Friday, October 15, 2004
Issue Contents:
| 08:52 | The Day Ahead Economic releases and news. |
| 09:29 | Swing Trade Setups Featured charts for Friday October 15 |
| 11:56 | Intraday Update: QQQ Believe it or not... |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning, on this the 289th day of 2004 – its options expiration day.
Pre-open, stock index futures are up marginally, getting a little lift from a positive Retail Sales report1. Producer prices2 showed a less than expected uptick in the headline number, due to lower energy costs of certain types (primarily LPG) over the reporting period, but the Producer Price Index showed an unexpected gain of 0.3 percent. Since natural gas and heating oil have surged in this latest reporting period, the market will be jacking up cost increase expectations for the next report.
With crude at $54.41/bbl, perhaps Federal Reserve Chairman Alan Greenspan’s speach on Oil at noon today will rattle one market (oil) or another (equities).
Delta Airlines (DAL) announced this morning a much wider loss than the street estimates, citing weak domestic fares and, you guessed it, the price of oil. Most of the airline stocks are “hard to borrow” indicating that they are heavily shorted, which comes as no surprise.
US Market Calendar
- 8:30 am: NY Empire State Index
- 8:30 am: Producer Price Index
- 8:30 am: Retail Sales1
- 9:15 am: Industrial Production
- 9:45 am: Consumer Sentiment
- 10:00 am: Business Inventories
- 12:00 pm: Federal Reserve Chairman Alan Greenspan speaks about oil at a meeting of the National Italian-American Foundation, in Washington.
Canadian Market Calendar
- 8:30 am: Manufacturing Shipments& Orders – August
Earnings and the Federal Reserve
For earnings highlights, please see today's WSJ Earnings Calendar.
For a list of upcoming speeches, congressional testimony, Federal Open Market Committee material, and statistical releases, please visit the What's Next page of The Federal Reserve Board website. Recently released Federal Reserve Board material, including market moving FOMC decisions and speeches by members, will be found on their What's New page.
1 U.S. September Retail Sales Rise 1.5%; Ex-Autos Increase 0.6%
Oct. 15 (Bloomberg)—Sales at U.S. retailers rose 1.5 percent in September, the most in six months, led by spending on automobiles and general merchandise.
2 Producer Prices Up 0.1 Pct, Energy Drops (Reuters) – U.S. producer prices edged up just 0.1 percent in September, held back by a big energy-price drop, but the cost of non-energy items picked up steam, a government report showed on Friday.
Featured setups from Thursday October 14 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
Honestly – I like very few of these setups. DNA looks interesting. HLTH may as well. Lets see there the indexes go and look for others based on that outcome. Visit TrendVue Trader Talk for more ideas early this morning. Gold stocks are where I am going to look next.
Be careful of one day wonders…
Long Setups
General common strategy: Unless noted otherwise, buy stop just above the “high” value, with an initial protective stop at the low value of the bar, not below the bar.
Retracement or Pause in Up Swing / Up Trend
AMKR – intraday traders only, if the market surprises and pushes up strongly today, this one is positioned to exploit such sentiment. Long 4.57, initial protective stop if filled 4.30. Would recommend setting alerts rather than a buy stop, and find an intraday spot to enter and deploy tighter stops than normal.
LVLT is unlikely to trigger but its seen huge percentage moves lately and once in a while one of these does exactly what we want. Put an alert on the high of day and look closely if price happens to move there.
YHOO – this one is somewhat likely to trigger the long alert to be placed at 35.16 but we want to trade this one using intraday entry techniques and tight stops in case it puts in a marginal up bar and reverses (as so many tech stocks have done recently). Close to a significant high, there may be some remaining buyers out there willing to step up.
RFMD last of a selection of tech stocks with down bars in up swings – you can also go through the list found at http://www.trendvue.com/latestscan and check the “outliers” section – RFMD long alert at 7.14.
CKR – long above a minor pause – intraday traders only. Alert at 12.26.
EAT – a trend here in restaurant stocks? Long alert 31.91.
Short Setups
General common strategy: Unless noted otherwise, place a sell alert at or just below the low of the setup bar, and look for the first failed intraday bounce after the low has been broken. What we are looking for is price to push down, bounce a little, and fail again – this is where we want to get short.
Retracement or Pause in Down Swing / Down Trend
VCLK had a big outside bar Wednesday and left a tiny inside bar yesterday – aggressive intraday traders can put a sell short alert at 8.99.
HLTH – triggered yesterday but no continuation – so put an alert at the two day low and lets see if it gets going down today.
Special Situations
WDC – long – poked through the rising trendline and also has a somewhat ageing bull flag / classic retracement in an up trend. Buy stop 9.08, protective stop if filled 8.88. Suggest intraday traders only and tighter stops.
DNA can go either way here, but I personally will not trade it long here, just avoid it i f it moves up. Sell alerts at 46.99.
Believe it or not, QQQ remains in an upswing, even after the price moves of the last couple of days. There remains the potential for a market move higher, and we are ready to pounce if price starts to trigger intraday entry setups.
At the same time, QQQ has yet to crack recent lows unlike the S&P 500 – it may simply be lagging and join the fray soon. On the short side most of our attention is on index futures – QQQ or SPY or DIA can be used as well – as we ready ourselves to re-establish shorts once news hits the streets from Chairman Greenspan’s speech.
Intraday trade action in futures clearly tells us that the market is waiting for Chairman Greenspan’s speech notes to be released at noon. Oil is trading near the high of day, and near the all time high.
Traders want to hear what his comments are on oil as an impact to the economy. Until then, we are avoiding the chop, managing positions from yesterday in oil services, new positions in Gold (PDG and many others moved nicely higher today) and holding on to our capital while others get ground up in the chop.
1 minute to go…
Today's transcript.
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