Tuesday, November 9, 2004
Issue Contents:
| 09:14 | The Day Ahead Economic releases and news. |
| 09:19 | Market Direction Quick take |
| 09:52 | Swing Trade Setups For Tuesday November 9th |
| 11:51 | Quick Take: Currencies US Dollar Index, CAD, EUR, GBP, JPY |
| 12:47 | Tradestation Tools Update Free market internals workspace for Tradestation 8 users. |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 22:27 | Swing Scanner Results Tuesday November 9th closing data. |
| 22:33 | Market Statistics For Tuesday November 9th. |
Good morning, on this the 314th day of 2004. With little market-moving economic news today, traders look to company-specific stories and upcoming earnings report (CSCO reports after the close) for direction.
We don’t generally expect much movement from the market in advance of an interest rate policy decision—while the market is all but certain there will be an increase set in tomorrow’s decision by the Federal Reserve, a big question for markets going forward is whether the Fed will change its outlook for future rate increases for what many believe is a slowing period of growth ahead.
US Market Calendar
- 7:45 am: ICSC-UBS Weekly Chain Store Sales Snapshot for the week ended Nov. 6
- 8:55 am: Johnson Redbook Retail Sales Index for the week ended Nov. 6
- 10:00 am: Wholesale Trade – September
- 1:30 pm: Treasury refunding
Canadian Market Calendar
- No releases.
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.
Here we are, the day before an all-but-certain rate increase by the Federal Reserve and markets are stalling:
One has to wonder why the stall – what, exactly, could the Fed say that would stop the market advance? Probably nothing in fact. A better question is whether the latest advance has legs and for that we have to look more closely that growth forcasts from reporting companies. We’ll try to get a handle on that this week.
Markets are at a point where any significant decline will trigger selling based on two factors: 1) a desire to lock in profits and 2) tests of important highs are frequently used by market participants big and small as go/no go points.
In the meantime, we’ll see if we can’t find some stock-specific opportunities this morning. I find when markets are treading water that its generally best to wait for the first 30 to 60 minutes to get a sense for overall market direction and mood before committing capital. Stock picks will be available in the next 30 minutes.
Please check out the real time transcript of TrendVue Trader Talk for today’s swing trade setups—or join us in the real-time discussion room by visiting your account membership page here and click on the Real Time Forums link.
Snap shot view of major currencies:
USDCAD is bouncing a little here this morning – however there is a ton of overhead resistance and the trend is certainly down, so until proven otherwise, we’ll just have to assume that any bounce will find sellers and ultimately fail.
Certainly I will take advantage of bounces to sell USD in exchange for CAD. I follow USDCAD closely as I’m continually exchanging trading profits in USD to CAD in order to pay the bills around here. For my next exchange I simply will follow any up bars here with an alert at the days low and sell when that alert is hit.
USDJPY like USDCAD has a minor up bar forming here and remains in a downtrend, with USD just off historic 12 year lows against the CAD.
Today the EUR is bouncing around its prior historic high value from earlier this year, after having set a new record yesterday.
And rounding out the picture, the Pound / Dollar poked through a long term trendline this week.
Conclusion
When everyone is focussed on currencies and starting to moan about them, we would not be wrong to watch the charts for a contrary move. But until a reversal in the fortunes of the US Dollar are evident, we’ll have to assume that the bigger picture – a break out (and down) from consolidation within a longer term down trend – is continuing to play out.
Its that simple, and should the situation change we’ll be on top of it.
Updates have been made to the TrendVue Market Internals workspace for Tradestation 8 – free download available in the tools section.
Today's transcript.
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Tuesday November 9th closing data.
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Statistics for Tuesday November 9
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 458 |
|---|---|
| Symbols in Down Swings | 316 |
| Up/Down Swing Ratio | 1.44 : 1 |
| Advancers | 49% |
| Decliners | 49% |
| Unchanged | 2% |
| Close > 20EMA | 49% |
| Close > 50SMA | 78% |
| Close > 200SMA | 61% |
| 20EMA > 50SMA > 200SMA (trend up) | 40% |
| 20EMA < 50SMA < 200SMA (trend down) | 13% |
Stocks pulled back or moved sideways now for a second day, with now almost one half of the market in a new down-swing. On Wednesday we’ll learn if the Federal Reserve changes its language with respect to future rate policy changes, and we’ll also get a read on investor sentiment in seeing how the market reacts to the news or lack thereof.