Thursday, November 4, 2004
Issue Contents:
| 08:34 | The Day Ahead Economic releases and news. |
| 08:47 | Before the Bell Market Indexes |
| 09:24 | Swing Trade Setups Featured charts for Thursday November 4th. |
| 09:35 | Quick Take: Currencies Update on the current situation |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 18:39 | Swing Scanner Results Thursday November 4th closing data. |
| 18:43 | Market Statistics For Thursday November 4th. |
Good morning, on this the 309th day of 2004. Elections now over, all eyes in America return to economic results and external issues.
This morning the Bank of England1 and European Central Bank both announced that monetary policy there remains unchanged, with no rate increases made. The US Dollar index broke down through recent congestion and made a new low for 2004.
This morning’s Jobless Claims report may get more reaction than normal, just ahead of tomorrows always market-moving Employment Situation report.
US Market Calendar
- 6:00 am: Monster Employment Index
- 7:00 am: BOE Announcement
- 7:45 am: ECB Announcement
- 8:30 am: Jobless Claims
- 8:30 am: Productivity and Costs
- 11:00 am: Chain Store Sales
Canadian Market Calendar
- 8:30 am: Building Permits – Sep.
- 10:00 am: Ivey Purchasing Managers’ Index – Oct.
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.
If we look at the primary indexes we can see:
- on NYA(NYSE Composite) and INX(S&P 500 Index) price has broken the recent swing high – these are tests of top on-going, and traders will be watching very closely Wednesday’s low – a break there will be the first signal of failure and a big warning to traders.
- Nasdaq COMPX has been outperforming the other indexes recently on a relative basis. Price action on Wednesday gave some indication that it make need to at least pull back here.
Its really up to the Bulls here to hold price up. Not being willing to trust them, I’ve moved stops up on my holdings quite tightly now. A test of top – on INX and NYA – is where we want to exit if price fails. Aggressive traders will tend to exit holdings on a break of Wednesday’s low; less aggressive / longer term investors will tend to note any break down but look for confirmation in the coming days before exiting core holdings.
Featured setups from Wednesday November 3 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
With NYA and INX at test of tops, markets could head either direction so we have a selection of long and short setups to choose from.
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.
Test of Bottom – Reversal
PDE – a minor retest of prior swing low. This may be ready to attempt a bounce here buy stop 18.38.
Retracement or Pause in Up Swing / Up Trend
BBBY may not trigger today – if not, keep on the list for the next 3 days.
GTW buy stop 5.84 however keep a close eye on the 2 day high, or consider using that as your buy stop + 0.01 since GTW was in a very narrow range yesterday.
SC:C (TSX) buy stop 37.09, caution looking a little extended and may need first to pull back and build a consolidation.
VAR bull flag, buy stop 40.09
PAYX pause above recent test of top – buy stop 33.00
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 Top – Reversal
BSC – a 2B Test of Top and dark cloud cover. Find an intraday bounce near the two day low here, short below any minor / weak bounce. Until now the stock as remained quite strong, so employ tight stops accordingly.
Retracement or Pause in Down Swing / Down Trend
IP remains within a longer term down trend and seems to be having trouble clearing recent resistance. Sell short alert 38.55.
TLAB – bear flag, sell short alert 8.09
Test of Bottom – Continuation
KG – sell short alert at 10.49. There is a target below the August lows – KG so far has shown no real strength after its gap down. Perhaps it wants to go lower, directly.
Special Situations
AMR – short – after hitting target (50 EMA) AMR leaves a dark cloud cover in its wake. Aggressive traders only.
DROOY – self explanatory
US Dollar Index hit new lows for 2004 this morning.
At a major juncture such as this, traders will be asking “what next”. Most currency watchers assume more of the same, which of course makes us wonder if a sell off will come in right as scheduled, since these things tend to avoid meeting the crowd’s expectations.
However, in the long run a weaker US dollar seems inevitable.
EURUSD approaching its historic high.
USDCAD – the CAD continues to outperform, making a new 12 year high against the USD (shows up as a drop on USDCAD chart)
USDJPY – the Yen is in position to make a big move here – creeping along so far.
Today's transcript.
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Thursday November 4th closing data.
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Statistics for Thursday November 4
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 587 |
|---|---|
| Symbols in Down Swings | 187 |
| Up/Down Swing Ratio | 3.13 : 1 |
| Advancers | 77% |
| Decliners | 20% |
| Unchanged | 2% |
| Close > 20EMA | 77% |
| Close > 50SMA | 77% |
| Close > 200SMA | 60% |
| 20EMA > 50SMA > 200SMA (trend up) | 38% |
| 20EMA < 50SMA < 200SMA (trend down) | 18% |
Interesting observation: given the market index moves today, the TrendVue Swing Ratio should be a much higher value than 3.13 to 1, so tomorrow the very first task will be to determine if continuation is in store. While the prospect of a surprise reversal still lurks here we will of course keep an upward bias unless price action tells us otherwise.
First catalyst up, the Employment Situation Report at 8:30 am ET Friday…