Midday Market Commentary For 08-22-2012
The markets have traded in a narrow range all morning and the volume was a bit higher than anemic as it moved up to low. Averages continue to be mixed as no one is quiet sure what is going to happen next although the bias is markedly bearish as we await the 2 pm FOMC meeting.
Kick. Can. Road. There will be no decisions made on Greece until October, according to Eurogroup chief Jean-Claude Juncker. Speaking on Luxembourg TV ahead of his meeting with Greek PM Antonis Samaras today, he said:
We’re waiting for the troika report […] As soon as we have that we can make a decision. In any case there won’t be a decision on Greece before October.
One pundit wrote earlier, “From a technical standpoint the market is in pretty good shape. My overall bias remains to the upside.” I have news for you, the market is in TERRIBLE shape. There are few worthwhile technical stats as the charts and ‘normal’ reading of the tea-leaves have been thoroughly trashed by the HFT crowd who can easily move the markets up as they have been. When are these so called financial advisers going to get the picture as I have said before, “amateurs may open the markets, but the crooks that proliferate manipulate it”. Plus, “The only fools bigger than those that are playing are those that think they are winning!”
Exceedingly low volume for the past year and mostly the past 13 sessions should tell you that no humans are trading this screwy market that is at least 15% to 25% higher than it should be. All the investors I know are patiently sitting on their hands watching and waiting. While it is good to follow the trend, it is also wise to see the folly and prepare for damage control but the ‘Mega-Bears‘ would like you to believe there is a lot mot more to come.
Bulk purchases of’ Hopium’ and ‘Delusionol’ are in fashion as Europe delivers daily doses of great news coming as they kick the can further down the road. More companies are reporting net losses and reducing earnings forecasts. And don’t forget japan as its exports FELL 8.1% YoY. Anyone that tells you that the World economies are improving is trying to sell you ‘Hopium’. Additionally, the largest signs of how China’s falling growth has stalled is China’s reduced usage of copper recently.
Seriously, the talking heads in the financial media really aren’t very much concerned with your long term investing success. They only care about convincing you to stay in the market at all times and fixated to their analysis for the latest market movements. “The present situation has one certainty, one block of bedrock upon which you may plant your feet and that is that a storm is coming; of that you may be sure.”
The RRR** continues to be very narrow this morning and any trading looks to be unprofitable. Swing trading is at your own risk and since the market is at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.
The DOW at 12:30 is at 13140 down 64 or -0.48%.
The 500 is at 1408 down 4.40 or -0.32%.
The $RUT is at 810.68 down 4.69 or -0.58%.
SPY is at 141.27 down 0.48 or -0.34%.
The trend is neutral and the current bias is bearish.
WTI oil is at 97.15 trading between 97.50 and 96.25 and the bias is positive.
Brent crude is at 114.72 trading between 115.08 and 113.55 and the bias is positive.
Gold is at 1640.13 trading between 1636.60 and 1644.98 with a neutral bias.
Dr. Copper is at 3.45 up from 3.43 earlier.
Earlier the USD tumbled from 82.13 to 81.83 and is currently down at 81.93.
Because the recent high exceeded last March’s watershed top, it would be a great place for Mr. Market to spring a nasty bull trap. We should therefore be on our guard against a spectacular collapse from these heights, notwithstanding the fact that I’ve drum-rolled Dow 14000 recently.
US deficit is expected to grow another $1.1 trillion in 2012, the fourth straight year the nation’s debt will exceed a trillion dollars, the non-partisan Congressional Budget Office reports.
In tort law, an attractive nuisance is any potentially hazardous object or condition that is likely to attract the naive and unwary, i.e. children. A classic example is an abandoned swimming pool half-filled with fetid water. The stock market is demonstrably an “attractive nuisance” and should be closed immediately.
** RRR = Risk Reward Ratio
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Written by Gary