Closing Market Commentary For 09-14-2012
The afternoon market lumbered along having scaled back its morning advance. Volume continues to fall as the markets slide sideways leaving one to wonder why we are not on our way to 15,000 on the DOW after the QE3 announcement.
I suspect we are going to see more sideways and some small spikes and valleys for the foreseeable future. When there is low volume there are no traders and only the HFT crowd that have limited clout on a daily basis. As long as the markets are staying up, those who hold positions are not going to take a leap even though the temptation must be great at this time. At the close there was some light profit taking as averages moved down towards the opening numbers.
Risk-on markets have petered out for today, but up for the week.
I remain cautious, so we wait for the next week and see if anything new is in the this news driven, now risk-on market.
I said earlier that the QE3 was a mistake, a big one, but only time will tell who is right. Obviously, Dr. Ben thinks I am wrong and a $hit load of debt is going to be good for us as a Nation.
I also question the timing. We are very near some averages tops; double and in several cases triple. Wouldn’t it have made more sense to wait for the war that is sure to occur in Iran or a retreat from the market tops? Or is this a political move as suggested by some pundits.
Finance chiefs say a third round of quantitative easing, announced today, won’t do much for business. The Federal Reserve made a mistake today in launching QE3, the third round of quantitative easing. This is not just my opinion. It’s what chief financial officers say.
So, I will caution at least myself not to get to far out on the limb watching the markets melt up as they have done in the past implementation of QE’s because this one might, just might, fall over backwards and in quick fashion.
The RRR** today points to more skepticism to the rally yesterday as the Ratio remains very narrow, unnaturally so. Normally it should be wide enough to easily make safe trades but I continue to believe any trades will probably end up on the unprofitable side as long as this market exhibits low volume. 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 13593 up 52.51 or 0.40%.
The 500 is at 1465 up 5.77 or 0.40%.
The $RUT is at 864.65 up 8.54 or 1.00%.
SPY is at 147.24 up 0.65 or 0.44%.
The trend is up and the current bias is down.
WTI oil is at 98.96 trading between 98.16 and 100.40 and the bias is negative.
Gold is up today at 1772.00, trading between 1765.00 and 1778.00 with a neutral bias.
Dr. Copper is at 3.83 up from 3.73 earlier.
The US dollar fell from 79.93 earlier to 78.72 and is currently trading at 79.00.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary