Monday, September 8, 2003
Issue Contents:
| 04:23 | Paul's Intraday Watch List |
| 04:32 | U.S. Economic Calendar |
| 04:50 | 2003.09.05 Real-Time Trading Group Transcript This is the text transcript from the Real-Time Trading Group for Friday, September 5, 2003. |
| 04:55 | Good Morning... |
| 08:28 | [SPU3, Daily] S&P Futures |
| 08:30 | Reminder... |
| 08:33 | [$SPX, Daily] S&P 500 Index |
| 08:39 | [$SOX, Daily] Seminconductor Sector |
| 08:45 | [$NDX, Daily] NASDAQ 100 Index |
| 09:59 | [$INDU, Daily] Dow Jones Industrial Index |
| 10:04 | [$XAU, Monthly] Gold and Silver Sector |
| 10:49 | [$XAU, Daily] Gold and Silver Index |
| 10:51 | [TYZ3, Daily] Ten-Year Treasury Note Futures |
| 12:56 | [TYZ3, Daily] Ten-Year Treasury Note Futures |
| 13:02 | [$OSX, Multiple TF] Oil Service Sector |
- GE @ 31.22
- GM @ 42.48
- BEAS @ 14.59
- CSCO @ 20.74
- No symbols.
****
Monday, September 8
- 11:00AM 5-Year Note Announcement
- 11:00AM 10-Year Note Announcement
- 11:00AM 4-Week Bill Announcement
- 1:00PM 6-Month Bill Auction
- 1:00PM 3-Month Bill Auction
- 3:00PM Consumer Credit
Tuesday, September 9
- 7:45AM BTM-UNSW Store Sales
- 8:55AM Redbook
- 10:00AM Wholesale Trade
- 1:00PM 4-Week Bill Auction
Wednesday, September 10
U.S. President Bush hosts Kuwaiti Prime Minister Sheikh Sabah al Ahmad al-Jabir Al Sabah at the White House.
- 7:00AM MBA Purchase Applications
- 10:00AM Treasury Secretary Snow testifies about the regulatory structure of government sponsored enterprises at a House Financial Services Committee hearing in Washington, DC.
- 1:00PM 5-Year Note Auction
Thursday, September 11
Second anniversary of the terrorist attack on the Twin Towers. Stock index futures roll to December as the front month contract for trading.
- 8:30AM Import and Export Prices
- 8:30AM Jobless Claims
- 8:30AM International Trade
- 11:00AM 3-Month Bill Announcement
- 11:00AM 6-Month Bill Announcement
- 1:00PM 10-Year Note Auction
- 4:30PM Money Supply
Friday, September 12
- 8:30AM Producer Price Index
- 8:30AM Retail Sales
- 9:45AM Consumer Sentiment
****
2003.09.05 Real-Time Trading Group Transcript
This is the text transcript from the Real-Time Trading Group for Friday, September 5, 2003.
Click on the title above to expand this document.
...after taking a look at this week's U.S. Economic Calendar, the big event for the bond market will be the bid/cover ratio from the Treasury Bill and Note auctions slated for Monday, Wednesday and Thursday, paying particular attention to the 10-year Note auction on Thursday.
I noticed that some analysts have pointed out that several Federal Reserve officials emphasized the fact that the economy was improving while assuring the bond market that inflationary pressures are not on the horizon. It's quite a feat to maintain this tightrope walking.
From my perch, I got a note in the mail that the storage locker that I rent for my junk is hiking the rate from $95 to $105 per month effective immediately, a more than 10% increase after a year. Gas prices are not going down anytime soon either, and finally, President Bush handed the taxpayers an $87 BILLION bill for operations in the Middle East. With the annual budget deficit now at half a trillion dollars per year, it's hard to imagine how interest rates are going to come down in the foreseeable future, and that means bond buyers on the long end might be quite demanding.
There is really no end in sight to this red ink, as we were finally informed of the obvious, reported in the Washington Post:
Bush also outlined his desire to transform the entire Middle East "by rolling back the terrorist threat . . . at the heart of its power" and establishing democratic institutions in what his advisers have described as a generational commitment to the region, an expansive and costly undertaking.
...But it was more than events in Iraq. Bush was also driven to respond to the message that members of Congress carried back to Washington from their August recess. Not only Democrats but many Republicans returned with a warning to the White House: Tell Americans the truth about what is happening in Iraq and show there is a policy to deal with it.
The bottom line here is not weather we agree or disagree with what's happening in Iraq. The fact is that what is happening is going to cost a lot of money, a lot of borrowed money, and this is going to affect the market, which is our business.
Let's take a look at the daily chart.
Even though this has the "feel" of a fake breakout, the fact is that all this is happening above the upper end of the trading range. What this means is that if the pullback on this timeframe finds support somewhere north of the 20-day EMA above the SP 1003ish level, buyers might come and take it up again.
On a hit and run basis, the short sale setups has now been triggered. The first downside target is a test of the June 17 swing high in the SP 101500 area.
...that the Real-Time Trading Group chat room has now been integrated into our website, and is no longer hosted at PalTalk.
Today is the day we unless the "other cool thing", while Mike and I start on the new Private Trade Desk tomorrow morning.
Let's take a look at the daily $SPX chart.
Like the S&P futures, we have to say that even though the move up last week has the "feel" of a fake breakout, the fact is that all this is happening above the upper end of the trading range. What this means is that if the pullback on this timeframe finds support somewhere north of the 20-day EMA above the SP 1004ish level, buyers might come and take it up again.
On a hit and run basis, the short sale setup has now been triggered. The first downside target is a test of the June 17 swing high in the SP 101500 area.
[$SOX, Daily] Seminconductor Sector
Sometimes is very tricky to look at sector indices. They tend to be filled with gaps, but that's all we've got.
On the $SOX daily chart, what we have here is still within the realm of a test of top. I think everyone can see that last Friday's candlestick formed the Japanese candlestick called the Shooting Star, we need to see confirmation.
Aggressive swing traders can use the break of Friday's low as an alert to look for intraday entries or scalps on the short side, targetting the September 3 low in the $SOX 442 area. Extremely aggressive traders will look at any intraday move back under the August 22 and September 2 swing highs in the $SOX 458ish area as an early entry for a hit and run short sale setup.
[$NDX, Daily] NASDAQ 100 Index
This is the $NDX daily chart. Last week we went over the remorse phenomenon and no sooner said than done, we've got a few candlesticks that are sort of odd lined up here.
Last Friday's shooting star might not be so obvious here, but the bottom line is that it went above a two-day high and closed lower than the open. To be sure, we need confirmation in the form of downside follow through. First support below is the August 22 high.
[$INDU, Daily] Dow Jones Industrial Index
This is the $INDU daily chart.
Again, you can see the pattern. On this pullback, we are looking to see if old resistance (August 22 swing high) will become new support in the $INDU 9495 area.
[$XAU, Monthly] Gold and Silver Sector
This is the $XAU monthly chart.
We noted a long time ago, July 30 to be exact, that there was a possible head and shoulders bottom forming on the $XAU monthly chart. From that perspective, we've now hit the upside target in this $XAU 90 area. Finally, the analysts can declare that gold "is back", but for us, the question is if it can continue up from here.
[$XAU, Daily] Gold and Silver Index
This is the $XAU daily chart.
Given the fact that everyone now knows that the game is on in gold, the appearance of a rising wedge right here may be an indication of exhaustion. We'll see shortly if this is correct, or if this is going to be the big squeeze.
In any event, we need to see what happens on this test of top on the $XAU daily chart.
[TYZ3, Daily] Ten-Year Treasury Note Futures
The surprise to the upside came to pass, and it's now moving to the upper end of the trading range seen on the TYZ3 daily chart.
Given that we are close to the upside target, best to trade this intraday, and expect resistance as we reach the upper end of the trading range.
[TYZ3, Daily] Ten-Year Treasury Note Futures
TYZ3 daily chart reachs the upside target.
[$OSX, Multiple TF] Oil Service Sector
This is the $OSX daily chart.
Even though I don't trade inside congestion areas, I pay attention to them, because once a breakout takes place, we have the option of hopping on for a trade should one set up.
In the case of the $OSX, the prevailing idea was that after the war, oil prices would go down. We thought it was too one-sided to be right, so perhaps there is a long term move coming...to the upside.
This is the $OSX monthly chart. A triangle, lurking. The vehicle to trade this sector index is the OIH. Keep this one on the radar screen.