Tuesday, August 23, 2005
Issue Contents:
| 09:07 | The Day Ahead Economic releases and news |
| 09:49 | Swing Trade Setups Featured charts for Tuesday August 23 |
| 16:15 | TrendVue Trader Talk Today's transcript. |
| 16:53 | Crude Realities Catching up on Crude |
| 19:30 | Swing Scanner Results Tuesday August 23 closing data |
| 19:32 | Market Statistics For Tuesday August 23, 2005 |
Good moring, today is Tuesday August 23rd, the 235th day of 2005.
Another fairly light day by way of economic news ahead. This morning we learned that chain store sales fell on a month to month basis for the third week in a row, although year over year growth is only softening from 4.4% to 4.0%.
“According to special consumer gasoline-price-impact survey, which was conducted by the Opinion Research Corporation during the period of August 18–21, 2005, found that 58 percent of households are now reducing their discretionary spending on items such as clothing, shoes, jewelry, consumer electronics, at restaurants, on spa and beauty services or on other non-essential purchases, said Michael Niemira, ICSC’s chief economist and director of research.
Crude is trading up more than 1/2 percent; natural gas is up a further 3.51% before the open, and appears to have set a new contract high. Watch gold and the US dollar closely over the next couple of days as both are poised to make a move, direction TBD – more on this later.
Schedule: after spending a late night cleaning up and patching missed data while away it looks like tomorrow we’ll be back to full speed here at Trendvue.
US Market Calendar
- 7:45 am: ICSC-UBS Store Sales1
- 8:55 am: Redbook – Aug. 20th week
- 10:00 am: Existing Home Sales – July
- 10:00 am: State Street Investor Confidence Index
Canadian Market Calendar
- 8:30 am: Leading Indicators – July
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 US chain store sales fall in the latest week-ICSC
Featured setups from Monday August 22, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups
Notes for the Day
- still recovering from my satellite data outage but getting back to normal here – should be back on a regular schedule for tomorrow
- direction appears to be ultimately about oil, and we’ll look at that in more detail as the day goes on.
ETFS
QQQQ – long – if a reversal here near 39 forms intraday, QQQQ will probably be one of the better performers. There’s no decent setup to exploit on the daily chart although yesterday’s poke below the range gives rise to the potential for a reaction reversal fueled by yesterday’s sellers IF price manages to gain some traction. The Russell 2000 ETF IWM would be another choice for a rally.
DIA – short – the short side is easier to envision; but be aware that yesterday’s selling may end up providing short covering fuel for a move up.
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
NEM – gold – we need to see the US Dollar start to head down into the 87 level before gold will really pick up a head of steam; I would stalk decent intraday opportunities in the gold sector ahead of this – sometimes we get to keep such positions before a larger move sets up, but do not extend much risk. If stopped out later in the day at break even, such is life. NEM, ABX, IMG:C given as examples, lets check out the entire sector.
ABX
IMG:C (IAG:AMEX) – Gold
NE – drillers
JNJ – drugs / consumer non discretionary
HD – home improvement – HD appears to be on its last legs here – must hold these levels and head up.
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
EOP – properties – stalk short one day only here, hold only if price clears 2 day low and closes weak.
Today's transcript.
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Catching up on last week’s oil inventory data ahead of tomorrow’s update:
CL – October Contract – support levels keep building higher, with new long term support coming in near 58.There’s a long setup here – a single down bar within a still-intact upswing offers a potential lever for a move up in the commodity; a similar pattern exists in many oil index stock components making them natural targets for long trades tomorrow.
Demand
Weekly Product Demand, updated from last week’s EIA Petroleum Status Report for August 12th – note the big dip in jet fuel demand growth, although total product demand hit a new high for the year.
EIA Projections Against Actual – still running well ahead of projections for demand growth.
In this China Daily story (Official says oil sector well balanced), a graphic depiction of demand:
History
And to wrap things up for today, check out this annotated chart of the Dow 30 from the 70’s for a historical view of what can happen to markets and economies when there is insufficuent oil to meet demand. Impact? 30+% decline in the Dow. Back then, it was political action that shut the taps off; today the primary concern has been whether producers can keep up with demand growth.
Of course, with folks like television evangelist Pat Robertson spouting off, we are reminded that oil is the most political of commodities…
Tuesday August 23 closing data
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Statistics for Tuesday August 23, 2005
Our custom symbol universe of the most heavily traded or liquid US stocks is used as the base for analysis.
| Symbols in Up Swings | 331 |
|---|---|
| Symbols in Down Swings | 350 |
| Up/Down Swing Ratio | 0.94 : 1 |
| Advancers | 36% |
| Decliners | 61% |
| Unchanged | 2% |
| Up Bars | 26% |
| Down Bars | 43% |
| Inside Bars | 18% |
| Outside Bars | 6% |
| Close > 20EMA | 36% |
| Close > 50SMA | 51% |
| Close > 200SMA | 64% |
| 20EMA > 50SMA > 200SMA (trend up) | 37% |
| 20EMA < 50SMA < 200SMA (trend down) | 22% |