Opening Market Commentary For 03-11-2013
The futures were flat at 8 am with the DOW at plus1.00 and the SP500 at -1.20. Other indicators signaled a gap down for the cash crowd as WTI oils was down and the US dollar rose above 83.00. Generally, when the USD goes up the markets go down.
The markets opened down -0.15 to -0.33 but on low volume. $RUT and NASDAQ left a small gap down on the opening reasoning a late afternoon rally today or tomorrow to test recent highs.
By 10 am the volume was anemic, averages flat and not surprising uninspiring.
Several pundits are claiming that now is not the time to abandon the market but there are plenty of reason to reduce your portfolio. One said, “Don’t over-analyze the market. It’s ok to listen to the perma bears a little because they keep you grounded and preclude you from getting too one-sided in your thinking, but don’t let them talk you out of a trade.” Personally, the recent events preclude dipping my toes in although I agree on do not over analyze the market. Low volume is just one reason to be cautious.
NYSE Matched Volume Drops To New Decade Low In February
Someone is obviously not complying with the central-planner script and rotating fast enough into equities.
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and has continued the trend again today. 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 87% and Secondaries Confirm “Tradable” This might be true (for last week anyway), but difficult to deal with. 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 10:15 is at 14396 down 1.05 or -0.01%.
The SP500 is at 1549 down 1.80 or -0.02%.
SPY is at 155.36 down 0.06 or -0.04%.
The $RUT is at 940.67 down 1.81 or -0.18%.
NASDAQ is at 3238 down 6 or -019%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is sideways.
WTI oil is trading between 92.00 and 91.15 today. The session bias is bearish and is currently trading up at 91.45.
More Widening For The Brent/WTI Spread Ahead?
Brent crude is trading at 109.54 today.
Gold traded from 1583.20 earlier to 1576.45 and is currently trading up at 1580.23.
Dr. Copper is at 3.50 down from 3.52 earlier.
The US dollar is trading between 82.66 and 83.12 and is currently trading up at 83.07, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary
