Friday, September 12, 2003
Issue Contents:
| 00:59 | The Library |
| 08:48 | Paul's Intraday Watch List This is Paul's intraday and swing trade watch list for Friday. |
| 09:11 | Economic Data... |
| 09:30 | Today's Strategy |
| 09:32 | Please Note... |
| 09:36 | [SP Z3, Daily] S&P Futures |
| 09:41 | [TY Z3, Daily] Ten-Year Treasury Note Futures |
- MRK @ 54.00
- MLNM @ 15.53
- IBM @ 88.43
- BA @ 36.11
- AAPL will set intraday alert off the 10/15min charts
- CHIR @ 54.93
****
We still have one more data point to come this morning on the U.S. Economic Calendar. WSJ headline stories:
Wholesale prices rose 0.4% in August amid a surge in food and energy prices, suggesting the threat of deflation may be receding. Retail sales climbed 0.6%, a solid gain, but less than expected given recent tax cuts.
The U.S. economy in the second half is expected to grow at its strongest pace since 1999. GDP should expand at a 4.7% rate this quarter and 4% in the fourth, economists surveyed said, citing accelerated consumer and business spending.
Oracle's net income rose 28% in the latest quarter on increased revenue from software-license updates and product-support services.
Of course, the market always does the confounding thing, which is...
Treasury bonds and notes squeeze UP while...
Dow futures go DOWN on the news. This is why the market is often seen by the public as bizarre, almost as strange at this month's Rolling Stone magazine, with Mary-Kate and Ashley Olsen on the cover.
We note that stories out of Iraq are creeping back into the lists of top headlines. Can't help but to think that a Plan B -- a political solution -- is being assembled to allow a quick "exit, stage left":
U.S. soldiers mistakenly kill eight Iraqi police officers as they chased a car full of highway bandits toward an American checkpoint. In a separate incident, two U.S. soldiers were killed and seven wounded during a raid in Ramadi.
Yesterday saw most of the major market indices bounce intraday, but they formed rising wedges, which are big bounces after a big smash.
You can see them clearly on the 15M charts of the S&P and NASDAQ futures.
Typically, we expect to see the wedges broken to the downside, with the ultimate downside target of testing the base of the pattern.
If we look at the daily charts of most of the major indices, we know that they have now breached important support levels and testing the next one, the 20-day EMA. The resolution of the intraday rising wedges will tell the story.
IF the 20-day EMA cannot hold, THEN expect downside action to intensify as the next levels of support below -- the 50-day MA and what the retail traders will have drawn as the "uptrend" line get tested. Quite often, traders will have sell orders placed just under the "uptrend" line.
...that Mike has been off sick since Tuesday, and hopefully will return to action next week.
In the meantime, there are a few administrative tasks that are outstanding, and he will get to them as soon as he is able to do so. Transcripts from the Real-Time Trading Group will be uploaded over the weekend, as he was working on the automation of this process when he fell ill.
Note that the SP 1515 area has been breached to the downside and so far there is no bounce. Yesterday was also an inside day, which we consider to be a pause after the reversal on the daily SPZ3 chart.
You can see that this is a very important price level. Between the June/July highs and the 20-day EMA, it's a big battle between buys and sellers. With the inside day yesterday, the high and low from yesterday will become breakout alert/action points for traders, so we have to watch the resolution of the intraday rising wedge which is also a test of yesterday's low. If it cannot hold, then we are heading down to the "uptrend" line. So far this is a continuation of the downswing on the daily timeframe.
[TY Z3, Daily] Ten-Year Treasury Note Futures
The move above the upper edge of the trading range seen on the daily chart was the "expected surprise".
The continuation upwards is an extension of the upswing on the TYZ3 daily chart, so no new entry is available in this timeframe.