Friday, September 16, 2005
Issue Contents:
| 09:04 | The Day Ahead Economic releases and news |
| 09:28 | Swing Trade Setups Featured charts for Friday September 16 |
| 16:15 | TrendVue Trader Talk Today's transcript. |
Good morning, today is Friday September 16th, the 259th day of 2005.
Ahead of the market open, stock index futures point to a higher open, with that group up one third to one half percent – following three days of selling, a bounce is to be expected but whether it holds here or heads lower in the days to come only time will tell, so be ready for either eventuality.
Crude oil futures are off three quarters percent, while natural gas futures are up almost an equivalent amount. Natural gas, it needs to be remembered, as a wholly North American production and consumption market – the small amount of imported liquified natural gas can not off-set shortfalls caused by high demand or production problems.
Yesterday we learned that recovery of oil and gas production in the Gulf of Mexico remains stalled, with only marginal gains having been made since September 7th. 840 thousand barrels per day of oil (56%) and 3.4 billion cubic feet per day of gas (34%) remain off-line due to on-shore and off-shore issues including underwater pipeline damage, some of which remainst to be quantified.
Also yesterday, OPEC reduced its estimate for world demand growth by 100 thousand barrels per day for 2005, but demand is still expected to grow this year and next, regardless of the price of the commodity. To put this in context, the original estimates for demand growth in 2005 and 2005 were 3.043 and 1.800 million barrels per day, respectively.
If one looks back through time you’ll see that regardless of price, demand for oil has dipped only after supply was cut off (as a result of the OPEC oil embargo), and, except for those politically inspired price hikes (which left a recession in its wake), demand kept on chugging higher in every other year since.
USD dollar volatility and sheer momentum in the gold market have pushed the shiny yellow metal up to highs not seen in well over a decade. Its a test of the 2005 highs, heads up!
Reminder: Next week, on Tuesday, the Federal Open Market Committee will meet again to determine if another interest rate hike is appropriate at this time. Most observers continue to believe they will press ahead with their gradual removal of policy accomodation and hike overnight lending rates by another 1/4 point.
US Market Calendar
- Quadruple Witching Day (contracts stock index futures and options, single stock futureus and stock options expire)
- 8:30 am: Current Account – Q2
- 9:00 am: Foreign Purchases of U.S. Securities – July
- 9:45 am: University of Michigan Consumer Sentiment Index – September, preliminary
- 10:00 am: Federal Reserve Governor Mark Olson to speak about business trends in banking
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.
Featured setups from Thursday September 15, 2005 closing data symbol scan (http://www.trendvue.com/latestscan).
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- In addition to Quadruple witching, the S&P index is being re-weighted according to float size in its component stocks. Expect all sorts of odd moves today which may not last through to next week. I’ll largely be using ETF’s for long exposure if the market holds up, but won’t be surprised if these trades are stopped out at break even next week.
ETFS
DIA, for example, could be stalked long as price hasn’t pulled back all that far from the harami turn several days ago, but please remember that until a higher swing high is set, this market is already in a potential down trend following failed test of top back in early August.
SMH semis may be a good spot for a positive market.
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
ZRAN, semi related following breakout
WFR, pull back following breakout
Test of Top – Continuation
MCDTA follow up from yesterday
YHOO
ORCL – one day only
AV following up, last day
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
WB – financials
INTU – software
PG – bounce should be followed up 1 – 2 more days max
PG – weekly – failed test of top last week, so… caution on long side, and exploit the short side if so inclined.
STI – finance – stealth bear flag forming above test of bottom
Test of Bottom – Continuation
KMB – consumer paper products – follow any weak bounce up 1 – 2 more days
BAC – financial – same per KMB
Special Situations
ERTS – gaming – long – if triggered must hold strongly into the close before considering holding – prior resistance (dotted line) must turn into new support here or else.
Today's transcript.
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