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Monday, January 3, 2005
Issue Contents:

09:05	The Day Ahead Economic releases and news.
09:08	Swing Scanner Results Friday December 31st closing data.
09:11	Market Statistics For Friday Wednesday December 31st
09:13	Swing Trade Setups Featured charts for Monday January 3rd.
09:17	Notes for the Day
11:00	Intraday Update Quick take on Dow, Nasdaq 100 and S&P 500
16:15	TrendVue Trader Talk Today's transcript.
17:59	Swing Scanner Results Monday January 3rd closing data.
18:00	Market Statistics For Monday January 3rd.

The Day Ahead

Good morning – its January 3^rd and the first trading day of the new year in the US; Canada remains on holiday until tomorrow. Pre-market, stock index futures are up, no doubt reflecting optimism as crude futures are down over a dollar, and the usual relief that nothing bad happened on New Years Eve.

US Market Calendar

• 10:00 am: ISM Index – Dec.
• 10:00 am: Construction Spending – Nov.
• 12:00 pm: Richmond Federal Reserve Bank President Jeffrey Lacker speaks to the North Carolina Bankers Association
• Auto Sales – Dec.
• 3 & 6-month T-bill auction

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.

^ 05.01.03 09:05 #

 

Swing Scanner Results

Friday December 31st closing data.
Click on the title above to expand this document.

^ 05.01.03 09:08 #

Market Statistics

Statistics for Friday December 31, 2004

Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.

Symbols in Up Swings	521
Symbols in Down Swings	245
Up/Down Swing Ratio	2.12 : 1
Close > 20EMA	43%
Close > 50SMA	82%
Close > 200SMA	75%
20EMA > 50SMA > 200SMA (trend up)	57%
20EMA < 50SMA < 200SMA (trend down)	7%

^ 05.01.03 09:11 #

 

Swing Trade Setups

Featured setups from Friday December 31, 2004 closing data symbol scan

Jump to: Long Setups | Special Situations

Entry and Exit Strategies

Entries: Each chart posted includes the TrendVue High/Low indicator in the chart legend, showing the high and low of the prior day. We refer to these values frequently for setting stops, alerts and initial protective stops.

Our trade entry methodology stresses that price should prove to us where it wants to go, consequently all of our setups involve placing entry stop/stop limit orders where a trade will be initiated for us automatically, if price is able to move in the expected direction.

When price does not comply, we evaluate the setup to determine if it is either a) an expanding pattern or b) an invalidated setup. For example, a 3 bar bull flag setup that does not trigger can be followed up the next day with a buy stop above the new 4th bar, provided that price doesn’t invalidate the bull flag pattern.

Exits: Once in a trade, we must place an initial protective stop as soon as possible. Consider this stop your crash stop – an emergency measure which you hope will never get used, but is there for your protection in case you lose all connectivity to your broker or some other unforseen event takes place. The initial protective stop, unless noted otherwise, is always at the opposite end of the bar used to trigger a trade.

For example, if our trade setup for a long trade is based upon a break of yesterday’s high, we will use yesterday’s low as our initial protective stop.

The next task for us, once in a trade, is to find the earliest reasonable opportunity to move stops up. Trade and risk management is a highly personal topic; we can only relate to what works for us. In general, once a trade is substantially profitable, or has started to trend on a 10 or 20 minute chart intraday, I move to a break-even stop immediately.

Once the trade has surivied its first day, we are already on watch to look for our profit exit. Here your personal objectives come into play. A longer-term investor using swing trading techniques to improve entry and exit will tend to give a trade some room. Our recommendation is to use the break even stop until the stock starts to trend (higher highs, higher lows or the reverse in a down trend).

Short term swing traders will tend to use price extension estimates and pre-place exit orders at these estimates. This discussion goes beyond the scope of our daily swing trade service, however we are happy to entertain questions in TrendVue Trader Talk on any subject.

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

SGP – drugs

QQQQ – Nasdaq 100 ETF – still lagging the other major indexes, caution.

DIA likely to hit the trigger early in the am due to pre-market futures moving higher on WMT news. Let it trigger and buy after the first retracement and hold only if closes strong.

Test of Top – Continuation

MAS – homebuilder / supplies

Special Situations

JDSU – long – special in that breakouts like this need to be treated with care.

^ 05.01.03 09:13 #

 

Notes for the Day

Following the very low volume which always is a feature of the Christmas to New Years trading period, its common and perhaps inevitable to see traders push stocks and markets out of their range early in the new year.

Quite a few stocks have been moving sideways for a week or more and this week we’ll see if buyers are ready to step up to the plate for another leg up. While most opportunity will be on the long side initially, immediately following any “break out” we have to be on our highest alert for price failure. That’s job one for swing traders this week.

^ 05.01.03 09:17 #

 

Intraday Update

Well we got this one right:

While most opportunity will be on the long side initially, immediately following any “break out” we have to be on our highest alert for price failure. That’s job one for swing traders this week. (Notes for the Day)

Lets look at the big picture intraday charts as they give us the clearest view of what is happening here.

Nasdaq – the exchange itself started out very positive this moring with advancers and advancing volume solidly favouring up as a direction, however the picture weakened quickly in the early going. Result: failed retest of the range high, the third such failure, and a massive reversal. While price remains in this range we have to keep our cool – its not dead yet, as the famous line from Monty Python goes, but no doubt the selling is unnerving some market participants.

S&P 500 – index futures pulled back to the range high below – and so far have found support. Its critical that this support holds. If not, taking profits on weaker names in our holdings is advisable, and every long holding should be evaluated on a case by case basis.

News from Walmart WMT helped push the Dow initially higher – and here again price has failed to penetrate and hold the recent range high.

We currently have a YM (Dow 30 futures) short on and have taken profits on part of the position.

Those who were looking for an immediate continuation of the generally positive price action did not get their Happy New Year gift this morning; yet they may still – while the broader S&P 500 holds support, all is not lost. Lets stay sharp here…

^ 05.01.03 11:00 #

 

TrendVue Trader Talk

Today's transcript.
Click on the title above to expand this document.

^ 05.01.03 16:15 #

Swing Scanner Results

TrendVue Symbol Scanner Output

The TrendVue stock scanner looks for patterns and events occuring across a symbol universe of more than six hundred stocks. Information on the scan criteria and meaning of the current scan output can be found in this help document.

Note: The latest output from the symbol scanner, in a text format suitable for cutting and pasting into various charting applciations, is always available at http://www.trendvue.com/latestscan.

^ 05.01.03 17:59 #

 

Market Statistics

Statistics for Monday January 3, 2005

Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.

Symbols in Up Swings	316
Symbols in Down Swings	450
Up/Down Swing Ratio	0.70 : 1
Advancers	16%
Decliners	82%
Unchanged	2%
Close > 20EMA	16%
Close > 50SMA	71%
Close > 200SMA	72%
20EMA > 50SMA > 200SMA (trend up)	56%
20EMA < 50SMA < 200SMA (trend down)	7%

^ 05.01.03 18:00 #

 

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