Opening Market Commentary For 01-31-2013
Markets opened down and then melted up with a spurt from the ‘dippers’ to the mid levels of yesterday. That bullish move seems to have waned as the markets are displaying more weakness as the 10 o’clock hour approached.
By 10:15 most of the averages were in the green, but flat and directionless. Hopefully, we will see some change, but for right now were are at a cross road and need to sit tight.
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. It is too late to catch the highs and too early to start shorting.
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 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 10:15 is at 13929 up 18 or 0.13%.
The SP500 is at 1501 down 0.45 or -0.03%.
SPY is at 150.04 down 0.03 or -0.02%.
The $RUT is at 898.44 up 1.50 or 0.17%.
NASDAQ is at 3150 up 8 or 0.25%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was up this morning and is currently trading down at 97.22 trading between 98.04 and 95.50 and the bias is negative.
Gold was up earlier and now is heading down again. Currently trading down at 1664.62, trading range is between 1653.36 and 1683.25 with a negative bias.
Dr. Copper is at 3.75 up from 3.65 earlier.
The US dollar fell from 79.40 earlier to 79.21 and is currently trading down at 79.27.
** RRR = Risk Reward Ratio
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Written by Gary