Written by Gary
Opening Market Commentary For 11-12-2013
Premarkets were down -0.25% from the opening. The rise of the Chicago Fed Nat Activity Index to 0.14 over 0.13 reported last time had zero effect on the futures.
Markets gaped down -0.30% at the opening on heavy selling but by the 15 minute mark the BTFDers had reduced the averages fall to -0.15%. By 10 am the averages were once again melting downward on heavy volume.
The RRR** has been very narrow at the opening bell for months and this trend of low volume and sometimes narrow trading sessions makes any predictions of session movements nearly impossible, thus making trading futile and mostly unprofitable.
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 no matter what you do.
The problem facing traders is that the trading range, which has been so narrow during the trading day lately, that way too much money has to be put on the table just to get back meager gains. Also, unexpected and nonsensical reversals are becoming more prevalent as volatility increases making amateur trading very difficult.
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 several years. 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 short term indicators are leaning towards the sell side this morning, but I would advise caution 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 until we can see what the Fed is going to do. 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'! I would like to see a blowout candle to verify a top.
The DOW at 10:15 is at 15765 down 18 or -0.11%.
The SP500 is at 1768 down 4 or -0.22%.
SPY is at 176.98 down 0.35 or -0.20%.
The $RUT is at 1098 down 4 or -0.33%.
NASDAQ is at 3909 down 11 or -0.28%.
NASDAQ 100 is at 3355 down 8 or -0.24%.
The longer trend is up, the past 12 months trend is bullish, the past 10 sessions have been sideways and the current bias is negative.
WTI oil is trading between 95.13 and 94.31 today. The session bias is negative and is currently trading down at 94.76.
Brent Crude is trading between 107.00 and 105.57 today. The session bias is positive and is currently trading down at 106.56.
Gold rose from 1275.86 earlier to 1284.50 and is currently trading down at 1281.10. The current bias is negative.
Dr. Copper is at 3.233 falling from 3.254 earlier.
The US dollar is trading between 81.54 and 81.07 and is currently trading down at 81.10, the bias is currently negative.
** RRR = Risk Reward Ratio
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Written by Gary