Market Commentary: Markets Gap Down On Low Volume, Melt Up Slowly

November 13th, 2013
in Gary's blogging, market open

Written by

Opening Market Commentary For 11-13-2013

Premarkets were down -0.55% early this morning with the MACD peaking and reversing suggesting the markets will rise at the opening.

Markets opened gaping down -0.50% on very low volume and settled. Almost immediately the averages began to melt slowly upwards recovering 0.10% by 10 am where the MACD is appearing to peak.

Follow up:

Not much of a buying opportunity this morning and the lack of volume suggests this session will be another slow day trading in a narrow range.

The RRR** has been very narrow during the morning hours 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 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.

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 short term indicators are still leaning towards the sell side at the opening bell, but I would advise caution in taking a position because of the Fed's reluctance to give any hints of when the taper will begin. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does.

The longer 6 month outlook remains 40-60 sell until we can see what the Fed is going to do, simple as that. 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 along with heavy volume.

Also, institutional selling has been in an up-trend further developing this market into a high risk place to be.

The DOW at 10:00 is at 15701 down 48 or -0.31%.

The SP500 is at 1765 down 3 or -0.17%.

SPY is at 176.70 down 0.27 or -0.15%.

The $RUT is at 1100 down 1.56 or -0.14%.

NASDAQ is at 3914 down 6 or -0.15%.

NASDAQ 100 is at 3360 down 6 or -0.18%.

The longer trend is up, the past months trend is bullish, the past 10 sessions have been sideways and the current bias is positive.

How Oil Really Gets Priced

WTI oil is trading between 93.09 and 93.90 today. The session bias is positive and is currently trading down at 93.66.

Brent Crude is trading between 105.74 and 106.90 today. The session bias is positive and is currently trading up at 106.67.

Gold rose from 1269.16 earlier to 1278.77 and is currently trading down at 1272.50.

Here's why copper has lost its indicator role

Dr. Copper is at 3.156 falling from 3.222 earlier.

The US dollar is trading between 81.08 and 81.33 and is currently trading down at 81.28, 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


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