Wednesday, February 16, 2005
Issue Contents:
| 08:35 | The Day Ahead Economic releases and news. |
| 08:37 | Swing Scanner Results Tuesday February 15th closing data |
| 08:42 | Market Statistics For Tuesday February 15, 2005 |
| 09:16 | News-Driven |
| 09:28 | Swing Trade Setups Featured charts for Wednesday February 15th. |
| 13:30 | Chop Till They Drop |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning, on this the 47th day of 2005. Geopolitical concerns are reasserting themselves on trader’s psyche’s this morning as rumours of a missile blast near a power plant within Iran circulate, driving pre-market futures down (30 points on YM) initially although markets have made up most of the lost ground since.
- Unknown aircraft said to fire missile in Iran—State TV: Powerful explosion in area with power plant
- Iran: US flying nuke spy drones
- Syria and Iran say to build common front
Crude futures spiked somewhat immediately following the initial news report, but what’s more interesting is the long term crude chart:
Whether events are as initially reported or not, the recent assassination in Lebanon and the building tension between other nations and Syria and Iran is bound to weigh in on markets now or in the days to come.
In other news, Housing Starts hit a 21 year high in January1, and consistently high permit activity combined with weather related delays in some regions suggest next month will also report brisk activity.
Fed Chairman Alan Greenspan will appear before the Senate Banking committee today and tomorrow, delivering the semi-annual Federal Reserve report on monetary policy. US Dollar (and Gold) watchers will be particularly interested in what Mr. Greenspan has to say.
US Dollar Index – the pull back of the past week is getting closer and closer to reversing the up trend on the daily chart which started following a retest of bottom early in the new year.
US Market Calendar
- 8:30 am: Housing Starts – Jan.
- 8:30 am: Building Permits – Jan.
- 9:15 am: Industrial Production – Jan.
- 9:15 am: Capacity Utilization – Jan.
- 10:00 am : Federal Reserve Chairman Alan Greenspan to give semiannual monetary policy testimony to the Senate Banking Committee
- 10:00 am: Treasury Secretary John Snow to speak about tax reform
- 10:30 am: EIA Weekly Petroleum Status Report
Canadian Market Calendar
- 5-year bond auction
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 Economic Report Housing starts rise to 21-year high
Tuesday February 15th closing data
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Statistics for Tuesday February 15, 2005
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 543 |
|---|---|
| Symbols in Down Swings | 222 |
| Up/Down Swing Ratio | 2.44 : 1 |
| Up Bars | 47% |
| Down Bars | 27% |
| Inside Bars | 11% |
| Outside Bars | 10% |
| Close > 20EMA | 56% |
| Close > 50SMA | 55% |
| Close > 200SMA | 66% |
| 20EMA > 50SMA > 200SMA (trend up) | 41% |
| 20EMA < 50SMA < 200SMA (trend down) | 19% |
Unsurprisingly, as more reports come in from Iran, the picture changes again.
According to reports this past minute, Russian observers on the ground in Iran report no explosion near Iranian nuclear facilities (they are building it, so they ought to know) and there are apparently reports a fuel tank may have dropped from an Iranian war plane.
Chances remain high that Mr. Greenspan’s testimony will mean more today than events overseas. Yet we can derive something useful from the market’s reaction to speculation and sketchy news – this should at least serve as a caution to us going forward.
Featured setups from Tuesday February 15, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
In the newsletter we will look at “exit” strategies in a little more detail, just in case we need them for long positions started over the past few days and weeks.
I also have a few more stock ideas for the long side but lets see what happens as the market fully digests the morning news.
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
CIEN, still on my list.
NEM – you may find a single day pause in other golds as well.
Short Setups
General common strategy: Unless noted otherwise, place a sell alert at or just below the low of the setup bar, and look for the first failed intraday bounce after the low has been broken. What we are looking for is price to push down, bounce a little, and fail again – this is where we want to get short.
Retracement or Pause in Down Swing / Down Trend
MOT has a similar setup (bear flag rising to resistance) on the weekly chart as well.
Special Situations
SUNW, one of the beaten up – leaves a little harami candle to locate a long above.
While others are trading within the persistent chop today I’m working on a number of other projects and looking at the big picture.
Lets look at Crude: while the inventory report showed a mixed picture, what seems to be consistent week to week is that demand continues to grow year over year.
CL – intraday, continues to act like 47.50 – the 50% retracement of the retreat from last years record highs – may be new support. Recall that over the last few weeks price has confirmed 45$/bbl as new support, until proven otherwise:
CL – daily
I suspect more than anything this fact is supporting crude prices and we may yet see new highs in crude this year, partcularly during the peak summer utilization months and when the hurricane season again rolls around. Since many market analysts have based their equity forecasts for the broad market on lower oil, the continued strength in Crude may be one factor which holds markets back from substantial further advances. Something to keep an eye on.
And price has pushed to a new high today even as I write this… 48.55
Today's transcript.
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