Midday Market Commentary For 01-30-2013
By noon time the markets have done absolutely nothing except melt sideways on low volume. Now the averages have moved from the flat green side to the flat red side after a feeble attempt to best yesterday’s highs.
The trend, if you can call it that, is down and suspect we will see more sideways movement with a possible decline by the end of the session. I really do not know what is holding this market up right now, except for the HFT algo computers.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again into the midday session. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. Buying shorts or longs at this point is probably not wise from a RRR** standpoint.
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: Rises to 87% 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 12:00 is at 13943 down 11 or -0.08%.
The SP500 is at 1506 down 2 or -0.12%.
SPY is at 150.52 down 0.14 or -0.09%.
The $RUT is at 902.87 down 4 or -0.49%.
NASDAQ is at 3155 up 2 or 0.07%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was rose this morning and is currently trading down at 97.67 trading between 95.50 and 98.25 and the bias is negative.
Gold was up this morning. Currently trading up at 1680.55, trading range is between 1651.65 and 1682.83 with a positive bias.
Dr. Copper is at 3.74 up from 3.65 earlier.
The US dollar fell from 79.75 earlier to 79.28 and is currently trading down at 79.31.
** RRR = Risk Reward Ratio
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Written by Gary