Tuesday, August 3, 2004
Issue Contents:
| 08:41 | The Day Ahead Economic releases |
| 09:17 | Swing Trade Setups Featured charts from Monday August 2 scans. |
| 09:29 | Good Morning. Oil at record highs, again. |
| 13:04 | Nasdaq: Intraday update Broken wedge scenario |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:15 | TrendVue Morning Trader Today's transcript. |
| 16:55 | Stock Scanner Results Tuesday August 3 closing data. |
US Market Calendar
- 8:30 a.m. Personal income for June, Consumption[1]
- 9:00 a.m. ICSC-UBS Weekly Chain Store Sales Snapshot for the week ended July 31
- 9:00 a.m. Johnson Redbook Retail Sales Index for the week ended July 31, vs. June
Canadian Market Calendar
- No scheduled releases.
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.
fn1. "Consumer Spending Dives Sharply in June":http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5858217&src=rss/businessNews§ion=news
Featured setups from Monday August 2 closing data symbol scan
Note: We will be looking at additional charts in TrendVue Trader Talk this morning, including Telecom Equipment Makers.
Jump to: Long Setups | Short Setups | Special Situations
Long Setups
Retracement or Pause in Up Swing / Up Trend
LRCX has a higher swing high and low since testing a bottom in July, and offers a down bar to place a buy stop above – buy stop at 23.85, initial protective stop if filled: 23.26.
Test of Bottom
TXN offers the first retracement after a small test of bottom. Its also the first retracement after piercing a trendline from the late June highs through the declining highs of late (not drawn on chart). Its not an ideal test of bottom, but perhaps a lower risk opportunity to try to catch a push up here just the same. Buy stop 21.33, initial protective stop if filled: 20.82.
MU is also a small continuation gap; a messy test of bottom which has been visited numerous times over the past few months and that remains a caution. Buy stop 13.50, initial protective stop if filled: 13.10.
Continuation Gaps
Gaps are as frequently turning points (reversals) as they are an indication of strength or weakness in a stock. The technique for trading potential continuation gaps (long) is to buy just above the first down after the gap up, and we must demand a positive close for our position, or simply bail the position intraday and wait for another opportunity.
AKS Buy stop 6.69, initial protective stop if filled: 6.43
JDSU (TSX:JDU) Buy stop 3.48, initial stop if filled: 3.32.
GLW Buy stop: 12.44, initial protective stop if filled:12,24
MRVL Buy stop: 23.46, initial protective stop if filled: 22.80
Short Setups
Retracement or Pause in Down Swing / Down Trend
BMY sell short alert at 22.83
Test of Top
Special Situations
SNDK comes up in discussion in TrendVue Trader Talk due to subscriber interest. There isn’t a terribly good setup here, but at least a down bar within an upswing provides a potential lower risk entry point, given the increased risk associated with entering any trade when price is so obviously moving in tight congestion. Buy stop 24.23. Caution, SNDK never did fill the gap. Its not a given that a stock always will, but it remains a danger point.
An interesting day is shaping up here. Oil hit a new high of 44.24 earlier today, prompting a reaction from OPEC that these prices were “crazy”.
What’s interesting is that oil pushed almost directly higher over a continuation gap. Its still early in the gap resolution process – traders will very carefully be looking for any signs of failure, and if that smell is in the wind, sellers will pounce.
After a slow start yesterday, all major indexes managed to put in a higher high on Monday with the exception of Nasdaq.
This has left a fairly good selection of long-side trade opportunities in technology. Using our approach, we’ll only get stopped into trades if the market can manage an attempt to go up, so the fact that futures are pointing down a little pre-market doesn’t concern us at all.
So far, the broken wedge scenario first discussed on Friday is playing out.
After breaking the wedge, price bounced to resistance ( the break near the apex of the wedge ) and has moved down. 1387 / 1411 are the key areas to watch on Nasdaq futures – we are on stand buy until either is broken and holds. A new low and continuation will likely bring about full resolution of the rising wedge pattern, which would result in a retest of July’s lows.
Trade Setups that Do Not Trigger
Our method of swing trade setup selection and entry techniques generally means that our entry triggers for long-side trade setups will not get hit on a day like today. Waiting patiently for price to prove itself is a hallmark of our method.
What should be done with trade setups that do not trigger? Review each one to see if the basic pattern/premise is still valid. For example, if the setup is a bull flag and is not triggered that day, it can remain on our list as a valid trade setup provided price hasn’t invalidated the requirements for a bull flag i.e. volume is generally declining on the retracement, and the retracement is between 2 and 6 days old but no longer.
Today's transcript.
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Today's transcript.
Click on the title above to expand this document.
Tuesday August 3 closing data.
Click on the title above to expand this document.