Friday, November 7, 2003
Issue Contents:
| 06:56 | Good Morning TGIF! |
| 06:57 | Paul's Watch List Stock picks for intraday and swing trades. |
| 07:32 | [$DXC, $HUI, Weekly] Dollar vs. Gold Approaching first targets. |
| 07:45 | [$HUI, $XAU, $GOX, Daily] Major Gold Indices How to see the forest. |
| 07:57 | [$SPX, Daily] S&P 500 Index Technical update. |
| 09:26 | [$SOX, SMH, Daily] Seminconductor Sector Technical update. |
| 09:29 | Daily Swing Trade Setups for today. |
| 13:23 | FTC vs. D Squared TFC challenges Popup Ads |
| 14:08 | Economic Data Roundup A summary of today's key releases. |
| 16:16 | Active Trader Transcript Real time forum log. |
| 20:20 | And on that Note... Putin the Colorful |
Well, it's a great day today!
Friday, November 7 is the last trading day this month before the full moon tomorrow. It's also my daughter Sydney's tenth birthday. Last, but not least, it's National Men Make Dinner Day!
On the U.S. Economic Calendar, participants will be watching to see if the employment situation has improved, to continue confirming that things are indeed improving. From WSJ.com:
U.S. PRODUCTIVITY ROSE at an 8.1% annual rate in the third quarter. Since the economic recovery began in late 2001, productivity has expanded at an annual rate of more than 5%, the fastest pace for a two-year period in over 50 years. Greenspan indicated the Fed will remain slow to raise rates, despite strong economic data. The Bank of England raised its key rate a quarter point to 3.75%.
Watch the bond markets. We're at a VERY important juncture because it is being shouted from the rooftops that the Federal Reserve will not be raising rates any time soon on it's own initiative, unlike it's counterparts elsewhere in the world in response to improved economic outlook and to cool rampant speculation in the housing market.
In general, this means that money will continue gravitating towards countries where rates are higher and/or going up. While the Dollar is extremely oversold in the big picture and this is a well-deserved bounce, the upside is probably limited. In the market's circle of life, this may trigger the next leg of the bond crash, de facto raising rates, which is what seems to be the preferred option for the Federal Reserve. From WSJ.com:
Bush signed an $87.5 billion package for Iraq and Afghanistan, citing the U.S.'s commitment to defeat terrorism. In a separate speech, the president called for democratic reforms in the Mideast.
Ah, more deficits, the government competing in the credit markets with the citizens, potentially driving rates up...
Last, but not least, WSJ reports:
A U.S. helicopter crashed in Iraq near Tikrit, killing six U.S. soldiers. It wasn't known whether the Black Hawk helicopter went down due to mechanical failure or hostile fire.
The escalating violence and casualties since "the end of major combat" brings back memories of the resistance to Soviet military operations in Afghanistan and present day Chechnya. It would be good if we could avoid the same attrition game. Here's a link to some interesting reading.
This is Paul's intraday and swing trade watch list for Friday. He will review the setups for the Level 4 Active Traders at around 11AM Eastern.
BUY SCALPS:
- AA @ 32.31
- MSFT @ 26.31
- NXTL @ 24.20
SHORT SCALPS:
- INTC @ 33.43
Prices above are used as ALERTS to look for intraday entries. If you need additional ideas, don't forget that we have automated Stock Scan Lists as well.
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[$DXC, $HUI, Weekly] Dollar vs. Gold
Let's update our comments on gold vs. the Dollar.
DOLLAR and GOLD BUGS INDEX Weekly: I've added a few lines on this updated chart. We note that this rising wedge on the $HUI chart is a relative of the W Test of Bottom on the $DXC in that they are both potential reversal patterns with the 20EMA as the first target. For the $DXC, the first upside target is the 20-week EMA above at 95ish, while the downside target for the $HUI is the 20-week EMA below at 187ish.
$HUI Weekly: If you want to look at some potential downside targets, we can derive Target 2 off the daily chart, while the weekly helps us derive Target 3, the 40-week MA, which also happens to be the point of breakout just under $HUI 160. Note the ADX on this weekly chart is 48!
[$HUI, $XAU, $GOX, Daily] Major Gold Indices
Let's update our comments from earlier this week.
$HUI, $XAU, $GOX Daily: The two functions that we use in TradeStation the most are the increase and decrease bar spacing buttons. Why? It helps us take a step back and see the big picture, even if we're on the daily chart. Quite often, decreasing bar spacing to squeeze the daily chart bars will show us something that we are not able to see on the weekly, like here on the major gold indices. We can now mark out a potential head and shoulders pattern on all three, and of course, these are now the second downside targets.
It's been ages since we looked at this $SPX, mainly because it seems like I'm starting at it every moment of the day trading the futures contract. Long-term, nothing has really changed.
$SPX Daily: In the big picture, it's still choppy, but over the past few weeks, it's tried to move up more directionally. In the end, it comes down to the fact that it's either in a big rising wedge that becomes a reversal pattern, OR it's about to squeeze a la $SOX in the classic Elliott Wave 4 diagonal triangle (a.k.a. "running triangle"). Either way, both are end-stage patterns.
