Thursday, August 7, 2003
Issue Contents:
Stumbled across this one while surfing. Econoday has the best U.S. Economic Calendar I have ever seen! This one is a keeper!
P.S. Susan, they have the Mortgage Bankers Association numbers on this calendar. Nice!
These are Paul's intraday stock picks for Thursday. He will reveiw each setup for the Real-Time Trading Group at around 11AM Eastern.
- BRCM @ 20.67
- LEH @ 61.82
Prices above should be used as ALERTS.
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Today we are going to do some serious work. Time to look at the top trading stocks. In the meantime, intraday trading poses some challenges as the U.S. Economic Calendar is chock-a-block full of items all day.
The bond market is nervous and needs to see the 10-year Treasury Note auction go well today at 1PM Eastern. Appetite for the 5-Year Note auction yesterday was good, but lending money for five years is quite different than for ten.
At 3PM Eastern, we should also be careful. There are legions of traders who are now focused on the Consumer Credit number.
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[@US, Daily] 30-Year Treasury Bond Futures
Well, with nothing on deck tomorrow to serve as a potential catalyst to move the markets, we should go and revisit the bigger picture so that we are ready when the next move comes.
Last time we looked at this chart, I had the pink line drawn as a neckline in the 109 area. We can now add a second potential neckline, and you can see that this one is actually more elegant because it takes into account a bunch of potential left shoulders going back to October 2002. IF this is a sell of a generation top in bonds, THEN it would not be surprising to see such a big pattern in the making.
Last night, I was watching Kudlow & Cramer, and Larry was telling everyone that it was not surprise to see good demand at the 5-year Note auction. Yes that's true, because those who need to "ladder" - buy fixed income instruments for yield - won't find it too troubling to snap up these babies given the recent spike in yield. Retirees finally get a break.
Five years is not a long time, but what about ten years? We shall know this afternoon at 1PM Eastern, after the 10-year Note auction.
Attention Windows 2000 Users...
...last night, I was trying out online banking and was shocked to be redirected to a page at Microsoft to update to high encryption.
I am a fanatic about computer security and maintance. I treat my machine like royalty, keeping everything updated. How could I not have 128-bit encryption when I perform timely Windows Updates? The answer was further down the page:
I guess letting people with Windows 2000 operating systems know that they never had 128-bit encrpytion is not deemed critical. Go figure.If you are running Windows 2000, installing Internet Explorer 5.5 will not change the current level of encryption on your computer, you will need to install the Windows 2000 High Encryption Pack.
[USU3, Daily] September Treasury Bond Futures
There is a swing trade set up here. When we last visited the USU3 daily chart, the anticipated bounce reached the first upside target and ended on a reversal day being formed.
The big bearish engulfing candle sucked a lot of sellers in yesterday when it did the surprise thing by going up. I guess that's why they always insist on confirmation in candlestick theory, but the fact is that the ADX is FIVE-ZERO on the daily chart, and extreme reading for this symbol and timeframe. It was a huge crash, a wild bungee jump, and we have to expect that the people who rush in to sell will get faked because the bounce is going to be a of a larger magnitude than usual.
Now that the sellers from Tuesday have been cleaned out, aggressive traders can now stalk this bear flag for a short sale on a swing trade basis. The bounce is now in the sweet spot, the 25-40% area. For tomorrow, the short sale alert will be triggered on break of today's low. You can decide if you want to enter intraday for better precision. The target is a climax spike down to test the August 1 low of 104^08.
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[TYU3, Daily] September Treasury Note Futures
When we last visited the TYU3 daily chart, we marked off overhead resistance in the 112^16 area.
Hitting resistance as a we write, the TYU3 has formed a very narrow range day, a Japanese candlestick doji indicating hesitation. This is a swing trade setup on the short side. It's been a big bungee jump. And a big bounce.
If they show up, we don't expect that sellers will be able to push it all the way back down to the August 1 low of 109^201 in two bar (days), but a quick swing down to test potential support at the August 5 low of 110^210 is a reasonable target should sellers materialize in front of next Tuesday's FOMC meeting.
Real-Time Trading Group Transcript
Real-Time Trading Group Transcript