Rebound Not Held – Averages Close Mixed

Closing Market Commentary For 12-05-2012

Markets closed down just off their highs for the day. Having traded all afternoon in a tight range the bear got the upper hand and put significant pressure on the bulls with moderate volume.

I have expected the averages to move up for the next several days followed by a significant decline. The jury is still out on that one, however tomorrow looks like it is going to open up.

Fox News reports: “The blue-chip average is zooming 1% higher in afternoon trading as shares of heavyweights Travelers, Caterpillar and Chevron jump. The S&P 500, seen as one of the best broad-market barometers, is up 0.56%. Meanwhile, the tech-heavy Nasdaq is down 0.24% on the back of a steep selloff in Apple shares.”

The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning. It was wider as the morning moved on, but very unpredictable. This trend makes predictions of movements during any 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 scrimpy 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 4:00 is at 13034 up 82.87 or 0.64%.

The SP500 is at 1409 up 2.23 or 0.16%.

The $RUT is at 820.60 down 1.52 or -0.18%.

SPY is at 141.50 up 0.27 or 0.19%.

NASDAQ is at 2973 down 23 or -0.77%.(The BIG loser for the day)

The longer trend is up, the past months trend is bearish and the current bias is down.

How Oil Really Gets Priced

WTI oil was down today and is currently down at 87.85 trading between 89.10 and 87.46 and the bias is negative.

Brent crude was down today and is currently trading down at 108.74 trading between 110.55 and 108.67 and the bias is negative.

Golden Showers As Goldman Tells Clients To Sell Gold

Gold gaped down several times this morning. Currently trading sideways at 1693.39, trading range is between 1706 and 1685.20 with a negative bias.

Dr. Copper is at 3.68 up from 3.66 earlier.

The US dollar rose from 79.56 earlier to 79.84 and is currently trading up at 79.82.

The 500 at the close.

The DOW at the close.

The NASDAQ at the close. Notice how the day closed down after rebounding off the resistance at 3034. Watch this one as it is VERY telling.

@zerohedge:

Thought Experiment: Why Obama Wants The Fiscal Cliff

The use of economic pain to expand governmental control of a nation is not a new concept. It has been a tool successfully used many times in history.

The reality that “taxing the wealthy” does not increase revenue or promote economic growth is lost on the 80% of Americans that are economically uninformed and are just struggling to maintain their current standard of living.

The path over the “fiscal cliff” is bad for the economy, the average American family and the stock market.

However, for the White House, going over the “cliff” is the next move in this elaborate game of chess which will clear the path towards completing Obama’s long term objectives of complete socialization of the American economy.

** 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