Opening Market Commentary For 05-06-2012
Markets opened higher and promptly started moving up although with very light green volume for the first 10 minutes, not a encouraging sign for continued efforts to push the markets higher. The green volume finally climbed to low to moderate levels pushing the $RUT and SP500 above the resistance and the 500 above its 200 day MA. SPY did the same thing but left a gap up in the process indicating a down day in the near future to cover it. The DOW has remained BELOW its 200 day MA and resistance and needs to rise if this rally is going to continue. The signs are clear and much caution is to be exercised. Here is what I am going to do.
Today might be a good time to step in a get some shorts, not a lot, say 2 to 4% of holdings as the signals are mixed. I am waiting for the market to settle and then ‘perhaps’ jump in. I’ll let out premium subscribers know first.
WTI oil is at 85.98 matching it high earlier this morning. Brent crude is currently climbing and trading in the high 100 area. Gold is up today at 1635, trading between 1640 and 1633 with a negative bias.
The DOW is at 12277 up 150 or 1.22% (200 day MA is 12270, support is at 12288, black cross formed), the 500 is at 1301 up 16.13 or 1.28% (200 day MA is 1286, support is at 1288, black cross tomorrow), the $RUT is at 756.23 up 10.13 or 1.36% (200 day MA is 757.43, support is at 746, black cross formed) and SPY is at 130.76 up 1.67 or 1.32% (200 day MA is 128.83, Support is at 129.20, black cross tomorrow). The trend is up and the current bias is up.
“Moody’s has downgraded six Germany banks, including the country’s second largest lender Commerzbank, due to the increased risk of further shocks emanating from the euro area debt crisis.”
European Markets have slipped back slightly since Mario Draghi started his press conference [this morning].
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Written by Gary
