Monday, July 12, 2004
Issue Contents:
| 02:05 | Symbol Scanner Results For Friday July 9 |
| 05:44 | The Day Ahead Economic releases and news. |
| 06:10 | Swing Trade Setups Featured charts from Friday's scan. |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:15 | TrendVue Morning Trader Today's transcript. |
| 20:11 | Symbol Scanner Results For Monday July 12. |
For Friday July 9
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Good morning. Today we are faced with a light news day on economic fronts, so global news, earnings releases, and warnings, shall take centre stage. Through the balance of the week there will be plenty of price-related economic releases to keep traders guessing.
Overnight the Nikkei moved up 1.39%1 following a national election held this weekend. Afganistan President Karzai says militias worse than the Taliban2.
Bill Gates warns that Open Source kills jobs3. In related news, the Mozilla Foundation released new versions of Mozilla, Firefox and other applications to address a security issue discovered barely 24 hours prior4 (visit Mozilla.org to upgrade). Ironically, a recent report shows a noticeable market share loss for Microsoft’s web browser5.
US Market Calendar
- 3 & 6-month T-bill auction
Canadian Market Calendar
- No releases today.
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.
1 Reuters: Nikkei Jumps as Political Worries Fade
2 New York Times: President Calls Afghan Militias a Major Danger
3 CMP: Open source kills jobs, says Gates
4 MacWorld: Mozilla security holes patched
5 MacDailyNews: Microsoft Internet Explorer shows noticeable market share loss
Featured setups from Friday July 9 closing data symbol scan
Pre-Open Review
This morning global news and earnings releases are going to be the major influences for traders. Friday closed showing all the major indexes completing an inside day; COMPX(Nasdaq Composite), INX(S&P 500), and INDU(Dow Jones 30 Industrials) are hovering at or just under what was once support.
Clearly price is starting to become directional once more, as price is covering more ground in a straight line (down) than it had done in the prior three weeks. With an inside bar and potential support nearby, we’ll simply have to see whether buyers or sellers emerge victorious as they square off here today.
We can see a great many charts hovering just below or above recent tests of bottoms. Gut feel suggests that unless the market can find a significant catalyst to spark a major rally in the very near term, sellers are going to be successful in pushing price down through these tests of bottoms. Consequently most of the setups that stood out are short setups. But…
Remember: tests of top and tests of bottom are the only places where if we are wrong, we can trade the other direction. We aren’t being wishy-washy in suggesting that price can go either way here because that is the true nature of the beast.
At least with so many charts lined up for failure, whatever the catalyst and outcome might be, we can surely expect sometime this week a decent move, regardless of direction.
Jump to: Long Setups | Short Setups
Long Setups
Retracement or Pause in Up Swing / Up Trend
HMY (Harmony Gold) on a 2 bar pull back to the trendline break – buy stop 11.20, initial stop if filled: 10.85.
This retracement near the tes of top is getting a little long in the tooth, however the cup and handle formation on the longer term daily chart is one we haven’t seen lately so its worth noting. Buy stop 36.44 and you might well demand that the trade start to work in your favour right away.
Short Setups
Stealth Bear Flags / Test of Bottom Failure
ORCL and many others are showing a single up bar just above or just below a test of a significant low.
A 2 to 4 bar bounce just above a test of bottom, particularly if the bounce exhibits declining volume and range as it progresses, is a bear flag variant we call the Stealth Bear Flag. Target one for the SBF is always the range bottom, or the base of the bear flag, which ever is nearest. These can be excellent short entry setups for both short term 1–3 day swing trades, as well as to establish short positions for longer terms.
The trade entry technique is the same for all – set an alert at Friday’s low; ready a short if the low is broken. Initial exit stops should be set to Friday’s high and brought down to break-even or better at the earliest possible opportunity. Typically these trade setups work well right away (within 1 day) or not at all, so do not overstay your welcome in the event of a slow moving trade.
SIRI
ATML not a stealth bear flag but a single up bar underneath resistance. If ATML rises further, continue to follow it up for another 1 to 2 bars, setting alerts at the low of each prior day’s bar.
FLEX exhibits the classic traits of a bear flag – rising ADX, declining volume on the counter-trend move. Sell alert at 14.19 for today.
MER
BMY
Today's transcript.
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Today's transcript.
Click on the title above to expand this document.
For Monday July 12.
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