Tuesday, October 19, 2004
Issue Contents:
| 05:27 | Market Statistics For Monday October 18th. |
| 05:27 | Swing Scanner Results Closing data for Monday October 18th. |
| 08:52 | The Day Ahead Economic releases and news. |
| 09:25 | Swing Trade Setups Featured Charts for Tuesday October 19th. |
| 11:58 | Intraday Update: Stock Indexes Looking for direction... |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Statistics for Monday October 18
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 320 |
|---|---|
| Symbols in Down Swings | 460 |
| Up/Down Swing Ratio | 0.69 : 1 |
| Advancers | 65% |
| Decliners | 33% |
| Unchanged | 2% |
| Close > 20EMA | 65% |
| Close > 50SMA | 60% |
| Close > 200SMA | 45% |
| 20EMA > 50SMA > 200SMA (trend up) | 30% |
| 20EMA < 50SMA < 200SMA (trend down) | 33% |
Closing data for Monday October 18th.
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Good morning, on this the 293rd day of 2004. Pre-open stock index futures are pointing to a gap up open, building on yesterday’s strong close.
This morning we have a ton of news for traders to digest. Crude is trading down another 40 cents at 52.80, cheering the market. 51.50 is a potentially key area for support to be tested.
The Consumer Price Index showed slightly higher than exepected rises in some components of the index; initial reaction also seems to be that much of the energy increases of recent months has yet to fully impact the index, so October’s report in November will definitely be one to watch.
We’ll be watching carefully today to see if recent price gains in stocks hold. Gap and Crap days are not that unusual… gap and continue days are.
US Market Calendar
- 7:45 am: ICSC-UBS Weekly Chain Store Sales Snapshot
- 8:30 am: Consumer Price Index
- 8:30 am: Housing Starts1
- 8:55 am: Johnson Redbook Retail Sales Index
- 10:00 am: State Street Investor Confidence Index
- 10:00 am: Federal Reserve Chairman Alan Greenspan speaks in Washinton to the annual America’s Community Bankers meeting
- 12:30 pm: Federal Reserve Governor Mark Olson speaks at Widener University, Chester, Pennsylvania
- 1:00 pm: St. Louis Federal Reserve Bank President William Poole to speak at Delta State University in Cleveland, Mississippi .
- 1:00 pm: 4-Week Bill Auction
Canadian Market Calendar
- 9:00 am: Bank of Canada Interest Rate Policy Announcement (May have an impact on US dollar)
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 Housing Starts Fall 6 Pct. in September WASHINGTON (Reuters) – U.S. housing starts slowed by a larger-than-expected 6 percent in September after two months of gains, but permits granted to builders outpaced expectations, a government report showed on Tuesday.
Featured setups from Monday October 18 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
BEWARE of Gap and Crap. Suggest intraday entries only. If this is a new leg up, the retracement will be shallow intraday and a strong close is almost a must.
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
DTV recently made some topping candles – but interest in the satellite to consumer market seems high. More than one chart in this sector today.
XMSR sat related, piercing line candle yesterday.
DISH sat related – buy stop 33.06
ELNK simple retracement in up trend.
FCEL alternative fuels hasn’t paused much and may just keep going up here. Buy stop 12.86.
CTSH – ADX shows trend in place – buy stop either above yesterday or above the 2 day high for extra confirmation.
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
COF
F bouncing to failed bottom – if doesn’t trigger today, keep on list for another day or two at least. Reported today.
CX Mexican construction materials – stalk this one if it doesn’t trigger short today.
Test of Bottom – Continuation
JPM is still dealing with overhead resistance set on Thursday last week, and a test of a range bottom.
Special Situations
AVP – long – tricky buy just under resistance – big up bar last week gives us reason to try just once to see if this one wants to go back up into the range. Hold only on very strong close.
CNXT – long – one total speculative chart – big triangle – on a big tech up day sometimes a chart like this will give us a solid intraday gain – unless you like the name for some other reason I could consider selling on a big gain.
BRCM – long – inside triangle, included in case life in semi space is broad.
Intraday Update: Stock Indexes
So far today is playing out like a classic gap and crap, pardon the vulgarity. News causes a spike, shorts cover (natural and incented buyers), some new buyers come into the market but when the intial noise and confusion is over, price weakens due to a lack of buyer support.
I am always leery of gaps caused by news from a single stock or two – as this gap was, based primarily on news from IBM and TXN.
Lets look at a big time frame intraday picture:
ES S&P 500 index futures – 45 minute time frame
A rising wedge sets the stage for failure and a potential retest of last week’s lows. While Nasdaq is holding up better, unless ES can push up above and hold 1120, I won’t be adding any new long swing trades except in very specific cases. Conversely, if price action can recover and push above the day’s high, I will want to put more money to work on the long side and in a hurry.
We also have to keep in mind that a great percentage of the market is trading in unison right now – our daily market statistics give a pretty good sense of this. Therefore if the indexes are heading in a particular direction, more stocks than not will follow. Therefore, with the pattern in mind, longer term swing traders and investors need to be cautious with new longs today – they may trigger and reverse direction.
Patterns should not be confused with guarantees. Perhaps the best way to look at a pattern is this: when a major pattern triggers, assume it is in play unless proven otherwise.
For now, the rising wedge pattern is in play. If price action invalidates it, an update will follow.
Today's transcript.
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