Opening Market Commentary For 03-15-2013
Premarkets were up a ‘tad’ (+0.10) and appeared we were going to have another gap up for the cash crowd this Friday morning. The reporting financial were not all that bad and the futures seemed to like the news pushing up a bit before the opening.
The markets opened and all that preconceived euphoria was dashed as the averages started a solid quarter percentage drop on low, but relatively moderate red volume. The ‘dippers’ did make an appearance with one green spike but the action appeared to be fading by the 15 minute mark as the averages started trading sideways.
By 10 am the averages started down again with the SP500 actually leaving a gap at 1560 along with the DOW at 14501 finally bottoming out at ~-0.40%. Both the 500 and the DOW’s gaps will probably be covered before the session is finished today so don’t expect the ‘world’ to end today.
Financial reporting this morning was so-so on the ‘good’ side of things.
The New York Federal Reserve reports its Empire State manufacturing activity index fell in March to 9.24 from 10.04 in February. Readings above 0 point to expansion in the factory sector, and those below point to contraction.
Consumer prices increased 0.7% in February from January, more than the 0.5% increase expected thanks to a 9.1% jump in gasoline prices. Core inflation, which excludes food and energy prices, rose 0.2% in February from the month prior, in line with expectations.
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 much 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 14478 down 60 or -0.42%.
The SP500 is at 1556 down 6.50 or -0.42%.
SPY is at 155.42 down 0.61 or -0.39%.
The $RUT is at 949.77 down 3.30 or -0.35%.
NASDAQ is at 3245 down 14 or -0.44%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is down.
WTI oil is trading between 92.00 and 93.84 today. The session bias was bullish earlier, but has turned negative and is currently trading down at 93.12.
Brent crude is trading between 107.50 and 109.90 today. The session bias was bullish earlier, but has turned negative and is currently trading down at 109.22.
Gold rose from 1577.20 earlier to 1598.48 and is currently trading down at 1595.44.
Dr. Copper is at 3.52 down from 3.56 earlier.
The US dollar is trading between 82.86 and 82.26 and is currently trading up at 82.39, the bias is currently negative.
** RRR = Risk Reward Ratio
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Written by Gary