Markets Open Near Yesterday’s Close, Remain Flat

Opening Market Commentary For 10-26-2012

After yesterday’s close Apple (AAPL) reported earnings of $8.67 vs $8.75 estimates and the aftermarket plunged. This mornings premarket was at a point where the SP500 futures were down to 1394 off 19 points and the DOW was down 110 points. The morning financial’s showed the Q3 GDP Estimate Beats Expectations As Government “Consumption” Soars reads the headlines. The markets reacted positively to that news and took the premarket to within 3 points of the 500’s closing. After the opening the averages melted down a ‘tad’ and mostly in the red and flat.

It started to look like it is going to be a volatile day, but that idea was quickly squashed with low, no pathetic volume. The HFT computers pushed the averages higher anyway until the University of Michigan Confidence fell to 82.6 as weaker than the expected 83.0. Then the markets started melting down, but again on low volume.

I would be careful of the ‘BTFD dippers’ jumping in and raining on your parade if you are thinking of shorting. I do not foresee a waterfall drop or anything more than a 2% IF that much, so plan accordingly as we have the weekend ahead too.

After the US market is finishing celebrating this morning financial windfall investors will turn back to the EU where things are not so rosy.

@telegraph:

Spain economic woes continue with the country’s unemployment rate rising to a new record high of 25pc in the third quarter – up from 24.6pc in the previous quarter – as the recession deepens, official data showed on Friday.

The first column is what what was reported. The second is what analyst were expecting and the third is the last report.

The RRR** was very narrow at the opening bell, just as it has been for the past month. Any trades today will ‘could’ end up on the unprofitable side as long as this market remains flat or continues to have low volume, today may be different. If you had guessed AAPL was going to tank and shorted the market before the close yesterday, your profits this morning would be very nice. But there is that guessing thing again.

I have issues with some traders in that they are saying there are setups for day trading. This is true enough, but the day trading range has been so narrow that way too money had 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. Guessing where the market is going to be tomorrow or next week, at this time anyway, is a foolish endeavor.

The DOW at 10:15 is at 13107 up 3.00 or 0.02%.

The 500 is at 1414 up 1.14 or 0.08%.

The $RUT is at 816.05 down 0.77 or -0.09%.

SPY is at 141.47 up 0.06 or 0.04%.

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

WTI oil was up today and is at 85.69 trading between 84.98 and 86.33 and the bias is negative.

Brent crude was up today and is at 108.94 trading between 107.40 and 109.01 and the bias is negative.

Gold was down this morning, now it has turned up. Currently trading up at 1715.50, trading range is between 1701.05 and 1716.98 with a neutral bias.

Dr. Copper is at 3.56 up from 3.53 earlier.

Euro Troubles Stirring after News that Greece Needs €30 Bln More. (PDF)

The US dollar rose from 79.90 earlier to 80.37 and is currently trading lower at 80.06.

** RRR = Risk Reward Ratio

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Written by Gary