Markets Forge New Highs Remaining Flat And Lackluster

Closing Market Commentary For 01-22-2013

The markets melted higher, once again, stretching the market’s ‘rubber band’ one twist closer to its snapping point. Today the averages continue to creep into the upper resistance like an invasive species conquers forbidden foliage. The HFT computers are most likely the culprits in this insidious melting up as no investor in their right mind would be playing this game. Eventually we will learn the details.

The markets closed tacking on new highs after a continuing melting up during the afternoon session. Some late session profit taking, but again I suspect this is all about algo computer trading. Actually everything is relatively quiet with the boogie-man hiding just around the corner ready to scare the sanity out of you – be aware and alert.

The RRR** has been narrow at the opening bell for the past several months and continued the trend into the closing session. 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 4:00 is at 13712 up 62 or 0.46%.

The SP500 is at 1492 up 6.53 or 0.44%.

SPY is at 149.35 up 1.02 or 0.68%.

The $RUT is at 899.24 up 6.44 or 0.72%.

NASDAQ is at 3143 up 8.47 or 0.37%.

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

How Oil Really Gets Priced

WTI oil was up slightly this morning and is currently trading up at 96.24 trading between 95.00 and 96.37 and the bias is positive.

Gold was down slightly this morning. Currently trading down at 1691.68, trading range is between 1684.32 and 1695.60 with a negative bias.

Dr. Copper is at 3.70 up from 3.68 earlier.

The US dollar fell from 80.15 earlier to 79.79 and is currently trading down at 79.95.

The SP500 at the close.

The DOW at the close.

** RRR = Risk Reward Ratio

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Written by Gary