Opening Market Commentary For 06-05-2012
Markets opened quietly as expected with the ever present ‘dippers’ making a feeble attempt to drive the markets up. The green opening volume was low to anemic and not much else happened as the markets stayed withing points of where they closed yesterday. I wrote yesterday, “. . . . if the US ISM Non-Manufacutring Composite (MAY) rated as a medium importance report comes in below expectations 53.5. My guess is that it will come in lower, so don’t be shocked.” Well, I guessed wrong on this one but hedged my bets by getting out of my short SQQQ yesterday just before the close.
The NMC for May came in at 53.7 and the markets rose somewhat on medium volume. Numbers above 50 indicate expansion while those below 50 point to contraction. However, the enthusiasm isn’t here and I would tend to be cautious at this point. Technically the markets have to rest and slowly sell off the support that the markets are currently in before continuing the march down. I would love to go long and take advantage of the perceived climb to come but the risk/reward ration is not in our favor. With the market price swings still in a very narrow range it makes any trading risky but you can plan ahead.
US Non-Manufacturing ISM Beats Modestly As Employment Index Tumbles To
There was a little for everyone in the latest “baffle them with bullshit” economic data report . . . the all important employment index tumbled from 54.2 to 50.8, the lowest print of the Year”
Typically a newly formed resistance, that lies just above the major markets now, is challenged before moving on and now we also have the 200 day MA in the way; a formidable barrier indeed. In spite of the World woes pressing on the markets, I expect some sort of a challenge to occur during the next several days signaling caution for anyone dipping their toes into the market place. At that time shorting the market becomes favorable once again.
The DOW is at 12123 up 23.16 or 0.19%, the 500 is at 1284 up 5.82 or 0.46%, the $RUT is at 743 up 6.32 or 0.86% and SPY is at 128.87 up 0.75 or 0.89%. The trend is neutral and the current bias is up.
Gold is down to 1616 with a neutral bias. WTI oil is at 83.89 being as low as 83.30 this morning. Brent crude was in the high 99.60’s and is currently trading in the 98.97 area.
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Written by Gary
