Markets Opened Flat And Melted Down

Opening Market Commentary For 10-03-2012

Premarket was up a smidgin early this morning and when the ADP National Employment Report showed, topping estimates for an increase of 143,000, the markets backed off a smidge.

Markets opened flat with a bearish slant and by the 20 minute mark the DOW was off 10 points and the SP500 off 50 cents, both on very low volume. By 10 am the losses began to mount as the averages continued to melt downwards. The DOW was off 30 and the SP500 was off by 2 just before the 10 am ISM Non-Manufacutring Composite expecting 53.4, with the previous number of 53.7. After reporting a rise to 55.1, highest since March, the markets decided to sell the news, again under low volume. This movement, like previous session actions, is suspect to validity because of low volume. I bet if we didn’t have HFT, the entire picture would look different in that there wouldn’t be ‘rubber banding’ after each 5 minute move.

By 10:15 the low volume markets started to melt up and this looks like another lackluster day of wandering averages. According to FoxNews, the increase in August payrolls was revised down to 189,000 from 201,000 which is continuing bearish news.

QE’s biggest problem? Destruction of savings

The RRR** was very narrow at the opening bell and any trades will probably end up on the unprofitable side as long as this market has low volume and 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. Like you, I am waiting for a clear signal so I can place my bets.

The DOW at 10:30 is at 13491 up 9 or 0.07%.

The 500 is at 1448 up 2.34 or 0.16%.

The $RUT is at 839.42 down 1.01 or -0.12%.

SPY is at 144.86 up 0.37 or 0.25%.

The longer trend is up, the past week’s trend is neutral and the current bias is neutral.

WTI oil is down today and is at 89.64 trading between 91.81 and 89.25 and the bias is negative.

Brent crude is down today and is at 108.71 trading between 111.33 and 108.20 and the bias is negative.

Gold is up today at 1778.58, trading between 1770.71 and 1781.66 with a neutral bias.

Dr. Copper is at 3.78 down from 3.82 earlier.

The US dollar rose from 79.80 earlier to 80.08 and is currently trading at 79.92.

@RickAckerman:______

A Menacing Pause on Wall Street

Stocks and index futures have shown a slavish devotion to our Hidden Pivot targets lately.  Only trouble is, the vehicles that we ordinarily trade have barely budged.  The E-Mini S&P futures, for instance.

Came mid-August, however, they went flat, taking a 20-day breather to recharge for two single-day spurts that temporarily alleviated the tedium. . . Is the same thing about to happen again?  If not, look out below.

Three weeks ago, the E-Mini went into a dirge after soaring for two days on the promise that Helicopter Ben was prepared – again — to do yet whatever it takes to keep the stock market afloat until after the election.

. . . we would be remiss if we failed to point out that the broad averages have fallen back to where they were before Heli-Ben came galloping to the “rescue” for the umpteenth time.

Considering the foregoing, it feels like U.S. stocks are in a very dangerous place, hovering all-too-patiently as they wait for “something” to goose stocks again. We can’t imagine what would set them a-surge, even though we’re on record with a prediction of a 1400-point rally in the Dow, to 14969.

we are no longer asserting that the rally will unfold by election time.  The buying energy just doesn’t seem to be there.  More likely is that stocks will continue to meander until after November 6.

And then what?  For us, at least, it’s beyond imagining that the re-election of Barack Obama would spark a big rally on Wall Street.  Ditto for a Romney victory.  What that implies is that stocks have nowhere to go but down.

** RRR = Risk Reward Ratio

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Written by Gary