Opening Market Commentary For 01-16-2013
Just like yesterday’s session, and the one before it, the premarket futures were down suggesting the market would open down.
The markets did open open in the red, down just a ‘tad’ from yesterday’s close and best described as a flat opening. However they were melting upwards during the first half hour cutting the sessions losses to half by 10 am. Today is looking just like yesterday ending up with a small gain.
Financial reports were O.K., but still on the ‘not so good’ side and the markets reacted negatively to the news. The Consumer Price Index (YoY) fell from 1.8% to 1.7% and the CPI excluding food and energy, remained steady at 0.1% while analysis were expecting an increase of 0.1%.
Interesting article below. Because of the holiday on the 21st I would expect any decline to begin on the 23. Fibonacci or not, a decline is in order and has been for some time.
For the Fibonacci fans out there, here is something rather stunning from Newedge’s Brad Wishak. In the chart below, the strategist looks at the duration in days of each stock rally leg since the 2009 bottom.
What is rather amazing is follow through between one rally and the next in terms of, you guessed it, the Fib 61.8% retracement.
As Wishak comments: “obvious is the diminishing marginal utility of each bath of QE manifesting itself in shorter and shorter rallies. Less obvious is the underlying rhythm of the start and stopping points.
Applying the 61.8% retrace to time, called the the most recent September stock highs within 4 days. And projecting this pattern forward, we’re now just around the corner from the next 61.8% top, which hits on January 22.”
Because if in a centrally-planned world DeMark indicators still have any relevance, then certainly so does Fibonacci.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning. This continuing trend makes predictions of session movements nearly impossible making trading 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 2013 begins, but a lot of guessing 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 less than optimal during the past several years.
I also have continuing issues with some pundits, writing almost every day, that there are setups for day trading. Best Stock Market Indicator Ever: Unchanged at 79% and Secondaries Confirm “Tradable” 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. I keep hoping for increasing volumes to signal improved trading.
Swing trading is also at your own risk for all the reasons mentioned above although guessing overnight trades would have been most profitable. Again, 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 10:00 is at 13491 down 44 or -0.32%.
The SP500 is at 1469 down 3 or -0.17%.
SPY is at 146.87 down 0.17 or -0.12%.
The $RUT is at 881.69 down 3 or -0.33%.
NASDAQ is at 3112 up 3 or 0.09%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was trading in a very narrow 50 cent range this morning and is currently trading up at 93.52 trading between 93.10 and 93.60 and the bias is neutral.
Brent crude was generally down in light trading earlier and is currently trading down at 110.61 trading between 110.28 and 110.78 and the bias is negative.
Gold was down this morning. Currently trading down at 1676.64, trading range is between 1664.00 and 1673.15 with a negative bias.
Dr. Copper is at 3.61 down from 3.68 earlier.
The US dollar rose from 79.66 earlier to 79.94 and is currently trading up at 79.89.
** RRR = Risk Reward Ratio
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Written by Gary