Closing Market Commentary For 08-28-2012
O.K. The decimal point is off a bit. Believe me my title is as much excitement the whole day had to offer as we suffered through another do-nothing session. Low volume, miniscule movements and stupid excerpts from imbecilic politicians.
Seriously, you can take tomorrow off as it will be another session like today. Just be sure to be here Thursday and Friday as there may be fireworks (I wish).
Zacks provides one view of the low volume which could very well be just the opposite where low volume means investors are scared of the future and are not willing to bet the farm. It also means they are VERY concerned about China making a hard landing, war with Iran and the EU going into a double-dip recession. Personally, I am not one of those in the placated state that everything in the near future is going to be O.K. And I remain cautious.
“one noteworthy thing about the last few weeks equity rally is the really low volatility. This is not like anything visible in the past few years. It speaks to a steadier and more gathered consensus about earnings, and the diminishing possibility seen of big threats, at least in the minds of those who participate in equity markets.”
The RRR** is again very narrow at the closing bell and any trades probably ended up on the unprofitable side as this market remains flat. Swing trading is at your own risk and being the market is at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.
The DOW at 4:00 is at 13102 down 21.83 or -0.17%.
The 500 is at 1409 down 1.13 or -0.08%.
The $RUT is at 814.28 up 3.87 or 0.48%.
SPY is at 141.37 down 0.14 or -0.12%.
The trend is neutral and the current bias is neutral.
WTI oil is at 96.08 trading between 95.15 and 96.45 and the bias is neutral.
Brent crude is at 112.47 trading between 111.70 and 113.10 and the bias is neutral.
Gold is at 1666.77 trading between 1656.80 and 1672.30 with a neutral bias.
Dr. Copper is at 3.46 down from 3.47 earlier.
Earlier the USD tumbled from 81.84 to 81.27 and is currently at 81.36.
The 500 at the close.
The DOW at the close.
Fitch has just downgraded seven Italian banks. The medium-sized lenders, including Banca Popolare di Sondrio and Banco di Desio e della Brianza were downgraded as part of an ongoing review. In a statement, Fitch said the downgrades reflected “the pressure arising from the current challenges in the operating environment, where access to wholesale funding has become more difficult and pressure on profitability remains high.”
Fitch currently expects Italian GDP to contract by 1.9pc in 2012 and to show zero growth in 2013.
A fairly lacklustre day on the markets. The FTSE 100 has closed flat, at 5,775.71, while the CAC 40 in Paris has closed down 0.9pc at 3,431.55 and the FTSE Mib in Milan has finished flat, at 14,993.01.
The market is giving signs that it has discounted any possible good news and that the rally is over. Europe has been in one of its periodic, but temporary, quiet periods that has encouraged the market while slipping further into recession. At the same time the long-term policy moves required to unify the EU is not likely to be accomplished before a capital flight from Italy and Spain forces their hand.[More]
** RRR = Risk Reward Ratio
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Written by Gary