Monday, April 5, 2004
Issue Contents:
| 05:21 | The Day Ahead U.S. Market Calendar |
| 05:39 | Market Sentiment CBOE Equity Put/Call Ratio Analysis |
| 05:52 | Market Internals $VIX, $VXN, High/Low Statistics Analysis |
| 06:05 | Forex Strategy Six Currency Pairs |
| 06:33 | Stock Index Strategy I Part One $INDU, DIA, $SPX, SPY |
| 07:24 | Stock Index Strategy II Part Two $NDX, QQQ, $SOX, SMH |
| 07:26 | The Swing Trade Today's Stock Picks |
| 08:00 | Email Backlog Apologies |
| 08:11 | Major Stock Indexes Potential Resistance Points |
| 10:53 | TrendVue Trader Talk Real-Time Room Goes Live |
| 11:00 | QCOM Wrap up. Final thoughts on QCOM. |
| 16:16 | TrendVue Active Trader Today's Transcript |
| 16:49 | TrendVue Trader Talk Today's Transcript |
Monday, April 5
- 10:00AM ISM Non-manufacturing Survey
- 11:00AM 4-Week Treasury Bill Announcement
- 1:00PM 3-Month Treasury Bill Announcement
- 1:00PM 6-Month Treasury Bill Announcement
For earnings highlights, please see today's WSJ Earnings Calendar. Note that the markets will be closed on Good Friday, April 9.
Friday's equity put/call ratio was .534. For about a week now, investors have been extremely bullish, buying calls on stocks.
For background information on market sentiment, please visit the Market Internals, Sentiment and Psychology section of the Knolwedge Base.
Let's have a look at the daily chart. We note that the [$VIX] is now approaching the low end of the Bollinger Band, as fear drops during the rally. At the same time, the 5-day RSI is back under the 30-line, meaning that we need to be on the lookout for Connors VIX Reversal setups this week that will point to a short-term top on the daily chart of the [$SPX] S&P 500 Index.
The [$VXN] is now at the lower Bollinger Band, while the 5-day RSI is also under 30, meaning that we will also be on the lookout for Connors VIX Reversal signals that may point to a short-term top on the [$NDX] NASDAQ 100 Index.
For background information on market internals, please visit the Market Internals, Sentiment and Psychology section of the Knolwedge Base.
It's been a while since we've had a setup in the Forex markets. Since we wrote, we've seen grinding action to the downside by the [EURUSD], while the [USDCHF] slowly grinds up. [USDJPY] went to new lows after the bear flag while [GBPUSD]continues to trace out possible right shoulders on the daily chart. [EURJPY] continues to grind downwards slowly.
The setup that we should be watching here is on the [USDJPY]. Since it's in a downtrend, all bounces are potentially going to find sellers, and on this bounce, we will see if the old low in the 105.17 area is going to be solid resistance. One the daily chart, this is Bar 3 of a bear flag; on a swing trade basis, a sell signal will be triggered on break of Friday's low.
Last Friday, we explained why we had nothing to say about the market, simply because we set up the trade during the week of March 21 and managed to do the right thing at the right time.
At the moment, the [$INDU] Dow Industrials and the [$SPX] S&P 500 Index are still on upswings on the daily chart, so there are no new buy setups whatsoever on this timeframe for their respective index-tracking stocks [DIA] and [SPY].
Same comments apply to the [$NDX] NASDAQ 100 Index and the [$SOX] Semiconductor Index and their respective index-tracking stocks, the [QQQ] and [SMH]. Both of these indexes are on upswings on the daily chart, and there are no new buy setups on this timeframe.
We have no new swing trades for stocks today. As you can imagine, almost all daily charts are on upswings, and until there is a pullback in this timeframe, there will not be any potential buy setups. There might be selected short sale setups coming over the next day or so, and we'll be sure to post these.
Teresa will be taking this day to complete the SwingScanner criteria, while Mike will be bringing the TrendVue Trader Talk real-time text chat room online for newsletter subscribers.
For background information on our approach to swing trading, please visit the Swing Trading Principles section in the Knowledge Base.
I get a steady stream of email messages on an ongoing basis, and this morning, I managed to reduce the inbox to 128 emails left to reply from over 400. But still...
The job of the trader is to simultaneously look at the glass as half-full and as half-empty. While the rally has been a good one, we are always on the lookout for points where it can potentially stall.
On the daily charts of the [$INDU], [$SPX], and [$NDX], I have marked out where we should be looking, mainly because this is where previous swing highs have been located, spots where sellers came out before. On the [$INDU] and the [$SPX] we have to be mindful that we're back to the point of breakdown where sellers came out in force in the past. This area is also represented as the upper end of tall dark candlesticks where traders are supposed to look for sellers.
With this in mind, we will be watching price action closely. If resistance is no longer and issue, the indices should be able to Ka-Pow! to the upside while stalling in this area may give cause for "profit taking".
Subscribers to Strategies for Success are invited to participate in our new real-time text chat room. This forum is where you can meet fellow traders, get in touch with the TrendVue Team for technical support and have questions related to the Strategies for Success newsletter answered.
To access, click "your user name's account" at the top right hand corner of any page, and then go to Real Time Forums. Transcripts will be archived daily.
Lets wrap up discussion on QCOM following our last update. As it has met our swing trading goals, TrendVue coverage of QCOM for this swing trade will discontinue.
After pushing higher at the open, [QCOM] is consolidating in what will probably turn out to be some form of triangle. Those still holding QCOM long need to adjust their exit stop to a price compatible with their objectives.
Given the increased chance that major market indexes may pull back after a strong multi-day run, the swing trader will use areas of consolidation to detect intraday reversals, or use a profit target to set stops.
The investor who has entered QCOM in the hopes that the break out from recent highs will continue will at least have a break/even stop - and also will not be surprised or disappointed if a market-wide retracement begins and QCOM follows along and stops them out. If so, there will be another entry set up in the future.
Today's Transcript
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Today's Transcript
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