Opening Market Commentary For 12-04-2012
Premarket was down a few points and right after the opening there was mostly green for the averages. Volume remained low although green for the first 10 minutes and then turned red as the morning highs started to slip away. The trading range was very narrow as investors continue to shy away while the uncertainty of the US ‘fiscal cliff’ looms large in many eyes.
By 10 the DOW had reached 13006 its highest level for the morning session. Otherwise, this session appeared to be headed for another lackluster moment of sour grapes.
By 10:15 the markets resumed their morning ascent in falling volume appearing the HFT algo computers were taking advantage of the situation. I suspect we will continue to see market weakness today.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning. This trend makes predictions of movements during the session nearly impossible and trading becomes futile and unprofitable.
As long as market volume remains light or the trading range is narrow, one can expect successful trading to remain elusive. The RRR** has been wider on volatile sessions lately and is expected to become more so as the year ends, but a lot of guessing still remains. Correctly ‘guessing’, of course, is the tricky part of the successful trading equation. Any trades today will probably end up on the meager side of profitability if you are lucky as most trades have been during this past year.
I also have issues with some pundits writing almost every day that there are setups for day trading. This may be 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. Do not fall into the trap of money burning a hole in your pocket, sit tight better days are coming. Watch for increasing volume to signal improved trading.
Swing trading is also at your own risk for all the reasons mentioned above. Because the market is at a crossroads of sorts, I would prefer to sit on my hands as the markets are currently untradable. Guessing where the market is going to be tomorrow or next week, at this time anyway, can be a foolish and costly endeavor.
The DOW at 10:15 is at 13010 up 45 or 0.35%.
The SP500 is at 1412 up 3 or 0.21%.
The $RUT is at 822.35 up 1.54 or 0.19%.
SPY is at 141.70 up 0.24 or 0.17%.
The longer trend is up, the past months trend is bearish and the current bias is up.
WTI oil is down today and is currently up at 88.19 trading between 89.20 and 87.58 and the bias is positive.
Brent crude is down today and is currently up at 109.50 trading between 110.90 and 109.20 and the bias is positive.
Gold was down this morning. Currently trading up at 1700.38, trading range is between 1720.00 and 1691.28 with a positive bias.
Dr. Copper is at 3.68 up from 3.64 earlier.
The US dollar fell from 79.91 earlier to 79.61 and is currently trading up at 79.69.
** RRR = Risk Reward Ratio
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Written by Gary