Opening Market Commentary For 04-02-2013
Premarkets were up fractionally indicating a gap up for the cash crowd. Oil, copper and gold were all down significantly and remained there until after 10 am.
The markets opened up as expected and somewhat of a surprise the SP500 and the DOW again squeaked out new highs before backing down at 10:15. Several gaps were made on the opening which indicates a melting down later on to close them.
Volume is low to moderate and further direction is not being forecast by Mr. Market, you are on your own this session.
What we read this morning.
U.S. factory orders rise 3.0% in February
Factory Orders “Saved By The Transports”; Annual Increase Barely Positive
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: Unchanged at 88% and Secondaries Confirm “Tradable” This might be true, 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 10:30 is at 14655 up 83 or 0.57%.
The SP500 is at 1571 up 9 or 0.58%.
SPY is at 156.94 up 0.83 or 0.53%.
The $RUT is at 942.04 up 3 or 0.34%.
NASDAQ is at 3261 up 22 or 0.69%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish to scary and the current bias is neutral.
WTI oil is trading between 97.24 and 95.92 today. The session bias is bearish and is currently trading up at 96.41.
More Widening For The Brent/WTI Spread Ahead?
Brent crude is trading between 111.50 and 110.16 today. The session bias is bearish and is currently trading up at 110.54.
Gold fell from 1604.00 earlier to 1579.00 and is currently trading up at 1581.60.
Here’s why copper has lost its indicator role
Dr. Copper is at 3.36 falling from 3.40 earlier.
The US dollar is trading between 82.63 and 83.07 and is currently trading up at 83.05, the bias is currently bullish.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary
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