Monday, May 3, 2004
Issue Contents:
| 08:48 | Good Morning. Index review before the open. |
| 09:14 | Note to Subscribers Publication Schedule |
| 09:34 | Canadian Market Pre-open review. |
| 16:16 | TrendVue Active Trader Today's transcript. |
| 16:16 | TrendVue Trader Talk Today's transcript. |
| 16:22 | Focus on NASDAQ 100 Index Technical Update |
| 20:54 | Stock Watch Lists Most Actives and Volume Surges |
| 20:57 | SwingScanner Lists Swing Trade Candidates for Tuesday |
| 21:55 | The Day Ahead U.S. Market Calendar |
Good morning. In our pre-market review for Friday we identified the swing lows of April 21 as an important test for the major market indexes. Our view was that unless a successful test of the April 21 lows came about, the chances of a retest of the lows of March increase.
The Nasdaq Composite [COMPX] continues to trade significantly weaker than the other major averages and is already statistically near enough to test the March 23/24 lows within one trading session.
The S&P500 [SPX], DOW30 [INDU] and NYSE Composite [NYA] are probably not within striking distance of the March lows within one trading session, unless buyers boycott the market completely and an extraordinarily weak trading day shapes up.
Friday's session closed showing the INDU and NYA market indexes as an "inside day", an indication of indecision or a pause. Inside days at swing extremes can often be reversal points.
SPX, INDU and NYA are all within one typical trading session's range of retesting the April 21 lows, opening up the possibility that those markets might trade someone stronger than the Nasdaq if the news environment permits a reversal early this week.
Given the potential for market shaking news (direction unknown) coming out of tomorrows FOMC meeting, it might not be a surprise if these markets trade in a narrow range. A break of Friday's high in SPX, INDU and NYA re-open the potential for a successful test of the April 21 swing lows while a break of Friday's lows would suggest these markets are more likely to join COMPX in its apparent trek to the March swing lows.
We know that market participants are wound up to react strongly to whatever commentary comes out of the Federal Reserve or Chairman Greenspan. The market expects rates to rise, expects the FOMC to tread gingerly yet we've seen strong reactions even as Chairman Greenspan behaves as 'expected'! Therefore prudent investors and traders will want to exercise caution when considering initiating new positions today in advance of tomorrows 2:15pm news release.
If new swing trades trigger today, I personally will only be holding new positions initiated if they close strongly enough to provide a cushion against an adverse reaction to Tuesdays FOMC release.
/Mike
Please note that the regular publication schedule will resume for the newsletter will resume today, while changes have been made to the hours of the real-time coaching service.
Effective Monday, May 3, our real-time coaching service has been renamed TrendVue Morning Traders, and the hours will be from 8:30AM to 11:00AM Eastern, Monday to Friday. At 11:00AM each day, Mike and Teresa will move over to host TrendVue Trader Talk until 4:00PM Eastern.
Subscribers to TrendVue Active Trader will receive an email message this week that outlines the change in billing for reduced services. /Teresa
Not much to add to our last review of the broader Canadian market.
TSX Composite:
The TSX continues to trade below its uppermost range. Unless price can regain this range and hold, we must remain open to the possibiliity that the broad market in Canada has established at least a short term top and may trend lower. Of course, since much of the most recent leg down is as a result of everyones favorite stock (sarcasm intended) Nortel, individual names might be trading as if this range remains intact.
S&P/TSX Midcap Index:
TXMC is trading close to its range bottom and needs to be monitored for reversal, which would set up a successful test of the range lows.
S&P/TSX Smallcap Index:
TXSC has almost reached the target of the measured move out of the triangle.
Today's transcript.
Click on the title above to expand this document.
Today's transcript.
Click on the title above to expand this document.
OK, we are back in full force with our much improved (for everyone) schedule, so let's start again at the beginning.
This is the weekly chart of the [$NDX], the NASDAQ 100 Index. Weeks ago, we put the pair of parallel blue lines on this chart. The lower line was used to mark a potential neckline, while the upper one was used to project how high a right should could potentially bounce.
So far, the upper blue line has been right on the money and now as the [$NDX] comes back down, the question before us is if the neckline is giong to be broken on a test of the March 2004 low. /Teresa
Here are the most active list and the volume surge list.
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.
Buy Side Candidates
Retracement in Uptrend - Simple Bull Flag:
- OHP
- PETM
- ACE
- NSC
- TBI
Retracement in Uptrend - Modified Connors 1-2-3-4:
- EBAY
- IMCL
- KG
- NSC
Test of Bottom - Modified StreetSmarts Turtle Test of 20-day Low:
- INTC
- ORCL
- TASR
- BEAS
- TXN
- HPQ
- IACI
- WMT
- NOK
- BRCM
- HD
- PMCS
- T
- X
- AA
- TEVA
- EWJ
- AMTD
- LLTC
- CY
- DIA
- IBM
- MER
- XLNX
- NEM
Potential Spike Bottom - Extreme ADX Reversal:
- KLAC
- PMCS
- R
- AMTD
- IBM
- MER
- XLNX
- NEM
- FBR
- CMVT
- BK
- A
- IDTI
- ABX
- WPI
- COF
- AGI
- TE
- ICOS
- FD
- FFIV
- SLAB
- IRF
- DLTR
- ISSX
Sell Short Candidates
Retracement in Downtrend - Simple Bear Flag:
- PFE
- WWCA
Retracement in Downtrend - Modified Connors 1-2-3-4:
- FNM
- FCX
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.
Tuesday, May 4
- 7:45AM ICSC-UBS Store Sales
- 8:55AM Redbook
- 9:00AM FOMC Meeting Begins
- 10:00AM Factory Orders
- 10:00AM Challenger Job-Cut Report
- 1:00PM 4-Week Treasury Bill Auction
- 2:15PM FOMC Announcement
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.