The point here is that to differentiate the two, we're looking for THURST to the upside away from the upper edge. IF the $SPX can clear this pattern and head up, THEN we'll be trading from the long side, mindful that it will likely be the euphoric climax move from the February/March lows. Any correction from a climax high would be one that would have targets derived from the weekly charts.
[$SOX, SMH, Daily] Seminconductor Sector
$SOX Daily: When we last looked at the $SOX, it looked like it held the top of the pattern to launch into the Elliott Wave 4 climax. And it continues on. The only thing to watch for is a "sudden death" reversal. This is the part where the gut is screaming "BUY!", and if you want to trade, by all means. The only thing you need to do is to know that if it breaks a two-day low, it is time to exit. Stage left. Without delay.
SMH Daily: If we look at the volume of the SMH, it is indeed contracting as it goes up, which is a big negative.
My building lost power for more than 30-minutes this morning, and I was unable to complete work. In any event, there are loads of ideas from yesterday, and we'll just start up again next week.
Well, it's high time this finally happened. This is the link to the story:
New Twist In Unwanted Ads Pops Up, FTC Challenges Ads Posing As Microsoft Feature
A lawsuit against a San Diego firm that allegedly hijacked a Microsoft Windows feature to send pop-ups to unwitting customers who weren't even using the Web, opens a new front in the war against unwanted online advertising.
The Federal Trade Commission Thursday said it obtained a temporary restraining order against D Squared Solutions LLC, which it said created software that used the Messenger Service components of Windows to deliver pop-ups hawking a $30 product that promised to block future ads. The pop-ups would look a lot like a Messenger Service notification, which are generally sent by network administrators to tell users of system malfunctions or printing status.
Most home and non-network office users don't need the feature. But the FTC said a large, gray-colored box would appear in the middle of the screen with a text advertisement hawking the anti-pop-up program.
Or, in other words, the FTC claims D Squared Solutions created the pop-up problem and then tried to sell consumers on a program that would fix it, all without the knowledge and consent of computer users.
D Squared Solutions' pop-ups routinely interfered with other applications like word processors even when the computers weren't using a Web browser, the FTC said. The software, which it reportedly sold and licensed to other companies, could send pop-ups to up to 135,000 Internet addresses an hour with 2 million addresses in its database. It's all been done without the knowledge of Microsoft.
"It seems like the FTC feels like a pretty offensive practice to cause a problem, and then sell someone a solution for that problem. It's like holding a gun to my head and I'll pay you to take the gun away," said Jeffrey A. Greenbaum, an attorney who specializes in advertising and marketing law at New York-based Frankfurt Kurnit Klein & Selz.
Experts say that it's one of the federal government's newest shots in a war against spam and other unwanted and intrusive marketing, which most recently took shape in the extended battle the FTC waged against telemarketing on the do-not-call list. Legislation is winding its way through Congress to define and prosecute spammers, and California recently passed a restrictive law that has sent warning signals throughout interactive advertising.
"The FTC has said that spam is a serious problem, and everyone in government is looking at ways to solve this problem," Greenbaum said. But solving the problem is harder than it seems, because many either operate outside the law – and in many cases, outside the country – and others are difficult to convince to follow best practices.
D Squared Solutions drew the government's ire because it's unfairly using Windows Messaging to coerce consumers into purchasing software. Greenbaum said the FTC seems to be taking a new (and more difficult) tack against spam and unwanted pop-ups. Instead of prosecuting because of deceptive acts or practices -- say, the way the agency has gone after false or dangerous diet claims -- the FTC is saying that the company is being unfair to consumers.
"It's a much more unusual way for the FTC to prosecute them," Greenbaum said. It's more difficult too, he said. ""They [the FTC] had to show that the practice is likely to cause substantial consumer injury, which is not reasonably avoidable by the consumers themselves." That's a tougher standard because the everyday user knows that they're going to come upon many different forms of advertising while on the Web; that's just the way that it is.
"I think the question of what practices are crossing the line in many instances is an open question here," Greenbaum said. "Everyone knows that deceptive practices are clearly illegal but it seems the issue the FTC is reaching here is something beyond that. There may be some types of advertising that are invasive to consumers and interferes so significantly."
Pete Blackwell, chief marketing officer at Cincinnati-based Intelliseek Inc., said he's not surprised by the FTC's action and predicts that it won't be the last action by the feds and the states if the industry doesn't step up and do something about pop-ups. The endless stream of pop-ups and spam e-mails have struck a nerve with consumers; three separate Intelliseek surveys found consumers say pop-ups are more annoying than even spam and telemarketing.
"We may see more of this [government action] without any self-regulation by the industry," said Blackwell, who moderated a panel on pop-ups at Ad:Tech earlier this week. "I think the advertising groups should be really sensitized to these practices, because they inherit a lot of the ill well from consumers."
Several firms that specialize in above-the-board pop-up advertising declined comment for this story about what the FTC's action could do to the industry, saying they didn't want to be associated with the kind of "bad actor" practices the FTC is alleging. But Blackwell and others say that the FTC's enforcement action could start with the seamier marketers and then branch out to affect everyone using pop-ups.
