Wednesday, September 14, 2005
Issue Contents:
| 08:57 | The Day Ahead Economic releases and news |
| 09:40 | Swing Trade Setups Featured charts for Wednesday September 14 |
| 10:42 | US Dollar, Gold All that glitters... |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning, today is Wednesday September 14th, the 257th day of 2005.
August retail sales plummet, dropping 2.1%, or so goes the headlines (U.S. Retail Sales Decline 2.1 Percent, Biggest Drop Since November 2001). The detail is a little different – stripping out automobile sales, sales rose 1 percent, a healthy gain. But wait, if one further strips out retail gasoline sales, sales only rose 0.5%. Lies, damn lies, and statistics.
Rising fuel prices ``suck income out of people’s pockets,’’ U.S. Treasury Secretary John Snow told executives from McDonald’s Corp., the world’s largest restaurant chain, at a conference in Washington yesterday. ``Retail is almost inevitably going to face, and the restaurant business is going to face, some direct consequences from these higher prices.’’
That seems like a sensible thought; September is likely to show a bigger hit, and just wait until we start receiving our winter heating bills. Speaking of fuel, yesterday’s Gulf of Mexico shut-in statistics showed little progress over Monday’s report, extending the stall in recovery now for over a week.
US Market Calendar
- 8:30 am: Retail Sales – August
- 9:15 am: Industrial Production – August
- 9:15 am: Capacity Utilization – August
Canadian Market Calendar
- 8:30 am: Manufacturing Shipments & Orders – July
- 2-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.
Featured setups from Tuesday September 13, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- Symbol scans will return, with improvements, for next week
- Expect a little bounce here, perhaps even a total reversal, although with the SPX having set a new down swing in place, however narrow, we will expect any bounce to be contained within the tall down bar of yesterday’s session.
- Despite the volatile Gold and USD trade of late, both bear watching closely. Article to follow.
- Yesterday’s DIA shorts – we should consider holding short provided price generally holds below the mid-point of Tuesday’s range.
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
Energy – since most of these charts are at or above their recent tests of tops we still need to stalk them on the long side, but with an abundance of caution.
MRO – producer refiner, VLO perhaps as well
ECA
XOM pulling back to break out levels
CVX – another integrated
XTO
DVN
SII – energy services, caution, tricky chart here and has been acting weaker than most in that subsector. Inverse hammer, a little rare.
DO – energy services
BJS – energy services
Other Sectors:
GILD – pharma/biotech – note the gap up, this can signal extreme bullishness, or a reversal. Act accordingly if filled.
PMCS – tech
MXIM – tech
IBM – tech
NEM – gold, follow up on other likely candidates ABX, KGC, CDE, GG, etc.
Test of Top – Continuation
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
FRE – lending, caution, has been in a strong down trend for a while now.
ANF – retail, same caution as FRE
Lets use Multiple Time Frame analysis in our review of the US Dollar and you’ll see that the picture changes dramatically as we move from large time frame to small:
USD Index, weekly – a potential inverse head and shoulders could deliver a massive move up, in time, however these big patterns are rarely reliable and certainly can’t be used for timing entries or exits – simply a data point to keep in mind, particularly if price can break out above the downtrend line drawn (yellow) and hold that break out.
USD Index, daily – price is in a defacto downtrend already; a break under Monday’s tall up bar will reassert the down trend and likely bring acceleration to the selling as well (with a predictable, inverse, impact on Gold at the same time).
USD Index, intraday – should the index hold under 87.50 we can expect the major level of support near 87 will be retested and a pass or fail there will very likely determine direction for the dollar for the next few days if not weeks.
Impact on Gold
Gold is near important multi-year, multi-decade highs here. This was given as reason for the sell off the other day (lack of new buyers) but we always expect price volatility near important tests – reasons are largely immaterial, only actions matter at tests of tops. The big down bar gives us reason to expect an attempt at a range breakout IF price can climb back up fairly quickly. Heads up!
Today's transcript.
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