Opening Market Commentary For 08-01-2013
Premarkets were up significantly suggesting a gap up for the cash crowd and sure enough the markets gaped upwards leaving opening gaps everywhere. Remember they will be closed eventually.
The markets by 10 am were still pushing to new highs and sucking in the street sheeples looking for easy riches. Most analysts looking at the morning financials seem to agree that they were better than expected and continue to impress.
Volume is low to moderate and mostly being contributed to the HFT computer crowd.
My proprietary indicators still read 30% sell and now 50% buy, down from 65%. There is a growing gap between buy and sell and I see that as a bearish sign.
After spending the last two weeks in a 20 point range, the S&P 500 has finally passed the all-important 1,700 level after the Fed’s directionless statement was trumped by Hilsenrath’s confirmation that the Taper ‘may’ be delayed and the late-day collapse in stocks was trumped by a ‘miracle’ from China and this morning’s promises from Draghi.
After its initial spurt off the 6/24 un-taper lows, the S&P surged at a wonderful 200% annualized pace but the sideways oscillation of the last few days has dragged that extrapolated performance exuberance down to a mere 140% annualized.
As a reminder, there is a buyer (retail) for every seller (professional); what could possibly go wrong? It seems ‘on hold’ is the new BTFATH (and sell bonds).
The RRR** was narrow at the opening bell today but the overnight trade was very good. However the trend of low volume and narrow trading sessions makes any predictions of session movements nearly impossible, thus making trading futile and mostly unprofitable.
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 but is expected to become more so as 2013 enters the third and fourth quarters, 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 to guess the swings.
I also have continuing issues with some pundits, writing continually, that there are good setups for day trading. Best Stock Market Indicator Ever: At 91% Falls From 92% Last Week and Secondaries Confirm “Tradable” from Negative. This might be true, but still above ~60% where I think it should be! Hard to believe and challenging to deal with considering ‘not so good’ current events.
There is a wedge between perception and reality that has been going on for some time now where the reality doesn’t match this continued bull run.
The trading range has been 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.
The DOW at 10:30 is at 15647 up 147 or 0.95%.
The SP500 is at 1704 up 19 or 1.13%.
SPY is at 170.52 up 2 or 1.07%.
The $RUT is at 1060 up 14 or 1.38%.
NASDAQ is at 3667 up 41 or 1.14%.
NASDAQ 100 is at 3118 up 28 or 0.90%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is bullish.
WTI oil is trading between 105.10 and 107.77 today. The session bias is bullish and is currently trading up at 107.73.
Brent crude is trading between 107.53 and 109.46 today. The session bias is bullish and is currently trading up at 109.14.
Gold fell from 1327.74 earlier to 1308.12 and gaping at 1318.93 and is currently trading up at 1313.25.
Dr. Copper is at 3.183 rising from 3.102 earlier.
The US dollar is trading between 81.48 and 82.31, gaping at 82.11 and is currently trading up at 82.30, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary