Wednesday, April 14, 2004
Issue Contents:
| 09:14 | It Doesn't Hurt When We Do Nothing. |
| 09:26 | The Day Ahead U.S. Market Calendar |
| 09:32 | Headlines and Reaction Between the Lines |
| 13:20 | Computer Security New Windows Critical Updates |
| 16:16 | TrendVue Active Trader Today's transcript. |
| 16:16 | TrendVue Trader Talk Today's transcript. |
| 16:16 | So... An Important Juncture |
| 22:44 | Economic Data Summary of Today's Releases |
| 22:53 | Stock Watchlists Most Actives and Volume Surges |
| 23:21 | SwingScanner Results Swing Trade Candidates for Thursday |
Tuesday was a good example of a day to do nothing, particularly for those of us who trade or invest only on the long side.
After exiting swing trades over the past week, we have been watching stocks and markets, looking for some sign a retracement, or a continuation of the move up. Frequently after a strong directional move, we see markets consolidate sideways.
Trading within a sideways market raises our risk dramatically. Fortunately our approach depends on the market coming to us, rather than us pre-supposing what it will do - so there has been little to do here, as there have been few long ideas worth pursuing during this consolidation.
Frequently, doing nothing, is the most important action traders and investors can take.
Here are some potential first targets for the day, all to the downside as the overnight futures point to a lower open.
Reminder: Please join us in the real time Traders Talk forum if you are able as we dissect what is happening during the day. Visit your account page and follow the forum links.
Wednesday, April 14
President Bush hosts Israeli Prime Minister Ariel Sharon at the White House for talks on the Middle East crisis.
- 7:00AM MBA Purchase Applications
- 8:30AM International Trade
- 8:30AM Consumer Price Index
- 7:00PM San Francisco Federal Reserve Bank President Robert Parry speaks about the U.S. & regional economic outlook at St. Mary's College in Moraga, California.
For earnings highlights, please see today's WSJ Earnings Calendar.
This morning's headline needs little reading between the lines.
(WSJ.com) - Core inflation rose to its highest level since November of 2001 as prices for clothing and travel soared. A broad-based increase in exports helped trim the U.S. trade deficit to $42.09 billion in February.
We've seen bonds retreating for almost three weeks, and we will have a complete review of interest rates today. Stocks have been treading water in the face of rising rates, but will they do it for long? We'll review the major stock indices today as well. Once we have the roadmap, we will drill down to sector indexes and individual stocks.
Please note that a number of critical updates have been released by Microsoft, and if your computer uses the Windows operating system, it's time to perform a Windows Update.
For additional information, please visit the section on computer maintenance in our Knowledge Base.
Today's transcript.
Click on the title above to expand this document.
Today's transcript.
Click on the title above to expand this document.
Every once in a while, we get really exhausted from the market's gyrations and back up for a bit while it's chopping. Last week, we identified resistance points on the major stock indexes, and so far, price action not been able to move above the pink lines marked on the daily charts below.
With the bond market eroding in price, i.e. rates rising due to some stronger than expected economic numbers, we now enter a potentially critical juncture. Having enjoyed a great trade on the buy side in March, it is time to get back to work and find opportunities on the swing trading side. Tonight.
MBA Purchase Applications Index 432.2
(Econoday.com) - The Mortgage Bankers refinancing index plunged in the April 9 week, indicating that homeowners are not rushing to refinance their loans before interest rates move higher. The MBA's refinancing index fell 31 percent to 2861.6 in the week, its lowest level since the beginning of the year. The decline reflects the sharp rise in mortgage rates last week, to percent 5.79 percent from 5.52 percent (Freddie Mac).
Trade Deficit -$42.1 Billion
(Econoday.com) - The nation's international trade deficit narrowed in February to $42.1 billion from $43.5 billion in January.
Consumer Price Report +0.5%
CPI, less food and energy +0.4%
(Econoday.com) - For the second time in three months, the CPI posted a sharp 0.5 percent rise. The core rate, which has been very quiet for two years, rose a noticeable 0.4 percent in March.
The annual rates are still benign, at 1.7 percent and 1.6 percent respectively, but are moving, as far as Federal Reserve policy makers and the bond market are concerned, in the wrong direction.
The month's increases are consistent with an expanding economic pace. Job growth, strong consumer spending, and price pressures appear to have all suddenly fallen in place.
The next event will likely be initial warnings, perhaps veiled hints, from Fed policy makers that low interest rates are no longer in the interest of sustainable long term growth.
Medical care, an important category, rose sharply in March and is up 4.5 percent on the year. Apparel also rose sharply in March but is a benign category, down 0.1 percent on the year. Airfares and college tuition also are on the rise.
Energy, as expected, rose sharply in the month, up 1.9 percent but is up only fractionally on the year. This category is always volatile and is not signaling too much danger, especially given high gasoline prices. Gas prices rose 5.5 percent on the month and are up 5.2 percent on the year.
We will review the most active list and the volume surge list later tonight, along with the SwingScanner Results to see if there are any choice swing trade setups for tomorrow.
This list of swing trade candidates were generated by our SwingScanner software. We continue to refine scan criteria and will be finalizing the setup list this week.
Buy Side Candidates
Retracement in Uptrend - Bull Flag:
- No symbols
Retracement in Uptrend - Modified Connors 1-2-3-4:
- ALL
- WMI
- BRCM
- EDS
- TER
- IMCL
- TSG
- NAV
- ANDW
- NET
- CCI
- AOT
- JBLU
- MVL
- ASKJ
- WEBX
- MAMA
Test of Bottom - Modified Turtle Test of 20-day Low:
- FNM
- KFT
- S
Spike Bottom - Potential Extreme ADX Reversal:
- WPI
- UNP
- NOK
Sell Short Candidates
Retracement in Downtrend - Bear Flag:
- No symbols
Retracement in Downtrend - Modified Connors 1-2-3-4:
- No symbols
Test of Top - Modified Turtle Test of 20-day High:
- No symbols
Spike Top - Potential Extreme ADX Reversal:
- No symbols