Friday, July 9, 2004
Issue Contents:
| 04:45 | The Day Ahead Economic releases and earnings. |
| 05:05 | Market Review & Strategy One of these things is not like the other.... |
| 09:33 | Swing Trade Setups For Friday July 9 |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning. Today conglomerate General Electric (GE) and Abbott Laboratories (ABT) report before the open and may well set the tone out of the gate.
Crude Oil remains above $40, Gold is threatening to break break out of the last months range. Overnight trading has Nasdaq and S&P500 futures up marginally yet price remains close to the bottom end of Thursday’s trading range.
US Market Calendar
- 10:00 a.m. Wholesale Inventories
- 10:30 a.m. Weekly Leading Index for the week ended July 2
Canadian Market Calendar
- 7:00 a.m. Employment Report – June
- 8:15 a.m. Housing Starts – June
- 8:30 a.m. New Housing Price Index – 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.
While most sectors saw sellers come out on Thursday, Nasdaq and technolgy continue to act weaker than broader market measures. Overall market statistics continue to show a weakening across the board, with fewer than 20% of stocks in our trading universe closing higher than their 20 period moving average.
Statistics for Thursday July 8
| Symbols in Up Swings | 178 |
|---|---|
| Symbols in Down Swings | 478 |
| Up/Down Swing Ratio | 0.372 |
| Close > 20EMA | 18% |
| Close > 50SMA | 43% |
| Close > 200SMA | 48% |
| 20EMA > 50SMA > 200SMA (trend up) | 35% |
| 20EMA < 50SMA < 200SMA (trend down) | 31% |
COMPX(Nasdaq Composite Index) has broken down out the trading range established over the past month. while NYA(NYSE Composite), INX(S&P 500 Index), and INDU(Dow Jones Industrials) remain within the range, either about to test the bottom or within a day’s trade of doing so.
Nasdaq and NYSE market internals show a clear and marked difference in underlying support for equities, with NYSE advance/decline volume ratio having only just kicked over to point down. Of note in the big picture, the COMPX has again retraced 24% of the move up from the start of the broad market rally which commenced in February 2003.
The bottom line: markets are within an easy day’s trading range of retesting / revisiting the recent range low. If recent previous Friday’s are any guide, any positive movement is likely to be muted at best, therefore its unlikely that we’ll see long-side trade setups trigger off the indexes / futures / ETFs. Selling, on the other hand, tends to bring out all hands regardless of which day it is.
As the current market statistics underscore, the odds are against us for long side trades. Strategy for today: hold off on new long trades unless a solid reversal becomes evident. Even if market participants are able to start the process of reversal, its more likely than not we'll have to wait until Monday for confirmation. We will of course post an intraday update should the picture change appreciably.
Featured setups from Thursday July 8 closing data symbol scan
Note: We are implementing a few refinements to the symbol scanner today. A document detailing the logic behind the scan criteria will accompany the changes. The goal is to narrow the list to make review a less daunting task for all!
Don’t forget to join us in TrendVue Trader Talk, or review the nearly-live transcript at http://www.trendvue.com/transcript, to access more ideas raised during the day.
Jump to: Long Setups | Special Situations
Long Setups
Retracement or Pause in Up Swing / Up Trend
Oil service stocks have shown strength as of late. PDE offers a 2 bar retracement in an uptrend. Buy stop 17.35.
!
!
PDG and other gold names are moving up along with the Gold Contract itself. PDG in particular has presented one continuation gap after another. Buy stop 17.28 above the harami at this test of a swing high. As PDG is at a test, keep stops tight.
Special Situations
APA can go on our long and short watch lists. Within the petrochemical complex we see a number of charts where price has consolidated for a number of weeks and is now pushing to retest recent highs. The surprise move for many of these may just be higher yet. For a potential long put charts like APA on close watch and look for a minor retracement near the test of top above which to place a long buy stop.
XLE can be used as a proxy for the petro group if you prefer.
Today's transcript.
Click on the title above to expand this document.