Markets Close Down On Low Volume

Closing Market Commentary For 03-21-2013

Today several gap-up’s that occurred in previous session have were closed when the averages took a flash dump around 2 pm lowering the DOW 110 points. That clears the way for more upside to close down gaps made this morning, if that is in the cards.

The low for the day recovered somewhat and then started melting down again towards the close. By 4 pm all of the major indices were in the red, but flat on low volume. One burst of green volume when the ‘dippers’ decided to buy in, but had no effect on the markets final minutes.

Yesterday had a sell of during the final minutes and today we saw some buying. Does that mean we will have an up day tomorrow?

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 91% and Secondaries Confirm “Tradable” This might be true (and difficult to believe), but challenging 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 4:00 is at 14421 down 90.24 or -0.62%.

The SP500 is at 1545 down 12.91 or -0.83%.

SPY is at 154.36 down 1.33 or -0.86%.

The $RUT is at 943.92 down 8.03 or -0.84%.

NASDAQ is at 3222 down 31.59 or -0.97%.

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

How Oil Really Gets Priced

WTI oil is trading between 93.80 and 92.68 today. The session bias is bearish and is currently trading down at 92.37.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 108.22 and 106.65 today. The session bias is bearish and is currently trading down at 106.79.

Gold rose from 1604.50 earlier to 1616.58 and is currently trading up at 1614.42.

Dr. Copper is at 3.44 down from 3.49 earlier.

The US dollar is trading between 82.74 and 83.19 and is currently trading up at 83.00, the bias is currently bullish.

The 500 at the close.

The DOW at the close.

** RRR = Risk Reward Ratio

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Written by Gary