Monday, July 19, 2004
Issue Contents:
| 08:49 | Economic Calendar Heads up! |
| 09:26 | Swing Trade Setups Featured charts from Friday's close. |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:15 | TrendVue Morning Trader Today's transcript. |
| 16:55 | Symbol Scanner Results Monday July 19 closing data. |
| 17:06 | Nasdaq: Touchdown! Every target reached. |
With last week’s market wrap up in mind we can appreciate that market participants will seek out any positive news to avoid a further break down in price. We’ll find out this week if there is a catalyst ready and waiting to support price – its needed about right now…
Noteworthy this week, Federal Reserve Chairman Alan Greenspan delivers the Federal Reserve’s Second Monetary Policy Report to Congress for 2004 before the US Senate Committee on Banking, Housing, and Urban Affairs. Also up on deck for Tuesday is the monthly Bank of Canada interest rate policy announcement.
Wednesday’s speech by Federal Reserve Vice Chairman Ferguson might prove interesting as well.
- July 20 2:30 p.m. – Testimony – Chairman Alan Greenspan
- July 21 10:00 a.m. – Testimony – Chairman Alan Greenspan
- July 21 1:00 p.m. Speech – Vice Chairman Roger W. Ferguson Jr.: A Retrospective on Business Cycle Recoveries: Are “Jobless” Recoveries the New Norm?
US Market Calendar
- 1:00 pm: NAHB Housing Index – Jul.
- 3 & 6-month T-bill auction
Canadian Market Calendar
- 8:30 a.m. International transactions in securities for May
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.
Featured setups from Friday July 16 closing data symbol scan
Jump to: Long Setups | Short Setups
Long Setups
Retracement or Pause in Up Swing / Up Trend
Continuation Gaps
FON
ACE
Test of Bottom
ADP – note ADP is also listed as a short candidate.
Short Setups
Retracement or Pause in Down Swing / Down Trend
ONNN
SONSE also a test of bottom.
Test of Top
SII – oil related stocks had a strong week last week, with a great many pulling near to recent or even all-time record highs. Its not prudent to short this group recklessly – but aggressive traders may wish to dabble. SII has been included in the short side primarily as a heads-up to those long the group – we must be on guard for reversals in these names.
Test of Bottom
MCRL aggressive traders go short below Friday’s inside bar – given it is a test of bottom, you must demand that price move in your favour quickly. On all such plays a move to a break even stop asap is in order, and consider closing out at the end of day unless a considerable profit cushion is obtained.
ADP – note ADP is also listed as a long candidate.
Today's transcript.
Click on the title above to expand this document.
Today's transcript.
Click on the title above to expand this document.
Monday July 19 closing data.
Click on the title above to expand this document.
Good evening.
Statistics for Monday July 19
| Symbols in Up Swings | 226 |
|---|---|
| Symbols in Down Swings | 428 |
| Up/Down Swing Ratio | 0.528 |
| Close > 20EMA | 44% |
| Close > 50SMA | 40% |
| Close > 200SMA | 45% |
| 20EMA > 50SMA > 200SMA (trend up) | 29% |
| 20EMA < 50SMA < 200SMA (trend down) | 39% |
Nasdaq: Touchdown!
For weeks now we’ve been evaluating the breakdown of trading ranges in Nasdaq and other indexes, laying out one target after another. COMPX (Nasdaq Composite).is the first to touch down at T3, the lows of May 2004, now having retraced almost 100% of the gains from the spring.
This is, of course, a test of a significant bottom - a failure here will raise the spectre of further declines, with the next target being the descending trendline off the weekly charts:
This time last year the COMPX was playing footsie with the 1700 price level.
Also noteworthy:
- INDU (Dow Jones 30) is less than 100 points from the round number of 10,000. Remember the hoopla over the first crossing of Dow 10,000 – those were heady days.
Since then, Dow has traded more below than above 10,000. With only 30 stocks in the index out of tens of thousands in North America, its tempting to dismiss the Down, but we won’t completely discount the relevance of this 30 stock index. The great game is all about sentiment and emotion, after all, and a great many long-time professionals follow every squiggle of the DJ30 closely indeed, not to mention the headline writers whose job it is to scare or enthral the public as required. - COMPX, NYA and INX all formed “hammers”, a well known reversal candle – so well known, that our first instinct is to distrust them and look for failure.
And that is exactly what we are going to do on Tuesday – determine if the attempt at a bounce today can turn into something lasting, or not.
We’ve been trading cautiously on the long side for some time - focusing on sectors and individual stocks which are still pointing up, or avoiding long trades altogether when appropriate. At a test of a significant bottom, it makes sense to trade ultra-cautiously on the short side as well.
Eventually, even in a persistant down trend, selling does end, if even for a while. But despite the briefly spirited attempt at a bounce, it just doesn’t quite feel like its time to pile in. While some individual stocks ( YHOO, JDSU, others ) have intraday charts that now feel like at least a short term climax in selling has been reached, that sense is not yet present across the board.
Reminder: The investment world will be focused on Chairman Greenspan’s testimony tomorrow afternoon.