in by declining sooner. I am expecting weak to negative markets for the foreseeable future. Also, many pundits have stated that we may have seen the top - but I wouldn't count it as long as the Fed continues to hand out 'Market Viagra'!
If ever there was a more sad indication of just what the Fed's liquidity hosepipe of exuberance has done to global capital markets, it is this morning's reaction to a better-than-expected payrolls report.
Good news, right?
Oh no - not for risk... indicative that a 'taper' may be closer than some hoped, bond yields are blowing higher, stocks are dumping, Gold and Silver are tumbling, and the USD is surging. Still think a 'taper' is priced in?
Still think markets reflect anything but the flow of fed money printing?
The DOW at 10:00 is at 15601 up 9 or 0.06%.
The SP500 is at 1750 up 3 or 18%.
SPY is at 175.15 up 0.22 or 0.13%.
The $RUT is at 1087 up 8 or 0.73%.
NASDAQ is at 3882 up 25 or 0.65%.
NASDAQ 100 is at 3337 up 15 or 0.45%.
The longer trend is up, the past 6 months trend is bullish, the past 9 sessions have been sideways with a negative slant and the current bias is sideways.
WTI oil is trading between 93.90 and 94.69 today. The session bias is positive and is currently trading down at 94.53.
Brent Crude is trading between 102.99 and 104.09 today. The session bias is sideways and is currently trading sideways at 103.75.
Gold fell from 1313.36 earlier to 1283.04 and is currently trading down at 1285.30.
Dr. Copper is at 3.235 falling from 3.263 earlier.
The US dollar is trading between 80.72 and 81.43 and is currently trading down at 81.31, 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