Monday, November 15, 2004
Issue Contents:
| 08:50 | The Day Ahead Economic releases and news. |
| 09:11 | Market Direction Market internals and sentiment indicators. |
| 09:36 | Swing Trade Setups Featured charts for Monday November 15th. |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 18:18 | Swing Scanner Results Monday November 15th closing data. |
| 18:21 | Market Statistics For Monday November 15th. |
Good morning, on this the 320th day of 2004—a light day as far as economic data releases although on the currency front, much of note to economists and traders has been taking place.
As noted in this weekend’s analysis note on Gold, Focus: The Dreaded Yellow Metal, the spectre of currency intervention is being raised more frequently.
- Treasury’s Snow Urges China Forex Reform
- Falling Oil Boost Equities, Dollar Weaker The U.S. currency fell to a seven-month low versus the yen and hit its lowest level against a basket of major currencies since November 1995.
- Treasury Sec Repeats Strong Dollar Policy The United States backs a strong dollar but believes the currency market should determine exchange rates based on fundamentals, U.S. Treasury Secretary John Snow said on Monday during a visit to Ireland.
- Japan looks nervously at plunging greenback but hesitates at intervention on yen “I think the market speculation on intervention is increasing for sure but I don’t think the action is likely coming soon,” said Kikuko Takeda, a foreign exchange analyst at the Bank of Tokyo-Mitsubishi.. In 2003 Japan intervened to the tune of a record 20.43 trillion yen (US$193.65 billion at current rates) to slam the brakes on its currency’s rise, which makes its exports more costly and slashes the profits returned home.
- Dollar falls against yen and euro “Japan has shown itself willing to sell the Yen. European intervention is a long way off, Japan’s is not.” said Robert Rennie, currency strategist for Westpac Banking.
Gold stock investors and swing traders need to keep abreast of the drum beat here.
US Market Calendar
- 8:30 NY Empire State Index
- 3 & 6-month T-bill auction
Canadian Market Calendar
- 8:30 am: Existing Home Sales – Oct.
- 8:30 am: Manufacturing Shipments & Orders – Sep.
- 8:30 am: New Motor Vehicle Sales – Sep
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.
The market is pointing straight up and is within approximately 1 week’s range to retesting the 2004 highs on Nasdaq COMPX / NDX and the Dow Jones 30 which have been lagging for most of the year.
Major Market Indexes – weekly
Whether the market covers this last leg directly or not is the 64,000 dollar question. Over the past three weeks price has moved a distance roughly equal to the entire range of 2004 on the broader S&P 500 index – clearly there has been terrific momentum.
VIX / VXN Volatility Indexes
The volatility indexes VIX and VXN (Nasdaq) are showing some return of investor caution. These sentiment indicators are not useful for pinpointing exact turns, we’ve found over time that the 5 period RSI of VIX can give us a “heads up” that a turn may not be far off.
Market Internals: Nasdaq Composite
Another potential caution can be found in the market internals chart by looking at volume ratio spikes. This indicator plots advancing / declining volume. When the ratio spikes it generally means one of two things: either a new advance is just starting (which is what we saw coming out of the end of October, launching the last big push up), or, the “greater fool” theory is playing out and the market is running out of new buyers to keep advancing price, implying at least a short term pull back or stall is nearby.
In the absence of a clear failure of some sort – either a retest of a recent important high, or a painfully obvious breakdown which initiates a new down swing (which may be minor in nature itself) – we have to assume the market wants to continue up. We’ll be looking for these failures on an intraday basis since no tests are near by on the daily chart. All tops start somewhere…
Featured setups from Friday November 12 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
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
PJC.A (TSX) – carry forward a couple days if this doesn’t trigger today.
POW.SV (TSX) – ditto
NXTL
BRCD – has a little bull flag in this retracement here.
Test of Top – Continuation
EP
CKR
MLNM
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.
Test of Bottom
AKAM – stealth bear flag just above a major test. Target ~ $12
Special Situations
CMGI – long – I remember trading this when it was worth more than 100$ more. Intraday traders only.
Today's transcript.
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Monday November 15th closing data.
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Statistics for Monday November 15
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 603 |
|---|---|
| Symbols in Down Swings | 169 |
| Up/Down Swing Ratio | 3.56 : 1 |
| Advancers | 51% |
| Decliners | 47% |
| Unchanged | 2% |
| Close > 20EMA | 51% |
| Close > 50SMA | 83% |
| Close > 200SMA | 66% |
| 20EMA > 50SMA > 200SMA (trend up) | 44% |
| 20EMA < 50SMA < 200SMA (trend down) | 11% |