Opening Market Commentary For 08-13-2012
Good morning I hope everyone had a terrific weekend and refueled for what could be an interesting news week ahead – hopefully more exciting than last week. This morning in the early premarket action the futures made a decisive move down and right back up again; moves that are not unusual anymore but leaving the market flat. However, if there are no big surprises coming out of Europe, it could be another quiet week of range bound trading. Most US politicians are in vacation mode and are not likely to be rocking the financial boat and creating negative news events.
At the opening markets opened lower on anemic volume suggesting that politicians are not the only ones on vacation. The RRR** is in slim to negative territory making daily trades practically impossible for any profit. Swing trading is almost in the same boat on hopes that we could see markets melt up a few more points before some really difficult resistance levels are encountered. By 9:50 am minutes the ‘BTFD dippers’ had moved the markets off the opening lows to flat numbers and then highs made on Wednesday’s session last week. Moving even higher on falling volume the numbers melted higher and higher enticing investors on how much higher could it go.
Earlier this morning at 8:15 all the top volume movers were green except SPY being off 11 cents. Other than the volume being very low there were numerous hints that we might see the market decline as Citigroup, SPY, IWM were the most premarket active decliners. By 9:15 the premarket was down 12 points on the DOW and down 1.60 on the SP500. But the premarkets of late have been little help in seeing which way the market winds were to blow after the markets open.
At the 10:00 mark markets were displaying a distinct choppy mode as the bull and bears were showing their colors and neither wining. By 10:15 the markets had topped out and paused. As seen in previous sessions there have been swings that made even the most seasoned investor nervous about what investments already held and holding back on ANY comment long or short. In other words, no one has a clue what Mr. Market is going to do as most averages were fractionally lower on low volume.
European equity markets are just tipping into the red this morning after Japanese gross domestic product data disappointed and Bank of America cut the growth forecast for China.
There are concerns that Chinese growth may be slowing down more than expected with the worst still ahead. On Friday Chinese export growth in July registered 1%; this compares to expectations of around 8%, a big miss.
“Not everybody is completely convinced that the Chinese government will do enough to support growth in the months ahead,” says Markus Huber from ETX Capital.
Germany will block any new aid to ailing Greece if Athens does not fully comply with the terms of previous rescue packages, even if other countries support unlocking funds, a senior lawmaker said Sunday.
The DOW at 10:15 is at 13167 down 40 or -0.30%.
The 500 is at 140.02 down 3.82 or -0.27%.
The $RUT is at 797.88 down 3.67 or -0.46%.
SPY is at 140.53 down 0.31 or -0.22%.
The trend is neutral and the current bias is down.
WTI oil is at 93.11 trading between 92.84 and 93.94 and the bias is negative although up from Friday.
Brent crude is at 114.04 trading between 113.10 and 115.08 and the bias is negative but higher than Friday .
Gold is today at 1620 trading between 1619 and 1625 with a neutral bias.
Dr. Copper is at 3.36 down from 3.40 earlier.
Asian markets closed down and the European markets are mixed mostly flat.
Hold on tight boys and girls, cause Merkel is back from vacation, and she is not happy despite that healthy Santorini due diligence-inspired tan (as deputy-Chancellor Fuchs telegraphed earlier today, when he made it quite clear what his boss thinks about Greece, and about more printing).
Per Bloomberg: “German Chancellor Angela Merkel returns to the front line of the European debt crisis this week as the bloc’s leaders squabble over measures including bond purchases to relieve concerns the single currency may fragment.
Merkel ends her summer vacation and travels to Canada Aug. 15-16 for talks with Prime Minister Stephen Harper as a spiraling euro crisis threatens to constrain the global economy. With the region’s leaders awaiting a German high court decision on bailout funding next month, they’re struggling to smooth divisions over a European Central Bank plan to buy the bonds of indebted nations.”
Read at Dailfx this morning.
“Stimulus” RT @djfxtrader: “WSJ: Obama Administration to Announce Plans to Buy up to $170 Million of Pork, Chicken, Lamb, Catfish.”
** RRR = Risk Reward Ratio
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Written by Gary