Written by Gary
Opening Market Commentary For 12-12-2013
Premarkets were unusually very active, volume wise, this morning being up +0.05% at one point suggesting today's session could be volatile. Gold is sharply lower amid of taper fears and the oils started falling right after the opening.
Markets opened flat to mixed and the large caps mostly in the red. $NDX lead the way up at +0.20% and the volume was VERY green. In spite of the BTFDers efforts the averages remained flat with the DOW sliding 60 points by the 15 minute mark. By 10 am the markets were all in the red with the large caps generating the largest losses.
Financial news was mixed this morning where the weekly jobless claims jumped to 368K, retail sales climb most since June in November and US import prices fell. Export prices edged up leaving investors still concerned about tapering this month.
The RRR** was good at the opening bell this morning, but could improve more before the midday comes around if we see some volatility. 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. Today might be a good trading day, but be careful of the unpredictable switch backs.
The short term indicators are leaning heavily towards the sell side at the opening, but I would advise caution in taking any position because of the Fed's cryptic utterances in hinting when the taper will begin and by how much. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does WHEN it actually does something.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is actually going to do, simple as that. If we get some Fed tapering in December (17th. -18th. meeting) the markets will certainly react in a negative fashion, how much of course depends on much bond buying takes place. If the tapering begins in March 2014, like some believe it will, the markets are going to price that in by declining sooner. However, 74% of Bloomberg surveyed economists believe tapering will believe either in December or January as of 12-09-2013, but Fisher says it will take place in the first quarter. I am expecting weak to negative markets for the foreseeable future.
Members of the FOMC believe the US economy has shown signs of improvement, but they have assured short-term interest rates would remain low for quite some time to come. Alpari Market Analyst, Craig Erlam, said: "Many members of the Fed now appear eager to start winding down its asset purchases and are looking for ways to do it that will create the least disruption in the financial markets, such as setting simple thresholds for reductions, or even more simply, providing a timetable for tapering that is not data dependent."
ADVFN reported, "The rally in question has been built on the back of the Fed's promise of a stimulatory environment. If any catalyst points to the Fed giving up its accommodative stance, there is a danger of a pullback and near term support for the index lies around the 15,965, 15,890 and 15,804 levels."
Personally, I think it could go a lot lower.
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 (shooting star) to verify a top along with heavy volume.
The DOW at 10:00 is at 15778 down 66 or -0.42%.
The SP500 is at 1779 down 3 or -0.18%.
SPY is at 178.46 down 3 or -0.18%.
The $RUT is at 1101 down 0.09 or -0.01%.
NASDAQ is at 4005 up 1 or 0.02%.
NASDAQ 100 is at 3470 up 0.39 or 0.01%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is negative.
WTI oil is trading between 97.31 and 98.15 today. The session bias is negative and is currently trading up at 97.68.
Brent Crude is trading between 109.96 and 108.77 today. The session bias is negative and is currently trading down at 108.89.
Gold fell (crashed) from 1256.54 earlier to 1224.25 and is currently trading down at 1225.10.
Dr. Copper is at 3.291 falling from 3.309 earlier.
The US dollar is trading between 79.85 and 80.14 and is currently trading up at 80.14, the bias is currently positive.
** RRR = Risk Reward Ratio
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Written by Gary