Blackwell said that some online marketers are faced with a dilemma, challenged to look at the big picture -- the 95 percent of Internet users who find pop-ups annoying, not the 5 percent or so who play with the ads. He said that marketers use pop-ups because there's a short-term return on investment but, collectively, the pop-ups collect exhaust that sucks the life (and the interest) out of consumers for what he said had potential for permission-based marketing.
He urged the industry to take up the challenge of self-regulation now, before the federal government and the states do it for them in a way that marketers will find restrictive. He pointed to California's anti-spam law as an example.
"Absent any form of industry self-regulation, it can take you on a dangerous path," Blackwell warned.
A telephone number for D Squared in San Diego couldn't be located Thursday. A lawyer who represented D Squared as recently as the summer didn't return phone calls Thursday.
In court documents, the FTC listed 30 Web sites that it said were operated by D Squared and its licensee. They included blockmessenger.com, broadcastblocker.com, broadcastbuster.com, roadcastermarketer.com, bustpopups,com, fightpopups.com, messengerbegone.com, killmessenger.com and saveourprivacy.com.
"This is only the beginning," Greenbaum predicted. "The FTC is making some very, very strong arguments here and it's going to be a fascinating case to watch."
All quotes are from Econoday.com
Non-farm Payrolls +126,000
Unemployment Rate 6.0%
The number of workers on U.S. payrolls surprised analysts and was up by 126,000 in October. This was the second monthly increase after seven consecutive months of declines. The September increase in employment was revised to 125,000 from the originally reported 57,000.
Wholesale Trade Inventories +0.4%
Wholesale trade inventories increased 0.4 percent in September after edging down 0.1 percent in August. Durable goods inventories rose 0.2 percent while nondurable goods inventories increased 0.5 percent.
Consumer Credit +$15.1 Billion
Consensus estimate for an increase of only $5.8 Billion.
Real time forum log.
Click on the title above to expand this document.
This is the link to the story, filed by Julius Strauss in Moscow:
Putin's Language is Becoming the Talk of the Vulgar
President Vladimir Putin has a reputation for foul-mouthed asides, but Italian journalists sitting in straight-backed chairs in a Kremlin reception room cannot have expected what was coming.
Opposite them, Vladimir Putin, immaculately dressed and statesmanlike, answered a question about one of the country's notorious billionaires. The interpreter's voice petered away into embarrassed silence. "You must always obey the law, not just when they've got you by the balls" is a rough equivalent of what Mr Putin had said.
For a western politician such a salty choice of words, shown on national television, might mean political embarrassment, even censure.
But President Putin, once seen as a faceless KGB officer with a wooden delivery, now regularly sprinkles his public statements with the argot of the street. Moscow liberals are appalled and say he is betraying his lack of pedigree for the highest office in the land.
But many ordinary Russians adore Putin's earthy indiscretions for the grit and defiance of convention that they convey.
For many, they carry echoes of Nikita Khrushchev, the most boorish of Soviet leaders who took off his shoe at the United Nations and banged it on the lectern.
Prof Robert Russell, the head of the Russian department at Sheffield University, said: "Like Khrushchev, Putin has an earthy turn of phrase. It means people see him as one of their own. He's always controlled and usually rather unemotional but there's something else Russians respond to, something more visceral. I think he does these things deliberately for that reason."
Mr Putin had only just come to power when he uttered his first corker, saying he would deal with Chechens by "wiping them out in the shit house".
Last year when a French journalist asked a hostile question at a European Union summit in Brussels, the Russian president said: "Come to Moscow. We can offer you a circumcision. I will recommend a doctor to carry out the operation in such a way nothing else will ever grow there again."
When the translation was released, European Union officials expressed their fury. In Russia it ruffled few feathers.
In recent history, the Kremlin has not been blessed with great orators. Joseph Stalin, who had a gruff Georgian accent, was repetitive and uninspiring. Leonid Brezhnev was interminably hard on the ear, especially after his first stroke. Mikhail Gorbachev spoke bureaucratic, convoluted Russian. Boris Yeltsin's tone was annoyingly familiar and his words often slurred.
Mr Putin, by contrast, has shone.
"He is the first president we can call a professional public speaker," said Alexander Volkov, a linguistics lecturer at Moscow State University.
When the cameras stop rolling, Mr Putin is even reported to resort to mat, the bawdy and highly taboo domain of Russian invective that forms the mainstay of prison, military and teenage street slang.
According to the Russian writer Victor Erofeyev, Mr Putin told the veteran Communist leader Gennady Zyuganov: "We don't fucking need a military base in Cuba!"
Perhaps Mr Putin's vocabulary owes something to the example set by his hero, Peter the Great. Mr Erofeyev says that while decapitating rebellious Kremlin guards, Tsar Peter let out an immense stream of foul language, "a legendary tapestry of 74 words woven together by the force of his wrath".
Nevertheless the diminutive judo black-belt continues to quarry the mines of the vernacular with confidence.
At a recent meeting of leaders of the former Soviet states, he urged them to work harder and to stop "just chewing snot from one year to the next".
Have a good and safe weekend!