Closing Market Commentary For 10-23-2012
Not exactly news but the market closed down, but not as far as it was earlier this morning. Mostly the averages moved sideways since 1 pm with that pesky low volume syndrome, but a tad higher than previous sessions. The ‘dippers’ equaled the bears this afternoon in a not so frantic and exciting session. I guessed that Monday would be up, and it wasn’t, so I’ll guess tomorrow will be more down side. Someday I’ll ‘guess’ it correctly.
The biggest loser was the DOW at -1.82 with the $RUT at the other end at -0.53. There is no clear story here except the large caps seem to be taking a beating with poor financial reporting. The other news is that most averages closed below a major support and the DOW closing just above. (See chart below.)
Today was the single largest drop of the DOW since 6-21 but on lower volume.
The RRR** was very narrow at the opening bell and continued into the closing session, just as it has been for the past several months. Any trades today will probably end up on the unprofitable side as long as this market remains flat or continues to have low volume. A guess from yesterday’s close that the market would be down today could have been profitable, but it is still guessing.
I have issues with some traders in that they are saying there are setups for day trading. This is true enough, but the trading range is so narrow that way too money has to be put on the table just to get back meager gains.
Swing trading is also 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. Eric Parnell said it correctly “all of the prevailing economic forces today point to a stock market that should be in decline” and “unstable economic and market conditions are becoming increasingly tumultuous”. He goes on to say in his article, 50 Shades Of Stock Market Grey, “How can you best participate in any further upside while keeping things as clean and risk controlled as possible?”.
Guessing where the market is going to be tomorrow or next week, at this time anyway, is a foolish endeavor.
The DOW at 4:00 is at 13102 down 243 or -1.82%.
The 500 is at 1413 down 20.71 or -1.24%.
The $RUT is at 816.20 down 4.32 or -0.53%.
SPY is at 141.24 down 2.17 or -1.51%.
The longer trend is up, the past week’s trend is bearish and the current bias is down.
Oil futures settle below $87/bbl for the first time since mid-July, -2.2% to $86.67, as a stronger dollar and weakness in the broader market pressured prices. Also, the restart of the Keystone pipeline eased supply concerns. Energy stocks (XLE) fall hard, -2.1% vs. broader S&P -1.1%. However, natural gas rebounded, perhaps on expectations for colder weather or simply a bounce off yesterday’s big drop.
WTI oil was down today and is at 86.39 trading between 89.32 and 85.68 and the bias is neutral to bearish.
Brent crude was down today and is at 108.07 trading between 115.20 and 107.30 and the bias is negative.
Gold is down this morning. Currently trading down at 1706.52, trading range is between 1737.30 and 1704.28 with a negative bias.
Dr. Copper is at 3.57 down from 3.64 earlier.
The US dollar rose from 79.54 earlier to 80.15 and is currently trading at 80.03.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary