Written by Gary
Midday Market Commentary For 11-18-2013
Missed the train this morning – sorry. The volatility is terrific for trading, but the volume is lacking and that in its self bothers me. Very large market moves on low volume and then large drops on heavier red volume doesn’t bode well in the investor confidence column.
By noon the volume had dropped to low and the markets were moving sideways, off their new historic highs, with a slight positive slant. If someone sneezes this market will collapse.
Our proprietary indicators are very much in the negative side. As these markets go higher the more negative they get and not a market I want to go long in.
The RRR** has been very narrow at the opening bell for months and this trend of low volume and narrow trading sessions makes any predictions of session movements nearly impossible, thus making trading futile and mostly unprofitable.
The problem facing traders is that the trading range, which has been so narrow during the trading day lately, that way too much money has to be put on the table just to get back meager gains. 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.
The short term indicators are still leaning towards the sell side at the midday mark, but I would again advise caution in taking a position because of the Fed’s reluctance to give any hints of when the taper will begin. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is going to do, simple as that. If we get Fed tapering in December the markets will certainly react in a negative fashion. If the tapering begins in March 2014, like many believe it will, the markets are going to price that in by declining sooner. I am expecting weak to negative markets for the foreseeable future. Also, many pundits have stated that we may have seen the top – but I wouldn’t count it as long as the Fed continues to hand out ‘Market Viagra’! I would like to see a blowout candle to verify a top along with heavy volume.
The DOW at 12:30 is at 16007 up 43 or 0.27%.
The SP500 is at 1798 down 0.09 or -0.01%.
SPY is at 180.11 up 0.05 or 0.03%.
The $RUT is at 1118 up 1.65 or 0.15%.
NASDAQ is at 3983 down 3 or -0.07%.
NASDAQ 100 is at 3415 down 7 or -0.21%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is sideways.
WTI oil is trading between 94.92 and 93.51 today. The session bias is negative and is currently trading down at 93.58.
Brent Crude is trading between 108.72 and 107.54 today. The session bias is negative and is currently trading down at 107.97.
Gold fell from 1284.49 earlier to 1271.04 and is currently trading down at 1271.20.
Dr. Copper is at 3.152 down from 3.178 earlier.
The US dollar is trading between 80.86 and 80.60 and is currently trading up at 80.82, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary