February 7, 2011
An online version of this newsletter is available at http://www.tonihansen.com/Newsletters/current.html.
Where'd Everyone Go? (Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)
MONDAY'S MARKET WRAP-UP
Market Snapshot for February 6, 2011 (5:50 p.m. ET): Closing Prices: DOW 12,845.13 (-17.10, -0.13%), SandP 500 1,344.33 (-0.57, -0.04%), NASDAQ 2,901.99 (-3.67, -0.13%), Nikkei 225 8,929.20 (-, -%), DAX 6,764.83 (-1.84, -0.03%), FTSE 5,892.20 (-8.87, -0.15%) OIL 96.91, GOLD 1,724.90, SILVER 33.675 EURO 1.312,YEN 76.55, BRITISH POUND 1.5814, U.S. DOLLAR INDEX 79.185
Market Struggles Between Support and Resistance Zones Intraday Monday was a slow day on Wall Street. And by slow, I mean one of the slowest non-holiday trading days we've seen in about a decade. The market put in a strong performance on Friday after a favorable reaction to last month's employment data. The U.S. economy added 243,000 new positions in January, while the unemployment rate dropped to 8.3%. The data surge put the indices squarely at resistance by rapidly establishing an equal move compared to Wednesday's morning rally. By 10:15 a.m. ET most of the gains for the day were already established and the market began to struggle. Even though the indices finished the week at highs, trading in the second half of the morning and the entire afternoon on Friday shifted the momentum of the morning rally and created an exhaustion pattern heading into the weekend.
The index futures opened lower Sunday evening with Greece once again holding the headlining position. The country once again failed to meet a deadline to negotiate its debt. The news, however, was unsurprising and the pullback into the new week was more likely a technical measure than one driven by this revelation. The breakdown into Sunday evening was mirrored in early trade Monday morning before the indices finally struck stronger support at 4:00 a.m. ET. Two-wave corrections are common in the market and the second move brought the futures into a 50% retracement zone as the market took back half the gains from Friday's employment run. After striking support, however, the market lacked direction and floundered along throughout most of the session. Although the predominant intraday trend was higher, the move was marked by choppy trade and a lack of decent reward to risk ratios in index-centered strategies. The market was also short on strong intraday movers in individual stocks for those that did pull away from index trading alone. The forex market offered more to market participants throughout the morning than the indices overall and was one of the best outlets for intraday traders for the day, but forex action died down after 13:00 ET.
The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 17.10 points, or 0.13%, and closed at 12,845.13. Eleven of the Dow's thirty index components posted a gain. The top performers were Bank of America (BAC) (+1.66%), Procter and Gamble (PG) (+1.18%), and Disney (DIS) (+1.15%). The weakest performers were Travelers (TRV) (-1.31%), Pfizer (PFE) (-1.18%), and Boeing (BA) (-1.15%). The SandP 500 ($SPX) finished the session with a loss of 0.57 points, or 0.04%, and closed at 1,344.33. The only two industry groups to post gains were energy (+1.1%) and telecoms (+0.3%). The top individual percentage performers in the index were Abercrombie and Fitch (ANF) (+9.48%), Sprint Nextel (S) (+6.03%), and Best Buy (BBY) (+3.39%). The weakest industry groups were financials (-0.5%) and materials (-0.5%). The top individual decliners were Medco Health Solutions (MHS) (-8.08%), Humana (HUM) (-5.40%), and Express Scripts (ESRX) (-4.65%). MHS and ESRX shares fell on a report that the Federal Trade Commission could be gathering evidence to prevent Express Scripts' planned purchase of Medco Health. Humana's (HUM) earnings were in line with estimates, but revenue fell short of expectations. The Nasdaq Composite ($COMPX) ended the session lower by 3.67 points, or 0.13%, on Monday and it closed at 2,901.99. The strongest performers in the Nasdaq-100 ($NDX) were Green Mountain Coffee Roasters (GMCR) (+4.24%), Vertex Pharmaceuticals (VRTX) (+4.00%), and First Solar (FSLR) (+2.97%). The weakest were Express Scripts (ESRX) (-4.65%), Micron Tech. (MU) (-2.89%), and Expeditors Intl. (EXPD) (-2.45%). Nasdaq Composite (Figure 3) As we head into Tuesday, the market is still failing to develop a larger daily reversal pattern despite the upside extension. We'll need more than a two-wave correction on the 15 minute time frame and a break in the 20 day moving averages to confirm. So far the Nasdaq has held its 10-day moving average since December and the SandP 500 and Dow have only broken their 10-day moving averages once. New swingtrades (multi-day strategies) will again be higher risk to initiate than daytrades at this time and volume is likely to remain light. This week is not a particularly busy one for economic data, but some names to watch for earnings on Tuesday will be Coca-Cola (KO), BP (BP), Hartford Financial (HAR), Disney (DIS), and Panera Bread (PNRA).
