Thursday, November 10, 2005
Issue Contents:
| 09:07 | The Day Ahead Economic releases and news |
| 09:29 | At the bell Patterns and key levels |
| 09:45 | Swing Trade Setups Featured charts for Thursday November 10 |
Good morning, today is Thursday November 10th, the 314th day of 2005.
Stock index futures have moved on both sides of the fence (currently pointing higher) since this morning’s record trade deficit numbers were reported.1 The $66.1 billion dollar deficit likely hit a short term high on the back of Hurricane Katrina induced oil imports, so the headline number may be ignored for today, although at this point the trend remains up for this market measure.
Overseas, the Bank of England held rates steady for the third month in a row. There, unlike in North America, the pressure is to reduce rates further.
Market Statistics for Wednesday November 9, 2005
| Symbols in Up Swings | 330 |
|---|---|
| Symbols in Down Swings | 343 |
| Up/Down Swing Ratio | 0.96 : 1 |
| Up Bars | 40% |
| Down Bars | 32% |
| Inside Bars | 11% |
| Outside Bars | 13% |
| Close > 20EMA | 56% |
| Close > 50SMA | 55% |
| Close > 200SMA | 59% |
| 20EMA > 50SMA > 200SMA (trend up) | 34% |
| 20EMA < 50SMA < 200SMA (trend down) | 23% |
US Market Calendar
- 7:00 am Bank of England Rate Policy Announcement
- 8:30 am: Goods & Services Trade Balance – Sep.
- 8:30 am: Initial Claims – Nov. 5th week
- 8:30 am: Trade Price Indices – Oct.
- 9:45 am: University of Michigan Consumer Sentiment Index – Nov. Preliminary
- 2:00 pm: Treasury Budget – Oct.
Canadian Market Calendar
- 8:30 am: Merchandise Trade Balance – Sep.
- 8:30 am: New Housing Price Index – Sep.
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 U.S. Trade Deficit Widens to Record $66.1 Billion as Imports of Oil Surge
Since October 27 the market has been trending higher – higher swing highs and higher swing lows are the raw definition of an up-trend.
Range contraction over the past few days is indicative of a major test being played out – round one was won by sellers yesterday as price failed to clear key resistance near 10540 and pulled back, leaving potential failed bull flag trigger short setups on the daily charts of major indexes:
Major market indexes – daily
Selling the bull flag trigger failure requires that price break yesterday’s low; then stalk a retracement (bounce) underwhich to sell. Remember – any shorting here is counter trend, and, at this point, is more likely to stall than continue.
There is however a fair gap between current price and the next lower levels of key support (on the daily chart), so if price looks to be weak, I certainly would take on a short here, keeping it only while price is moving down with speed.
YM – 135M
Key levels, YM Dow 30 Futures:
- support lives at 10560, 10530 and 10500 – if price breaks all of these support levels a retracement to the 50% fib line will become more likely than not;
- near term resistance is 10575 – out of the open we should be stalking any minor retracement with a buy above, holding only if price moves up with gusto. Otherwise, wait for a setup > 10575 or at yesterday’s low for a retest.
Tomorrow will be a low-volume mushy sort of day, with many retail participants having the day off. Scaling back activity is the thing to do; supplementing exposure with index ETF’s traded intraday if the market picks up substantially.
NSM – semi, keeping with the tech theme
CTSH – consulting
ALTR
KO – may actually have finally bottomed out last month – there’s a tiny harami setup here – buy on break of yesterday’s high (or suitable retracement thereafter), hold only if price makes a good attempt at trying to clear the two day high.