Tuesday, September 13, 2005
Issue Contents:
| 09:12 | The Day Ahead Economic releases and news |
| 09:35 | Swing Trade Setups Featured charts for Tuesday September 13 |
| 10:23 | Quick Take: Dow Jones 30 Market direction |
| 10:58 | Crude Realities Direction and news |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning, today is Tuesday September 13th, the 256th day of 2005.
Chain store sales rose somewhat less than expected last week:
“Despite the needs of the displaced residents that lived in the path of Hurricane Katrina, which helped to lift sales for basic foods and other supplies in Texas and across the South, higher energy prices are seemingly weighing on demand for nonessential goods by middle and lower income households.” Michael Niemira, Chief economist and director of research, ICSC
The Producer Price Index delivered a tamer number for August than expected – ex energy and food, core inflation measures remained flat for the month.
``Energy prices were rising before Katrina hit, and while those costs didn’t make their way through to finished goods in August, we have to expect higher core inflation in coming months,’’ said Nigel Gault, director of U.S. research at Global Insight Inc., an economic research firm in Lexington, Massachusetts, before the report. ``Firms are saying that they’ve absorbed so much already that they have to pass on these costs.’’
Before markets open the US stock index futures are off marginally, having barely budged following this morning’s key economic reports. Crude oil and gasoline is up more than one half percent, and heating oil is up a full percentage point.
US Market Calendar
- 7:45 am: ICSC-UBS Store Sales
- 8:30 am: Goods & Services Trade Balance – July
- 8:30 am: Producer Price Index – August
- 8:55 am: Redbook – Sep. 10th week
- 2:00 pm: Treasury Budget – August
Canadian Market Calendar
- 8:30 am: Merchandise Trade Balance – July
- Manpower Survey – Q4
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 U.S. August Producer Prices Rise 0.6%; Core Prices Unchanged
Featured setups from Monday September 12, 2005 closing data symbol scan.
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- A long week of economic news = bumpy ride but also potential catalysts to either break above the recent market range, or, fail to and head lower.
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.
Test of Bottom – Reversal
Retracement or Pause in Up Swing / Up Trend
VTSS – semis
TQNT – semis
SMH – semi conductor ETF
SYMC – per MFE but not nearly as strong
XTO – energy
ECA – energy
ATI – specialty steels, probably will pull back 1 or 2 more bars and break that t/l before heading up. Keep on list.
PDG – gold – caution, gold is nearing historic highs (article to follow on this)
ABX – gold
Test of Top – Continuation
MFE – securty, software
PTEN energy services – test of top
DO – energy services
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.
Test of Top – Reversal
DIA – Dow 30 ETF, needs to be watched carefully
Retracement or Pause in Down Swing / Down Trend
HRB – tax prep and services
AGI – Gaming
Special Situations
A selection of potential bottoming charts for aggressive traders who know when to exit if the scenario doesn’t pan out:
INTC – potential long here but only if it can turn around VERY quickly.
EBAY – piercing line on news
AKAM
First, a slightly messy road map on the daily chart:
What do we know from this:
- Price has reached the summer highs, a time when optimism was also very high
- Price has stalled for two days
- In the bigger picture, price is trending, albeit in a very bumpy way, with higher major swing lows
On a large time frame intraday chart we see:
YM – Dow 30 futures
Where we can see:
- A failed test of top
- Price hovering at the big rising trendline
The recent Katrina-inspired rally (which is really all about oil unfortunately), if it stalls out here, is highly likely to shed price quickly and bring markets down to Katrina-time frame levels.
Today we are stalking opportunistic longs on the morning weakness but are also scalping shorts and trying to position sell orders in case the market breaks the early morning lows once more.
CLV5 – intraday
Crude, over the past two days, has made a tentative bottoming pattern and is trying to break out above a trendline of some significance. Quite often the first attempt at such obvious trendline breakouts fails, so long-side energy and energy-related traders are going to be a little nervous until price proves it can start setting higher swing highs and lows again.
CLV5 – daily
On the daily chart we see the price of crude is also at a very important level here, near where old resistance has, so far, held up as key support. It does have a lot of work to do before price can be considered to be trending up again, although the on-going uncertainty surrounding crude and natural gas may serve to at least hold prices in a range. The chart tells us we’ll want to be very careful in managing energy sector longs here… if support breaks down, the entire sector will be subject to a nasty round of profit taking (after which we’ll be there to hunt anew).
Speaking of uncertainty, yesterday’s Minerals Management Service Hurricane Katrina
Evacuation and Production Shut-in Statistics Report showed again that little further progress has been made in recovering lost production; last year, following Hurricane Ivan, once progress stalled, advances remained stalled for approximately a month. To date, following post-Katrina recovery efforts starting, progress has stalled for 7 days and a much higher level of production remains off-line as compared to last year.
Uncertainty depends on one’s perspective. While all seems a-ok down the street from me here, panic is gripping motorists in Britain due to a planned protest by truck drivers.
Today's transcript.
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