Volume Heavy, Bulls And Bears Have Tug Of War As Markets Remain Flat

Midday Market Commentary For 03-01-2013

If you could have seen the gyrations the market would have provided at the opening, a killing was in the making. First the Indices fell up to 1%, then rose above yesterday’s closing (and then some) and finally by noon the reverse swing was fully in place as the averages started melting back down. Opps, it is melting back up and so goes this session. Interestingly the volume levels have been moderately heavy for both the bulls and the bears.

It remains to be seen who is going to win this war, but so far today the bulls are pushing ahead in game of suspense.

The RRR** has been narrow at the opening bell for the past several months, over a year actually, and has continued the trend into the midday session. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. As of right now, it is too late to jump in to catch the highs and still may be too early to start shorting.

As long as market volume remains light or the trading range is narrow, one can expect successful, or at least profitable, trading to remain elusive. The RRR** has been wider on some volatile sessions lately and is expected to become more so as 2013 enters the first quarter, but unfortunately 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 85% 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 over the past year. 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 12:15 is at 14076 up 25 or 0.18%.

The SP500 is at 1516 up 2 or 0.01%.

SPY is at 151.95 up 0.34 or 0.23%.

The $RUT is at 911.17 up 0.04 or 0.00%.

NASDAQ is at 3163 up 4 or 0.10%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been bearish and the current bias is up.

How Oil Really Gets Priced

WTI oil is trading between 93.20 and 90.27 this morning. The session bias is bearish and is currently trading down at 90.68.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading at 108.54.

Gold fell from 1615.75 earlier to 1665.40 and is currently trading down at 1576.91.

Dr. Copper is at 3.50 falling from 3.55 earlier.

The US dollar is trading between 81.85 and 82.58 and is currently trading down at 82.50, the bias is currently bullish.

** RRR = Risk Reward Ratio

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Written by Gary