Friday, January 14, 2005
Issue Contents:
| 08:57 | The Day Ahead Economic releases and news. |
| 09:13 | Before the Bell Quick look at indexes. |
| 09:29 | Swing Trade Setups Featured charts for Friday January 14th. |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning- its Friday January 14th and the day before a three day weekend for US market participants. US Markets are closed Monday in observance of the Martin Luther King day holiday—in advance, bond markets will close early today,
Producer prices came in with a larger than expected drop in the headline number of 0,7 percent1, but in my mind if one strips out food and energy when looking for bad news, one should also do th esame when looking at possible good news:
The December producer price index was down 0.7 percent from a 0.5 percent increase in November. Analysts on average had been looking for December PPI to drop 0.1 percent. With food and energy costs stripped out, the December index rose 0.1 percent from an increase of 0.2 percent in November. Analysts on average had been looking for an increase, ex-food and energy, of 0.2 percent.
So we’ve learned that a precipitous drop in oil prices reduced food and energy costs in December – this seems like news the market would know intuitively without the benefit of statistics. Given crude has managed to hold the recent major swing lows and appreciate significantly again, traders may discount how long this “good” news may last.
Nevertheless, pre-open, stock index futures have priced in a small gain for the open, at an opportune time as markets again retest last week’s lows. Lets see if buyers are willing to step up to the plate.
US Market Calendar
- 8:30 am: Producer Price Index – Dec.1
- 8:30 am: Business Inventories – Nov.2
- 9:15 am: Industrial Production – Dec.
- 9:15 am: Capacity Utilization – Dec.
- 10:30 am: Weekly Leading Index for the week ended Jan. 7
Canadian Market Calendar
- 8:30 am: New Motor Vehicle Sales – Nov.
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 Treasuries supported by lower than expected PPI
2 U.S. Nov. Business Inventories Rise 1%; Sales Rise 0.4%
Markets are at an important juncture here, as price retested the important recent low on the Dow 30 (YM) and came “close enough” in Nasdaq and S&P 500 markets that we have to consider the potential for a double bottom here.
There is a big “IF” implied in in this – IF prices hold the low, then we’ll want to put some capital to work on the long side – so for now, until proven otherwise by a break down below the recent lows, we’ll have to be prepared for at least an intermediate term bottom. It goes without saying that we also will not be surprised if price heads lower.
Featured setups from Thursday January 13, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups
Notes for the Day
Given the potential for an attempt at a bottom, which is probably 50/50 odds of passing or failing, first up lets look at ETF long strategies. After the open, we shall look to see where strength is – if any – a number of individual stock setups will be published. Please check TrendVue Trader Talk through the first hour.
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.
Common strategy: ordinarily at a test of bottom what we are looking for is price to push above the prior day’s high. In this case, that will be only after a substantial gain from yesterday’s close, and its possible by that point price may be stretched to the point of not being able to close much higher and give us the first-day protection of profit we prefer.
DIA
DIA – 78 minute chart
SPY
SPY – 78 minute chart
QQQQ
QQQQ – 78 minute chart
Therefore, using a large time frame intraday chart, such as 20 or 78 minutes, we should look for key resistance, and look to buy these names only if price pushes above resistance (marked) and then *only if price offers a minor retracement above which to locate our buy stop orders.
We shall talk about this more in Trader Talk today if this all pans out…
Today's transcript.
Click on the title above to expand this document.