pening Market Commentary For 11-08-2012
Premarkets were somewhat flat this morning after the punishing 300 fall of the DOW yesterday. Markets opened up slightly, but not unexpected as the averages usually rebound after a crushing decline. The volume was green and subdued but a far cry from yesterdays red sell-off volume. It remains to be seen if we are going to enter the weekend on a up note.
By 10 am the averages leveled off after rising a few points from the opening speculating a continued decline or at least a sideways trading session. The volume remains low and the averages flat.
My observation of the ‘great fall’ yesterday is not necessarily from an Obama Presidential win, but more of a realization that the same folks that were here for the past 4 years are coming back to wreak more Keynesian financial havoc on an already weak financial system. Plus the uncertainty of higher taxes, ‘Obamacare’ and the fiscal cliff the US is facing. Adding to that is the Greece issues and other EU problems that will certainly continue to spill over to the US.
A view from across the Pond.
Winston Churchill: “Americans will always do the right thing, but only after exhausting all other possibilities.”
The market topped back in September and has been trending down since. My bias has been to the downside the last couple weeks. Yesterday the indexes sliced through support levels and closed at their lowest levels in a couple months. In my opinion, we have not seen a bottom. We need more selling, preferably intense selling. We need the indicators to move to extreme levels, and it looks like this will take more time. I have no interest going long until it happens.
If you prefer sticking to the long side, be on the sidelines. There’s nothing wrong with hanging out there until we get a tradeable bottom.
The RRR** was very narrow at the opening bell, 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 as the markets are currently untradable. 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 12938 up 5.66 or 0.04%.
The 500 is at 1395 up 0.92 or 0.07%.
The $RUT is at 804.49 up 0.03 or 0.00%.
SPY is at 139.78 up 0.08 or 0.06%.
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 trading down at 85.01 trading between 84.50 and 85.69 and the bias is neutral.
Brent crude was up today and is at 107.56 trading between 106.80 and 108.16 and the bias is positive.
Gold is choppy this morning. Currently trading down at 1717.25, trading range is between 1713.15 and 1721.00 with a positive bias.
Dr. Copper is at 3.46 down from 3.47 earlier.
The US dollar fell from 81.10 earlier to 80.88 and is currently trading at 80.97.
Hat tip to “Tim” for this little limerick.
“Apple Prison Blues”
I bet there’s rich folks eating from a fancy Goldman car
They’re probably drinkin’ coffee and smoking big cigars.
Well I know I had it coming, I know I can’t be free
But those people keep a sellin’
And that’s what tortures me…
Well if they freed me from this prison,
If that railroad train was mine
I bet I’d move it on a little farther down the line
Far from AAPL prison, that’s where I want to stay
And I’d let that lonesome whistle blow my blues away…..
** RRR = Risk Reward Ratio
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Written by Gary