Markets Higher, But Bears Are Chipping Away

Midday Market Commentary For 11-01-2012

By 11 am the markets reached its high for the morning and have traded sideways but with a bullish flavor. The volume has fallen off to anemic levels and one can only ‘guess’ what the afternoon session will bring. I am looking at proprietary data that suggests that the afternoon session will decline a bit.

In the Chart of $RUT below one can clearly see that we are still in a down trend and the channel has not been broken. Not to say it won’t be broken tomorrow, I am saying that we should remain on guard as this market and economy has been built on a ‘house of cards’ and could collapse at any given moment.

(click on chart to see larger view)

The RRR** was very narrow at the opening bell and remained so up to the midday mark, just as it has been for the past month. Any trades today will probably end up on the unprofitable side as long as this market remains flat or continues to have low volume.

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. Guessing where the market is going to be tomorrow or next week, at this time anyway, is a foolish endeavor.

The DOW at 12:15 is at 13231 up 135 or 1.04%.

The 500 is at 1426 up 14.70 or 1.04%.

The $RUT is at 827.60 up 4.52 or 1.08%.

SPY is at 142.86 up 1.50 or 1.06%.

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

WTI oil was up today and is now down at 87.04 trading between 85.50 and 87.40 and the bias is positive.

Brent crude was down today and is at 108.11 trading between 109.00 and 107.75 and the bias is negative.

Gold was up earlier and is now down this morning. Currently trading down at 1717.11, trading range is between 1715.32 and 1726.88 with a negative bias.

Dr. Copper is at 3.55 down from 3.57 earlier.

The US dollar fell from 80.18 earlier to 79.94 and is currently trading at 80.10.

Planned job cuts by U.S. firms soared 41% to 47,724 to a five-month high in October from September, according to Challenger, Gray & Christmas.

This is funny.

CARTOON – Calvin And Hobbes Explain Modern Capitalism

Calvin and Hobbes on crony capitalism.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

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Written by Gary