Opening Market Commentary For 01-17-2013
Premarkets were up substantially this morning partially because the USD took a real beating last night but the futures peaked around 9 am and showed signs of a deteriorating situation. This morning the USD is headed back up indicating to me that we will see some volatile moves today. The financial reporting for this morning was mixed and not so good. Initial Jobless Claims and Building Permits are down but Continuing Claims are up. Gold is down and the oils and copper are up all of which indicates Mr. Market will see higher highs today.
Markets did open higher setting new highs for the year, but remain in the flat range. The red volume quickly took over and started to melt the averages off their highs and the dippers, ever present, moved the averages back up to opening levels by 10:15.
Is today the last gasp for the markets or are we going to see the averages push ahead? We are well into the resistance zone for most averages and near tops, some of which are double ones. Other indicators are waving red flags of caution to any investor wanting to jump aboard the market train.
Earnings are mixed at this point and need to be watched.
Citigroup posted an adjusted fourth-quarter profit of 69 cents per share, which was short of the 96 cents analysts forecast. Adjusted revenues of $18.7 billion also missed expectations of $18.8 billion. Shares dropped more than 2% in pre-market trading.
Bank of America posted fourth-quarter net income of $700 million, compared to $2 billion in the same quarter in 2011. On a per share basis, the second-biggest U.S. bank earned 3 cents for the quarter; it wasn’t immediately clear whether the figure is comparable to estimates of 2 cents. Adjusted revenues of $19.61 billion came in short of the $21.11 billion analysts forecast.
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 10:15 is at 13576 up 65 or 0.48%.
The SP500 is at 1479 up 6 or 0.44%.
SPY is at 147.79 up 0.72 or 0.49%.
The $RUT is at 887.86 up 5.55 or 0.63%.
NASDAQ is at 3135 up 18 or 0.59%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was up this morning and is currently trading up at 95.59 trading between 93.12 and 95.70 and the bias is positive.
Gold gaped down this morning and that was covered. Currently trading up at 1685.61, trading range is between 1684.66 and 1666.64 with a positive bias.
Dr. Copper is at 3.65 up from 3.60 earlier.
The US dollar fell from 79.95 earlier to 79.62 and is currently trading down at 79.76.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary