In the most recent Weekend Wrap, the flatlining of stocks over the last 21 months was discovered and discussed, but Monday's trading amplified the condition, with stocks stuck in a narrow range throughout the session.
The Dow Industrials traded in a range of 125 points for the full day, but, after the first half hour, the range was no more than 100 points in either direction. The same range-bound condition was true for all the major indices. Trailing into the close, the three majors (Dow, NAZ, S&P) were all down by less than 0.15 percent.
This was likely due to the observance of Columbus Day, which saw the bond market closed, though the lingeing effects of so much central bank tinkering must be playing on the minds of more than a few seasoned traders.
While markets are unlikely to completely seize up, there is the potential for individual stocks to go bid-less for extended periods. Market volume and breadth has been on the skinny side of thin, to say the least. Volatility has been wrung out, except for the occasional algo bounce directly tied to the up and down, on and off trade disputes between the United States and China. This false narrative moves markets, but not in any consistent pattern except for that of a knee-jerk.
The week ahead will feature third quarter results from the banking sector, sure to add some dynamism to an otherwise flaccid affair.
At the Close, Monday, October 14, 2019:
Dow Jones Industrial Average: 26,787.36, -29.23 (-0.11%)
NASDAQ: 8,048.65, -8.39 (-0.10%)
S&P 500: 2,966.15, -4.12 (-0.14%)
NYSE Composite: 12,896.22, -30.70 (-0.24%)
Showing posts with label trading range. Show all posts
Showing posts with label trading range. Show all posts
Tuesday, October 15, 2019
Monday, July 16, 2018
Summer Trading Is Typically Slow; Precious Metals Hammered Of Late
Low volume and tight ranges on all the indices are telling the obvious. It's summer, many large traders are off to vacation spots, investors are sitting pat, and, despite it being the heart of second quarter earnings season, there simply isn't anything to get truly excited about, either on the bull or the bear side.
The Dow spent the entire session within a 90-point range, never falling more than 40 points from the pervious close, finishing the day with a modest gain. The Dow has finished higher eight of the 10 trading days in July.
There's more action in commodities of late, especially in the precious metals, which have been sliding for the past month after peaking short-term in mid-June. Silver slipped below $15 per ounce last week and has been trading in a tight range between $15.70 and $15.95. It appears that hopes for a rebound in real money have been dashed once again and gold also is trading at a one-year low, $1240 per troy ounce.
The price of crude took a hit today as well, with WTI finishing below $68 per barrel for the first time since June 25. The market is fully saturated and demand is flat, so prices should move down gradually for raw crude as well as gas at the pump.
This is really one of the more disinterested or distracted markets in some time. Likely, it's best to sit and wait for some indicator to signal direction.
Dow Jones Industrial Average July Scorecard:
At the Close, Monday, July 16, 2018:
Dow Jones Industrial Average: 25,064.36, +44.95 (+0.18%)
NASDAQ: 7,805.72, -20.26 (-0.26%)
S&P 500: 2,798.43, -2.88 (-0.10%)
NYSE Composite: 12,748.78, -20.73 (-0.16%)
The Dow spent the entire session within a 90-point range, never falling more than 40 points from the pervious close, finishing the day with a modest gain. The Dow has finished higher eight of the 10 trading days in July.
There's more action in commodities of late, especially in the precious metals, which have been sliding for the past month after peaking short-term in mid-June. Silver slipped below $15 per ounce last week and has been trading in a tight range between $15.70 and $15.95. It appears that hopes for a rebound in real money have been dashed once again and gold also is trading at a one-year low, $1240 per troy ounce.
The price of crude took a hit today as well, with WTI finishing below $68 per barrel for the first time since June 25. The market is fully saturated and demand is flat, so prices should move down gradually for raw crude as well as gas at the pump.
This is really one of the more disinterested or distracted markets in some time. Likely, it's best to sit and wait for some indicator to signal direction.
Dow Jones Industrial Average July Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 7/2/18 | 24,307.18 | +35.77 | +35.77 |
| 7/3/18 | 24,174.82 | -132.36 | -96.59 |
| 7/5/18 | 24,345.44 | +181.92 | +85.33 |
| 7/6/18 | 24,456.48 | +99.74 | +185.07 |
| 7/9/18 | 24,776.59 | +320.11 | +505.18 |
| 7/10/18 | 24,919.66 | +143.07 | +648.25 |
| 7/11/18 | 24,700.45 | -219.21 | +429.04 |
| 7/12/18 | 24,924.89 | +224.44 | +653.48 |
| 7/13/18 | 25,019.41 | +94.52 | +748.00 |
| 7/16/18 | 25,064.36 | +44.95 | +792.95 |
At the Close, Monday, July 16, 2018:
Dow Jones Industrial Average: 25,064.36, +44.95 (+0.18%)
NASDAQ: 7,805.72, -20.26 (-0.26%)
S&P 500: 2,798.43, -2.88 (-0.10%)
NYSE Composite: 12,748.78, -20.73 (-0.16%)
Tuesday, May 8, 2018
Peaks, Valleys and Trading Ranges: Stocks Stuck In Trader's Paradise
Another day, another volatile session with a 216-point trading range on the Dow has investors concerned, but traders - those commission-or-volume-based entities that make markets - ebullient.
The range of trade on the day was nothing of concern to anybody, since the levels are far from the extremes. Those extremes on the Dow, since February 8 include a February 26 high of 25,709 and a March 23 low of 23,533 and are dignified on charts as significant peaks and valleys. With the Dow closing somewhere betwixt and between is indicative of a market that simply cannot make up its own mind, since there are roughly equal parts sellers and buyers, but barely any conviction on either side.
Stocks will continue to trade in this 2100-point range until there is some decisive catalyst to lead them either higher or lower. Presently, there is nothing to encourage the bulls nor the bears that a breakout or breakdown is about to occur. What happens during these volatile but rangebound periods are fairly discernable patterns of behavior, most notably stocks bouncing higher off the 200-day moving averages of the various major indices, or correcting lower off the 50-day moving averages.
Stocks being tied to computers and the computers run by algorithms, programmatic trading is ensured.
There isn't much to be said or inferred from this sideways pattern, except that the range continues to be on the low side, with all-time highs from January 26 (26,616.71) becoming a smaller and smaller object in the rear view mirror of the stock market race car.
Nothing is likely to change this pattern until either the peak or valley is breached, though the odds are good that the valley breach will be the eventual winner, leading to a more vicious, faster-paced downturn.
That's not to say that the Dow could not add significantly from its current level. It's a distinct possibility, but one that would probably fail as the index approaches that February 26 peak.
Throw away all the fundamentals, dismiss all the geopolitical news, ignore all data and just focus on the chart. Sometimes - and now is one of those times - it is really that simple.
Dow Jones Industrial Average May Scorecard:
At the Close, Monday, May 7, 2018:
Dow Jones Industrial Average: 24,357.32, +94.81 (+0.39%)
NASDAQ: 7,265.21, +55.60 (+0.77%)
S&P 500: 2,672.63, +9.21 (+0.35%)
NYSE Composite: 12,519.75, +26.40 (+0.21%)
The range of trade on the day was nothing of concern to anybody, since the levels are far from the extremes. Those extremes on the Dow, since February 8 include a February 26 high of 25,709 and a March 23 low of 23,533 and are dignified on charts as significant peaks and valleys. With the Dow closing somewhere betwixt and between is indicative of a market that simply cannot make up its own mind, since there are roughly equal parts sellers and buyers, but barely any conviction on either side.
Stocks will continue to trade in this 2100-point range until there is some decisive catalyst to lead them either higher or lower. Presently, there is nothing to encourage the bulls nor the bears that a breakout or breakdown is about to occur. What happens during these volatile but rangebound periods are fairly discernable patterns of behavior, most notably stocks bouncing higher off the 200-day moving averages of the various major indices, or correcting lower off the 50-day moving averages.
Stocks being tied to computers and the computers run by algorithms, programmatic trading is ensured.
There isn't much to be said or inferred from this sideways pattern, except that the range continues to be on the low side, with all-time highs from January 26 (26,616.71) becoming a smaller and smaller object in the rear view mirror of the stock market race car.
Nothing is likely to change this pattern until either the peak or valley is breached, though the odds are good that the valley breach will be the eventual winner, leading to a more vicious, faster-paced downturn.
That's not to say that the Dow could not add significantly from its current level. It's a distinct possibility, but one that would probably fail as the index approaches that February 26 peak.
Throw away all the fundamentals, dismiss all the geopolitical news, ignore all data and just focus on the chart. Sometimes - and now is one of those times - it is really that simple.
Dow Jones Industrial Average May Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 5/1/18 | 24,099.05 | -64.10 | -64.10 |
| 5/2/18 | 23,924.98 | -174.07 | -238.17 |
| 5/3/18 | 23,930.15 | +5.17 | -233.00 |
| 5/4/18 | 24,262.51 | +332.36 | +99.36 |
| 5/7/18 | 24,357.32 | +94.81 | +194.17 |
At the Close, Monday, May 7, 2018:
Dow Jones Industrial Average: 24,357.32, +94.81 (+0.39%)
NASDAQ: 7,265.21, +55.60 (+0.77%)
S&P 500: 2,672.63, +9.21 (+0.35%)
NYSE Composite: 12,519.75, +26.40 (+0.21%)
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