Wednesday, May 12, 2004
Issue Contents:
| 09:11 | The Day Ahead U.S. Market Calendar |
| 09:14 | Economic Data Summary of Today's Releases |
| 09:17 | Before the Bell Index review. Comment on Gold. |
| 16:16 | TrendVue Active Trader Today's transcript. |
| 16:16 | TrendVue Trader Talk Today's transcript. |
| 16:16 | TrendVue Trader Talk Today's transcript. |
| 17:57 | Stock Watch Lists Most Actives and Volume Surges |
| 20:28 | NASDAQ 100 Index Stock Index Analysis |
| 21:06 | SwingScanner Lists Swing Trade Candidates for Thursday |
Wednesday, May 12
- 7:00AM MBA Purchase Applications
- 8:30AM Import and Export Prices
- 8:30AM International Trade
- 1:00PM 5-Year Note Auction
- 2:00PM Treasury Budget
For earnings highlights, please see today's WSJ Earnings Calendar. For a list of speeches, congressional testimony, Federal Open Market Committee material, and statistical releases, please visit the What's Next page of The Federal Reserve Board website.
MBA Purchase Applications Index 494.3
(Econoday.com) - The Mortgage Bankers purchase index keeps on rising, up 2.4 percent in the May 7th week to 494.3.
The index has risen for five straight weeks and is at a 6-month high. Higher interest rates may not be scaring away home buyers, who instead may be stepping up now before rates move yet higher.
But higher rates are definitely slowing refinancing, as the index fell another 13 percent to 2,184.6. The index has plunged by more than half since strong jobs data first appeared in early April.
Import Prices +0.2%
Export Prices +0.6%
(Econoday.com) - Import prices rose a mild 0.2 percent in April compared with March, showing little indication that the softer dollar is raising prices of imported goods.
Unlike March, petroleum prices, down 0.8 percent, drove down import prices. Excluding petroleum, import prices rose 0.3 percent with pressure centered in industrial supplies, reflecting sharp increases in metals prices.
Export prices rose more sharply, up 0.6 percent on the month with pressures once again centered in agricultural prices, which were up 2.6 percent and perhaps reflecting ongoing price increases for beef.
Excluding agriculture, export prices rose a less impressive 0.4 percent.
Trade Deficit -$46.0 Billion
(Econoday.com) - The nation's international trade deficit widened sharply in March to a record $46.0 billion, well above expectations and February's $42.1 billion gap.
Imports rose a sharp 4.6 percent to $140.7 billion against only a 2.6 percent rise in exports to $94.7 billion.
Imported petroleum was only partly to blame, with the petroleum goods gap at a record $12.5 billion vs. $11.1 billion in February. The price of imported oil averaged $30.64 per barrel, up $1.47 from February and the highest in 21 years!
Excluding petroleum, March's gap was still steep at $37.3 billion vs. $35.2 billion in the prior month. A doubling in civilian aircraft, always a volatile category, also pushed imports higher.
The results may cut into the first revision of first-quarter's 4.2 percent GDP pace, though the Commerce Department had assumed a sharp widening in the March trade gap in the advance report.
The gap aside, the rise in imports is in fact an indication of sharpening demand at home. Imports of autos, capital goods and consumer goods were all higher.
The export side is also showing strength, a reflection of the benefits of the softer dollar that has been slow to appear. Exports of autos and capital goods were higher, while exports for civilian aircraft were lower.
Note that some exports, such as for industrial supplies, benefited from higher prices, the result of high demand and scant availability of many metal products.
Country by country, the gap with China widened to $10.4 billion in the month and with Japan to $6.7 billion. The gap with the Euro Area widened to $7.4 billion (note that country balances are not seasonally adjusted).
5-Year Note Auction Yield Awarded 3.927%
(Econoday.com) - In strong results, the high yield for Wednesday's 5-year note auction came in at 3.927 percent, up nearly 71 basis points from last month and up 123 basis points from March!
Demand for the auction was solid despite the ongoing rise in interest rates. The bid-to-cover was a strong 2.64 vs. 2.28 last month, while the high yield was 2 basis points lower than the 5-year yield at bidding time.
But demand from central banks may have been limited as 34.6 percent of the auction was awarded to indirect bidders compared with 40-plus percentages in the prior two auctions (the indirect bidder category includes central banks).
Treasury Budget $17.6 Billion
(Econoday.com) - The U.S. Treasury announced a budget surplus of $17.6 billion in April after posting a sharp $72.7 billion deficit in March. The budget figures are not seasonally adjusted, but April typically sees a large surplus. Individual income taxes were 14.9 percent lower than a year ago for the same month. In contrast, corporate income taxes were 28.5 percent higher than last April. In any case, individual income tax receipts make up the lion's share of total receipts received by the government. Total receipts are 1.3 percent higher for the year-to-date period versus the same period last year. Outlays are up sharply relative to a year ago. Defense outlays are 14.5 percent higher than last April. Medicare and social security costs are also up from a year ago, but by a much smaller magnitude.
/Teresa
Good morning.
Nasdaq significantly outperformed other broad market indexes on Tuesday, presumably in anticipation of results from CSCO last night, which contained lukewarm news of the some good, some ok variety.
SPX, DOW and NYSE Composites formed inside days, at or near the test of the significant prior swing low. Traders will be looking for continuation of the bounce up today or fears will rise that a deeper decline lies ahead.
Should price move up against these indexes we will have to assume that the rally game is on. Clearly yesterday enthusiasm did exist, even on the "boring" NYSE composite, as evidenced by the surge in advancers and advancing volume. We should note that these surges are normally found in bottoming price action, however they are also found at the end of bounces before a resumption of selling.
The bottom line: if price continues to move up, we will assume that a valid test of bottom is in place. If price fails to head up and hold, we'll need to act accordingly. We'll update the site with thoughts on strategies today.
A note on Gold.
As discussed yesterday, the USD is at a juncture where it is testing a number of currencies. A minor pull back, but yet not a continuation failure of existing patterns in the USD, is giving rise to some price appreciation in the Gold contract this morning.
Near Tuesday's close we noted a number of gold stocks close higher, triggering the prior high of day setup that was discussed yesterday.
There's room for Gold to bounce; if you are stopped into a trade be sure that you move your stops to break even, at least, at the earliest possible opportunity to protect against a failing bounce.
Have a good day! /Mike
Today's transcript.
Click on the title above to expand this document.
Today's transcript.
Click on the title above to expand this document.
Today's transcript.
Click on the title above to expand this document.
Here are the most active list and the volume surge list. The SwingScanner List will be posted when it becomes available after 7:30PM Eastern. /Teresa
Last week, we focused on the weekly chart of the NASDAQ 100 Index.
We discussed the potential neckline, which happened to coincide with the 200-day moving average.
Let's take a closer look at the [$NDX.X] by viewing the daily chart. We note that at the March lows bounced off the 200-day SMA and over the past few days, price action has been on the lower end of the congestion area previously marked out, with buyers and sellers battling it out at the 200-day SMA again.
The CBOE equity put/call ratio has risen over the past four days (0.790, 0.874, 0.923) to a high of 0.941 today. Readings near one are often found at short-term panic bottoms, and it was not a surprise to see the sort of violent high-volume spike reversal materialize in the last two hours of trading.
The final analysis is that the [$NDX.X] is still inside a trading range as marked. If that bounce is weak, it will burn out after a few days or less, and then we'll see if the sellers go for the neckline below. /Teresa
These lists were generated by our SwingScanner software based on automated end of day stock scans using predefined criteria. They are listed in descending order, based on today's trade volume, up to 25 symbols per list. /Teresa
Buy Side Candidates
Retracement in Uptrend - Simple Bull Flag:
- MCHP - Looks more like a pennant.
Retracement in Uptrend - Modified Connors 1-2-3-4:
- TXU - Looks more like a spike top to me.
Test of Bottom - Modified StreetSmarts Turtle Test of 20-day Low:
- MO
- PFE
- TYC
- NOK
- VRTSE
- MLNM
- BK
- AMR
- FDC
- AXP
- ERTS
- IACI
- FDO
- GTK
- DG
- ALL
- ERICY
- KO
- DNDN
- PDLI
- LEN
- BLS
- EXC
- PEP
- KFT
Potential Spike Bottom - Extreme ADX Reversal:
- DIA
- NOK
- WMT
- HD
- SNDK
- SEBL
- MLNM
- BK
- AXP
- PDLI
- LEN
- BLS
- IGT
- EXC
- FD
- CZR
- CCL
- KG
- MAY
- MDY
- S
- SDS
- ROST
- DLTR
- XEL
Sell Short Candidates
Retracement in Downtrend - Simple Bear Flag:
- SLB
- XMSR
- HAL
- SOHU
- CD
- CMX
- OIH
- ABX
- MAS
- PXD
- PRU
- GG
- EVG
- HUM
- MET
- PETM
- ETN
- WY
- ATH
- AMX
- HGSI
- AZO
- NFB
- SUN
- PKX
Retracement in Downtrend - Modified Connors 1-2-3-4:
- GLBCE
Test of Top - Modified StreetSmarts Turtle Test of 20-day High:
- No symbols.
Potential Spike Top - Extreme ADX Reversal:
- No symbols.
For background information on our approach to swing trading, please visit the Swing Trading Principles section in the Knowledge Base.