Thursday, September 16, 2004
Issue Contents:
| 09:08 | The Day Ahead Economic releases and news. |
| 09:29 | Swing Trade Setups Featured charts from Wednesday's swing scan. |
| 12:15 | Intraday Market Update Balance point reached. |
| 12:21 | Philly Fed Index Release |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:24 | Stock Scanner Results Thursday September 18 swing scanner data - TrendVue Swing Ratio: 1.10 : 1 |
Good morning. Ivan seems like it could have been worse, both from a human toll and from an investment perspective. Oil production facilities appear to be unscathed although news is still coming in on this front.
Relatively benign economic1 news2 hasn’t moved overnight futures markets much, so we’ll be watching the open and first hour for direction. The Philly Fed Index, due out at noon, is another closely watched release.
Today and tomorrow we shall begin the process of ranking sectors, with a goal of identifying those with the best medium term prospects. While we are at it we’ll also find those with the worst prospects too.
Reminder: This is options expiry week.
US Market Calendar
- 8:30 am: Consumer Price Index1
- 8:30 am: Jobless Claims2
- 9:00 am: Treasury International Capital
- 11:00 am: 6-Month, 3-Month Bill Announcement
- 12:00 pm: Philadelphia Fed Survey
- 4:30 pm: Money Supply
Canadian Market Calendar
- 8:30 am: International Securities Transactions – July
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 U.S. Consumer Prices Rise 0.1% in August; Core Index Up 0.1%
2 Jobless claims rise by 16,000
Featured setups from Wednesday’s closing data symbol scan
Jump to: Long Setups | Special Situations
Notes for the Day
As mentioned a few times Wednesday, odds are at least more likely than not that the market pulls back more than a single day from recent highs and we should use this time to identify new long candidates for exploitation in the next day or two.
We’ll look for some candidates for today that might surprise and push up straight away, but also will not be surprised nor disappointed if few or none of them trigger today. Sometimes doing nothing is the best plan of all.
We should also be aware that its earnings-warning time again. Taking profits when stocks hit their identified targets, in the process reducing our time in the market, helps to reduce risk through limiting exposure.
Long Setups
General common strategy: Unless noted otherwise, buy stop just above the “high” value, with an initial protective stop at the low value of the bar, not below the bar.
Retracement or Pause in Up Swing / Up Trend
Test of Top – Continuation
PPH – Pharma industry ETF, single down bar at a test of a recent important swing high. Buy stop 76.63, protective stop if filled 76.07.
Special Situations
ATML – Long (for today) – placed in special situations as we can see a rising wedge forming here, while the dominant trend remains down – classic interpretation suggests that the wedge will resolve downwards. However, as you will frequently witness me saying, all wedges, triangles, etc are pauses and moments of indecision therefore “classic” rules don’t always apply. We can often exploit surprise moves that go counter to classic interpretation, which frequently deliver good opportunities because so few expect the outcome. Buy stop 3.98, if triggered, hold only if price easily clears the upper trendline and holds above.
AW – Long – Aggressive, intraday-capable traders only. Triggers set at 9.44 above the “bull harami” (not a very bullish chart!), look for a retracement to exploit on the long side. Suggest taking profits intraday unless you are well in the money by the close.
From this mornings Trading Notes for Strategies for Success Swing Trade Subscribers:
As mentioned a few times Wednesday, odds are at least more likely than not that the market pulls back more than a single day from recent highs and we should use this time to identify new long candidates for exploitation in the next day or two.
We’ll look for some candidates for today that might surprise and push up straight away, but also will not be surprised nor disappointed if few or none of them trigger today. Sometimes doing nothing is the best plan of all.
Market internals so far today have been generally constructive, with buying support evident through the session. Individual stocks have benefitted far more than the indexes themselves, suggesting that breadth is not expanding – we’ll have a better view of this in the end of day statistics. In the meantime, new longs need to be protected with tigher stops than we’d ordinarily deploy on the “day of” trade.
We can see that price and the 20/50 period moving averages in the 15M time frame have all come together – this is a decision point within the current embroyonic pull back in markets, where traders are asking the simple question “does this market have enough steam to power straight up, or should we take some profits and rebuy in the days to come?”
Stay tuned for the answer.
The Philly Fed index took a sharp drop from August to September, causing a sharp push upwards in the bond market which follows these things closely.
The diffusion index of current activity, which measures firms’ overall appraisal of current economic conditions, decreased from a reading of 28.5 in August to 13.4 in September. The index has remained positive for 16 consecutive months but is now at its lowest reading since July 2003. Philadelphia Federal Reserve Business Outlook Survey – September 2004
Since the Philly index is considered a good preview for national data to be released in the days to come, it occasionally moves markets. Lets see where price heads to once the full report has been digested. Regardless of intraday wiggles, it seems clear that this market remains concerned about the state of the economy.
Today's transcript.
Click on the title above to expand this document.
Thursday September 18 swing scanner data - TrendVue Swing Ratio: 1.10 : 1
Click on the title above to expand this document.