TrendVue :: Archive

Friday, September 23, 2005
Issue Contents:

08:10	The Day Ahead Economic releases and news
09:16	Swing Trade Setups Featured charts for Friday September 23rd
16:15	TrendVue Trader Talk Today's transcript.

The Day Ahead

Good morning, today is Friday September 23rd, the 266th day of 2005.

With no economic news on deck today, and next to nothing to report on Monday, markets have nothing to respond to but their own momentum and direction, and the story of the week, Hurricane Rita. (Latest >)

Alcoa is one of many companies warning or blaming results on hurricanes Katrina and Rita, as energy costs continues to hinder performance, even as prices pull back.

Before markets open this morning, stock index futures are trading up marginally; crude oil and natural gas are off approximately one percent, while refined products and natural gas are giving back more than two percent of recent gains. In all cases prices remain well above the lows of last week, from which prices moved sharply higher as news of Rita’s original strengthening hit energy markets. This pull back is natural given the sharp rise days ago on imperfect information – now traders are faced with making their bets before markets close today, on almost as imperfect information as what drove markets sharply higher earlier in the week.

One wonders if the market will return to old concerns following Rita’s departure from the area, such as civil unrest in Nigeria¹.

Market Statistics for Thursday September 22, 2005

Symbols in Up Swings	127
Symbols in Down Swings	552
Up/Down Swing Ratio	0.23 : 1
Up Bars	19%
Down Bars	55%
Inside Bars	10%
Outside Bars	13%
Close > 20EMA	49%
Close > 50SMA	42%
Close > 200SMA	54%
20EMA > 50SMA > 200SMA (trend up)	32%
20EMA < 50SMA < 200SMA (trend down)	25%

¹ Nigeria militia storm oil station
A militia group from Nigeria’s oil-producing Niger Delta region has seized an oil pumping station, in protest at the arrest of its leader. The occupation came after militia leader Mujahid Dokubu-Asari was remanded in custody for two weeks by a judge in the capital, Abuja. He wants more control of oil resources for the Ijaw people of the Niger Delta. The deputy leader of the Niger Delta People’s Volunteer Force, Alali Horsefall, said militiamen were moving towards seven other oil installations in the area. “We will blow up everything. We will set fire to them,” he said.

^ 05.09.23 08:10 #

Swing Trade Setups

Featured setups from Thursday September 22, 2005 closing data symbol scan via http://www.trendvue.com/latestscan

Jump to: Long Setups | Short Setups | Special Situations

Notes for the Day

Crap shoot, that’s what we have facing us. Imperfect information and a bet on whether Rita does serious damage to the nation’s oil and gas infrastructure. You bought yesterday and may add today, if you feel the storm will let the area off very lightly; you stay off to the side or stalk shorts if you don’t; you stay off to the side if, like me, you’ve no idea.
Having said that, I plan on stalking a number of longs today but a) on smaller size, and b) I still have energy longs in core positions that I won’t be exiting today, even if the market sells off, as they are a natural hedge in this situation, and c) I won’t be too surprised if I end up having to sell them at the close. I will only hold solid gainers today – 1 – 2% profit in the position or I will bail. That way, should the market gap down big on Monday, my risk is probably limited to 2 – 3% and on only a small part of my portfolio.

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

HNZ – aggressive buy – very likely to stall above at resistance but occasionally a piercing line setup like this forms a bottom that lasts.

Test of Top – Continuation

N – base materials incl. zinc (steel production)

PD – base materials incl copper. Of course failure of these two here would suggest a failed top and another reason for the market to turn down as a whole… but for now we can still stalk these on the long side. Copper this morning is trying to hold up above yesterday’s close following a breakout above the range (commodity). Also N, PD to some degree, and railways (esp. Canadian railways) are China plays.

CNI / CNR:TSX – rail – simple test of top on NYSE to follow up on

BNI – rail

CSX – rail, suffering due to Katrina but opportunity here perhaps. Tight stops if filled.

Retracement or Pause in Up Swing / Up Trend

ABX – reminder, follow up on the golds, these are likely to make at least one or two more down days but need to be watched every day here. More on the USD and Gold later today.

BRCM – one of the stronger techs

SMH – semi conductor ETF, somewhat easier to trade as a bundle here at this point perhaps…

SFA – cable set tops

ADSK – one of the stronger software cos

JPM – perhaps may hold above resistance here… higher risk, hold only on a strong close.

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

HOTT – consumer discretionary/retail

ASD – doesn’t look all that bad here, but like many charts, has failed to push to new highs on the weekly. Please check a weekly chart to see what I am pointing out. Here ASD is an opportunistic short, aggressive traders only, as its counter trend (on the daily) but may offer some longer term potential if indeed markets are about to continue the rolling over process which started in August.