ECONOMIC REPORTS AND EVENTS THIS WEEK
U.S. Domestic: Eastern Time Zone (GMT -5:00) (New York, Toronto) Feb 7 3:00 PM Consumer Credit Dec Feb 8 7:00 AM MBA Mortgage Index 02/04 Feb 8 10:30 AM Crude Inventories 02/04 Feb 9 8:30 AM Initial Claims 02/04 Feb 9 8:30 AM Continuing Claims 01/28 Feb 9 10:00 AM Wholesale Inventories Dec Feb 10 8:30 AM Trade Balance Dec Feb 10 9:55 AM Mich Sentiment Feb Feb 10 2:00 PM Treasury Budget Jan International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Feb 05 18:30 AUD TD Securities Inflation (JAN) Feb 05 19:30 AUD Retail Sales Ex Inflation (4Q) Feb 05 19:30 AUD Retail Sales s.a. (DEC) Feb 06 JPY Machine Tool Orders (JAN P) Feb 06 04:30 EUR Euro-Zone Sentix Investor Confidence (FEB) Feb 06 06:00 EUR German Factory Orders s.a. (DEC) Feb 06 10:00 CAD Ivey Purchasing Managers Index s.a. (JAN) Feb 06 16:45 NZD Average Hourly Earnings (4Q) Feb 06 17:30 AUD AiG Performance of Construction Index (JAN) Feb 06 22:30 AUD Reserve Bank of Australia Rate Decision (FEB 7)*** Feb 07 00:00 JPY Leading Index (DEC P) Feb 07 06:00 EUR German Industrial Production n.s.a. and w.d.a. (DEC) Feb 07 15:00 USD Consumer Credit (DEC) Feb 07 18:30 AUD Westpac Consumer Confidence (FEB) Feb 07 18:50 JPY Trade Balance - BOP Basis (DEC) Feb 08 JPY Eco Watchers Survey: Current (JAN) Feb 08 JPY Eco Watchers Survey: Outlook (JAN) Feb 08 01:45 CHF Unemployment Rate s.a. (JAN) Feb 08 02:00 EUR German Trade Balance (DEC) Feb 08 08:15 CAD Housing Starts (JAN) Feb 08 16:45 NZD Unemployment Rate (4Q) Feb 08 16:45 NZD Employment Change (4Q) Feb 08 18:50 JPY Housing Loans (4Q) Feb 08 18:50 JPY Machine Orders (DEC) Feb 08 20:30 CNY Producer Price Index (JAN)*** Feb 08 20:30 CNY Consumer Price Index (JAN)*** Feb 09 00:00 JPY Consumer Confidence (JAN) Feb 09 01:45 CHF SECO Consumer Confidence (JAN) Feb 09 04:30 GBP Industrial Production (DEC) Feb 09 04:30 GBP Manufacturing Production (DEC) Feb 09 04:30 GBP Visible Trade Balance (DEC) Feb 09 07:00 GBP BOE Asset Purchase Target (FEB)*** Feb 09 07:00 GBP Bank of England Rate Decision (FEB 9)*** Feb 09 07:45 EUR European Central Bank Rate Decision (FEB 9)*** Feb 09 10:00 GBP NIESR Gross Domestic Product Estimate (JAN)*** Feb 09 16:45 NZD NZ Card Spending - Retail (JAN) Feb 09 16:45 NZD NZ Card Spending (JAN) Feb 09 19:30 AUD Reserve Bank Board Statement on Monetary Policy*** Feb 10 CNY Trade Balance (JAN) Feb 10 02:00 EUR German Consumer Price Index (JAN F)*** Feb 10 02:00 EUR German Consumer Price Index - EU Harmonised (JAN F)*** Feb 10 03:15 CHF Consumer Price Index (JAN) Feb 10 03:15 CHF CPI - EU Harmonised (JAN) Feb 10 04:30 GBP Producer Price Index Input n.s.a. (JAN) Feb 10 04:30 GBP Producer Price Index Output n.s.a. (JAN) Feb 10 04:30 GBP Producer Price Index Output Core n.s.a. (JAN) Feb 10 08:30 USD Trade Balance (DEC) Feb 10 09:55 USD U. of Michigan Confidence (FEB P)*** Feb 10 14:00 USD Monthly Budget Statement (JAN) *** Highly influentialNotice: The Bastiat Group, Inc. has attempted to verify the information contained in this calendar, however, any aspect of such info may change without notice. Foreign economic reports included in this list are only those deemed medium to high impact.
