SP500 Can’t Keep New High And No Help From others

Closing Market Commentary For 02-05-2013

Market closed on a rising note with the SP500 climbing reaching new highs by a point to 1514.96. The other averages never reached their previous highs (close by horseshoe standards) and fell off semi-dramatically on low volume yet remaining in a rising channel.

So many signs, indicators, biased pundits and all of them pointing in different directions. Not much to add as the averages didn’t move in either direction that was outside of the tight developed over the past 5 sessions. This all indicating another sideways movement tomorrow or at least it won’t be a DOW up 400 points.

Actually the last time this happened the markets made a correction that lasted 6 sessions and then drove the averages right back up to where they were. Is this pattern going to happen, only time will tell. (See charts below.)

@SA:

PM Market recap: Stocks snapped back from yesterday’s tumble, as investors eyed steady economic readings in the U.S. (I, II) and Europe, and worries about Europe’s handling of its debt crisis seemed to fall away. Techs, which sold off a day ago, enjoyed strong support from Apple, +3.5%, and going-private Dell. Prices of 10-year Treasurys fell to yield 2.012%.

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. It is too late to catch the highs and may be too early to start shorting, be careful.

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 4:00 is at 13979 up 100 or 0.71%.

The SP500 is at 1511 up 15 or1.04%.

SPY is at 150.99 up 1.45 or 0.97%.

The $RUT is at 906.603 up 7 or 0.81%.

NASDAQ is at 3171 up 40 or 1.29%.

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

How Oil Really Gets Priced

WTI oil was up this morning and is currently trading up at 96.72 trading between 95.95 and 97.08 and the bias is positive to neutral.

Brent crude was up earlier and is currently trading down at 116.57 trading between 114.90 and 116.98 and the bias is positive to neutral.

Gold was up and then descended this morning. Currently trading down at 1672.38, trading range is between 1667.06 and 1684.90 with a neutral bias.

Dr. Copper is at 3.77 down from 3.79 earlier.

The US dollar fell from 79.80 earlier to 79.50 and then rose back up to 79.81 before falling again to 79.48 (and again) and is currently trading up at 79.58.

The 500 at the close.

The DOW at the close.

** RRR = Risk Reward Ratio

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Written by Gary