Wednesday, March 2, 2005
Issue Contents:
| 09:03 | Swing Scanner Results Tuesday March 1st closing data. |
| 09:04 | Market Statistics For Tuesday March 1, 2005 |
| 09:07 | Site Update |
| 09:22 | The Day Ahead Economic releases and news. |
| 09:29 | Swing Trade Setups Short and Sweet |
| 10:44 | Crude Realities |
| 11:10 | When the news seems bleak |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Tuesday March 1st closing data.
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Statistics for Tuesday March 1, 2005
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 535 |
|---|---|
| Symbols in Down Swings | 229 |
| Up/Down Swing Ratio | 2.33 : 1 |
| Up Bars | 45% |
| Down Bars | 23% |
| Inside Bars | 22% |
| Outside Bars | 5% |
| Close > 20EMA | 70% |
| Close > 50SMA | 56% |
| Close > 200SMA | 65% |
| 20EMA > 50SMA > 200SMA (trend up) | 40% |
| 20EMA < 50SMA < 200SMA (trend down) | 20% |
As I’m fighting off the makings of a bad chest cold here, I decided last night that rest rather than working all night was the right thing to do—I’ve no interest in going through another bought of pneumonia after what happened to me in December!
During the day today and Thursday I’ll be spending more time on project work so I don’t have to burn quite so much midnight oil. Next week, Murphy willing, I get to have just a “day job” again!
Good morning, on this the 61st day of 2005. Pre-market futures are off, trading deep in the low end of yesterday’s relatively narrow range as traders come to grips with a day offering Fed Chairman Alan Greenspan, a potential upside surprise for oil, and profit warnings from a number of tech-oriented1 and S&P 5002 companies.
Its not over ‘till its over – we’ll just have to see if the mood is as sour by day’s end, but in the meantime our sense that all was not right yesterday in TrendVue Trader Talk may be spot on yet.
US Market Calendar
- 7:00 am: MBA Purchase Applications
- 10:00 am: Challenger Layoff Report – Feb.
- 10:00 am: Fed Chairman Greenspan testifies to the House Budget Committee
- 10:30 am: EIA Weekly Petroleum Status Report
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.
1 Warnings to Weigh on Techs at Opening
2 Profit warnings seen undermining Street
Quckly today, ETF’s only:
SPY – S&P 500 is at a test of top and we can always go both directions at such times. IF price pulls below yesterday’s low, we want to find a minor bounce to position a short below and get short and stay short ONLY if price moves solidly in our favour.
Tests are not always quick affairs – don’t be too surprised if what first starts out today as weakness reverses, grows strong, stays strong or reverses again by days and to weakness. The key at a potential test of top is to monitor closely…
DIA
QQQQ – Nasdaq has long been the weakest – ironically its trading higher than yesterday’s low but not on a percentage basis than ES.
I won’t be taking profits in my other holdings unless it becomes clear that a change of trend from up to down is underway and you can be sure we’ll publish a note on the web site if that is the case.
This week’s EIA Petroleum Status Report summary:
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 2.4 million barrels from the previous week. At 299.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 1.0 million barrels last week, and are above the average range. Distillate fuel inventories fell by 1.8 million barrels last week, and are slightly above the lower end of the average range for this time of year. The decline in distillate fuel inventories was equally split between high-sulfur distillate fuel (heating oil) and low-sulfur distillate fuel (diesel fuel). Total commercial petroleum inventories inched up by 0.4 million barrels last week, and remain in the upper half of the average range.
Total product supplied over the last four-week period has averaged nearly 20.9 million barrels per day, or 1.6 percent more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged nearly 8.9 million barrels per day, or 1.5 percent above the same period last year, while distillate fuel demand has averaged nearly 4.3 million barrels per day, or 0.6 percent below the same period last year. Kerosene-type jet fuel demand is up 1.2 percent over the last four weeks compared to the same four-week period last year.
Each weekly report continues to show that demand is ahead of last years, which was ahead of the year prior. Industry has over the winter shown that it is able to rebuild stocks of raw crude, yet there appears to be some concern about the tightness of supply.
Unless 52 fails and holds as resistance, it will become new support until proven otherwise. While this remains true we can imagine that stock markets will find this a greasy, bitter pill to swallow.
All time high for this contract is dead ahead.
Intial reaction was up; lets see if that holds by days end.
One of the most important things a trader or investor needs to do is develop their own sense about price movement, one that is independent of other inputs, especially news.
I hit the sack a little early last night, and woke up a little late, immediately noting that the futures were down significantly from yesterday’s high and close. Not seeing any particular news to justify a big negative reaction my first thought was that the decline was overdone and due for a “surprise” up move. That’s just raw instinct based on thousands of trades and experience over the years. What really matters to me is price and price and nothing but price.
Let me explain with an exceprt from this mornings Trader Talk transcript, just under 1 hour ago:
10:08:37 Mike: Here’s why I’m still interested in the long side at all – the S&P 500 is trading just under what is very clearly the line in the sand between holding support and turning this line into new resistance (which it currently is) IF price is to regain that level and turn it back into new support, I want to have an outsized position in either futures or ETFs and at as low a price as possible such that, ideally, the position can be held in relative safety at a b/e stop for the balance of the day.
10:09:49 Mike: Nasdaq, while down more on a percent basis, remains ABOVE that same line already.
10:10:07 Mike: % matters, but the horizontal level where folks have stops matters more.
10:10:31 Mike: For example, I have longs below that line that I do not yet feel are threatened.
Later this morning:
10:52:22 Mike: 1524.50 buy stop limit NQ.
And the result:
Price matters most, and what matters most are simple, nearby, horizontal levels of support or resistance.
It takes only a little experience and some basic rules to start to develop a sense for which levels are important and which are not. I continually endeavour to explain how I come about identifying key levels and patterns, sometimes in more detail than anyone would naturally prefer I am sure! The key to remember is that any bias we may develop to direction must be primarily developed with a heavy weight on the input price gives us.
And far less weight on the news of the morning…
Today's transcript.
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