KEY EARNINGS ANNOUNCEMENTS THIS WEEK
Monday, Feb 6, 2012 Before: ATRO, BWP, CYOU, CNA, ELNK, PLUS, HAS, HCA, HUM, LAZ, LBY, L, MCY, NNN, NLSN, GOLD, SOHU, SYY, TW, UDR, USAK, USG During: - After: ADVS, AGNC, AMLN, APC, AHL, AEC, RATE, BCDS, BDX, CRDC, CSTR, CRK, DNB, FN, GHDX, GSM, GBDC, GPRE, IEX, KNXA, KFN, LDR, LNCR, LMNX, MCC, NCR, OTTR, OMI, PKY, PRE, PHH, PXD, PSE, PMCS, PPS, RBC, SREV, SPF, TMK, UNM, VECO, WNC, WPP, YUM Tuesday, Feb 7, 2012 Before: ALLT, MT, BMI, BLC, BP, BR, CNC, CBAK, CHD, KO, CFX, CGEN, CVG, DST, EMR, IT, GET, GTIV, G, GLT, HAR, KNL, KUB, LRY, LFUS, LPX, MMP, MLM, MNI, MEDW, NJR, CHUX, OHI, PRGO, PIKE, DFZ, RTI, SMG, SXT, SWI, STE, SSYS, STRS, UBS, VSH During: AGCO, WMCO After: AKR, ARE, ATO, AVNR, AVID, AXS, BBCN, BWLD, CALX, CSII, CBG, CERN, CDXS, CMP, EXBD, PRI, CSGS, DEI, ESE, FORM, FWRD, GLUU, GUID, HIG, ONE, HIW, HNI, HMN, JIVE, KFRC, LCI, LTRE, LIFE, LGND, LNC, LPLA, LRAD, MOSY, NFP, NTGR, OPEN, OPNT, OPXT, PNRA, PLNR, PTP, POWL, PWAV, PZN, QUIK, RAH, RNR, RENT, IMI, SGI, SLH, SNCR, TMH, TTMI, TWO, ULTI, USNA, VCLK, VTSS, DIS, WCN, WU Wednesday, Feb 8, 2012 Before: AGU, AIV, AINV, AUO, CAE, CKSW, CTSH, CSC, CVH, CRIS, CVS, ELN, EZCH, FBRC, FOR, GWR, GRC, HGG, IEC, IMMU, IR, INOD, ICE, VLCCF, LVLT, MSG, MCO, LABL, PHX, RL, PLD, PMT, RVSN, ROLL, RAI, SBGI, S, STO, TWX, GTS, UMC, VPG, VTNC, WXS, WYN ZBRA During: HE, SMI After: FUBC, ARAY, ATRM, AFFX, AKAM, AIN, ALTE, EPAX, ANDE, ARRS, ATML, BDN, CALD, CSCD, CBL, CHSP, CINF, CSCO, CPA, CXW, CZZ, CVA, CYS, DIOD, DVOX, EGAN, ENS, EFX, RE, FEIC, FNF, FSC, FLT, FMC, FBN, BGC, GGP, GIL, GCOM, GRPN, HGR, THG, IBA, IIJI, IRBT, KIM, KRG, MCZ, MTRX, MTD, MNR, NANO, NWS, NWSA, ORLY, OSUR, TIS, PARL, PNG, PNNT, PAA, PRU, RA, RRTS, SCSS, SPTN, SPCHA, SPCHB, SPSC, SPRT, SWS, TCO, THOR, TRIP, TQNT, TBI, TWTC, VLNC, V, WFM Thursday, Feb 9, 2012 Before: ARX, ALXN, BLD, BCE, BECN, BELFA, BDC, BIOC, BIP, BG, CBOE, CCE, CGX, CNVO, CPO, OFC, DNKN, NPO, FORR, GPI, HPY, HERO, IRC, IFF, KKR, LO, LUFK, CLI, MMYT, MFC, MPEL, MNTA, NBL, OZM, OFI, PACR, PMTI, PEP, PM, PTSX, PDS, PBH, RAS, RDA, O, SNI, SEE, SHPGY, SIAL, SIRI, SON, SPR, ELOS, TCK, TDC, TRI, ZBB During: AMOV, ORB, PBR, HTM After: ACET, ATVI, ASEI, ATR, BRKS, CCJ, CBB, CIDM, CGNX, DCT, PROJ, EIHI, ELON, ECPG, ENH, EPHC, EVBN, XIDE, EXPE, FFG, GDI, HOKU, HME, IMPV, INFI, IM, INPH, LNKD, MDTH, MPWR, MRH, MOVE, UEPS, NUAN, NXPI, PER, PMC, PBI, PRO, PL, RSG, SWIR, SYUT, THRX, TRLG, XL, XOXO Friday, Feb 10, 2012 Before: ASX, ALU, AB, LNT, APO, ACI, BPO, BPL, CPN, FLIR, FLO, IPGP, LH, LNCE, NYX, PPL, RLOG, THS
During: - After: AAN Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.
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