Wednesday, September 8, 2004
Issue Contents:
| 09:04 | The Day Ahead Economic releases and news. |
| 09:29 | Swing Trade Setups Featured charts from Tuesday's scan. |
| 11:30 | Quick Take: Gold Update on the deaded yellow metal. |
| 13:32 | Quick Take: Nasdaq Composite A look at COMPX |
| 14:57 | Goodbye Frances Hello Ivan |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:33 | Stock Scanner Results For Wednesday September 8 |
Good morning! We have a busy day of economic news releases and events ahead, including Federal Reserve Chairman Alan Greenspan’s testimony before the House Committee on the Budget, the release of the Reserve’s “Beige Book” (commentary on economic conditions around the country), and the release of the last FOMC meeting minutes.
Oil may also compete with Mr. Greenspan for trader’s attention – past Petroleum Institute Reports have caused the market to take a step back.
US Market Calendar
- 7:00 am: Mortgage Bankers Association Purchase Applications1
- 7:45 ICSC-UBS Weekly Chain Store Store Sales Snapshot2
- 8:55 am: Redbook Retail Sales Index
- 10:30 am: Weekly Petroleum Institute Inventories Report
- 10:30 am: Federal Reserve Chairman Alan Greenspan testifies before the House Committee on the Budget, presenting the Board’s Economic Outlook.
- 11:30 am: 4-Week Bill Auction
- 1:00 pm: 5-Year Note Auction
- 2:00 pm: Beige Book, the Federal Reserve’s anecdotal report on economic conditions around the country.
- 3:00 pm: Consumer Credit
Canadian Market Calendar
- Band of Canada Interest Rate Policy Announcement
- 8:30 am: Field Crop Report
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 Mortgage Applications at 4-Month High
2 Francis, Late Holiday Hit Chain Sales
Featured setups from Tuesday’s closing data symbol scan
Jump to: Long Setups
Notes for the Day
Quite a few names from the oil sector crept into today’s featured chart picks, seemingly counterintuitive given recent price action in oil. If these names do not trigger today, we should carry them forward on our watch lists for the next day or two before discarding.
Its very likely that trade will remain muted ahead of the release of Greenspan’s pre-written testimoney.
Please tune into TrendVue Trader Talk for more (non-oil) trade setups which will be published over the next 30 minutes.
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.
Test of Top – Continuation
APA – “cup and handle” formation, with a 2 bar bull-flag here. Buy stop 46.25, initial protective stop if filled 45.49. Note price had recently gapped – this can be an indication of price exhaustion or extreme strength – if stopped in, demand that price move up sharply, ideally closing above the recent swing high (46.49)
Retracement or Pause in Up Swing / Up Trend
XTO – similar chart formation as APA, perhaps not quite as strong. Follow the same game plan.
RDC – many of the oil services stocks have had a strong run through August. Currently on bar 2 of a bull flag – like APA we can take one stab at trying to capture direct continutation upwards however do not linger if price does not move up sharply in your favour. It would not be a surprise to see RDC, indeed, all of these names, pull back a little more before attempting to move higher.
I’ve included the weekly chart for RDC to show the 2 year consolidation zone this stock trades within. If this range is broken to the upside, there is 10$ or more in potential price appreciation stored up. Note that we do not take additional or unreasonable risk simply because a potential target is out there – we see the consolidation for what it is – one huge period of indecision, which could break either way.
ECA:NYSE / ECA:TSX – bull flag, a retracement within an upswing still in progress. Buy stop 42.00, initial protective stop of filled 41.56 per the common strategy noted above.
TLM also trades on both NYSE and TSX. While we normally try to avoid trading within a well defined range, what is appealing about the retracement present here is that the up-swing is still unbroken, indicating some strength. We are looking to capitalize on same, and since that is part of our trade premise, we must resolve to sell if, after being stopped in, no strength is demonstrated. Buy stop 23.17.
Its been a while since we last discussed Gold. With price pulling back to the rising trendline off the _weekly_ chart, and a key support/resistance level close by, its time to wake up again:
Gold bulls will take heart from the set of higher swing highs and lows in place on the weekly chart, but they are growing concerned as a new down trend has started on the daily charts.
Gold bears have noticed price stalling at former resistance, are looking for a break of the rising weekly trend, and for price to start trading below 393.
Risks to either side are about in balance here, so its prudent to simply stand aside for a bit longer and see which side emerges the victor.
So far, two up swings have failed to penetrate overhead resistance. A weak close today will bring sellers out in the morning. Since price reached all our targets laid out when we went long in August, this pause isn’t a huge surprise.
New QQQ longs (mentioned in Trader Talk) done solely off the daily chart should consider holding only if price strengthens intraday.
Intraday traders are flat in QQQ, waiting for this ever-larger consolidation pattern to play out. Aside from a short (closed at profit) and long scalp (still in progress) in futures, I’ve been mostly biding my time, waiting for something more dramatic before committing more capital in either direction.
Hello Ivan, already a killer:
Hurricane Ivan Devastates Grenada
Ivan’s 140 mph (225 kph) winds prompted storm alerts for the Dutch islands of Aruba, Bonair and Curacao, the north coast of Venezuela and Colombia’s Guajira peninsula and parts of Haiti and the Dominican Republic.The storm killed at least three people and devastated the capital, St George’s, destroying the island’s emergency operations center and the home of Prime Minister Dr. Keith Mitchell, the Caribbean Disaster Emergency Response Agency said.
The storm track is far from predictable at this point.
“It’s still very early, and we don’t want to give a false sense of fear. Some of the models have it going to Florida, some have it passing to the east of Florida, some to the west in the Gulf of Mexico. For now, the people in Florida need to take warning and maybe not take down the shutters until we know where it’s going exactly.” Bloomberg
Today's transcript.
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For Wednesday September 8
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