December 28, 2011 HOME EDUCATIONAL PRODUCTS CONTACT TONI An online version of this newsletter is available at http://www.tonihansen.com/Newsletters/current.html. FREE TRADING COURSE Good day! I’d like to invite you to check out a free trading course put together by former floor trader Adam Hewison. In it he covers: (1) The importance of psychology in price movement (2) How to spot mega trends (3) Understanding of technical price objectives (4) How to picture price objectives (5) How to trade with moving averages (6) How to use point and figure trading techniques (7) How to use the RSI indicator (8) How to correctly use stochastics in your trading (9) How to use the ADX indicator to capture trends (10) How to capitalize on natural market cycles. Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more. To access your copy right away, go to: http://www.ino.com/info/447/CD3633/anddp=0andl=0andcampaignid=6 Daily Commentary HAPPY HOLIDAYS! (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.) FRIDAY’S MARKET WRAP-UP Market Snapshot for December 22, 2011 (1:31 a.m. ET, Dec. 27): Closing Prices: DOW 12,294.00 (+124.35, +1.02%), SandP 500 1,265.33 (+11.33, +0.9%), NASDAQ 2,618.64 (+19.19, +0.74%), Nikkei 225 8,440.56 (-38.78, -0.46%), DAX 5,878.93 (+26.75, +0.46%), FTSE 5,512.70 (+55.73, +1.02%) OIL 99.42, GOLD 1,597.40, SILVER 28.91 EURO 1.3069,YEN 77.89, BRITISH POUND 1.5636, U.S. DOLLAR INDEX 80.235 Markets Teeter on the Edge of a Positive Year This year has been a rather uneventful one for the broad market. Most of it has been spent in a trading range with the indices constantly flirting with positive and negative territory. While the first half of the year was spent mainly in the black with retests of the zone of the year’s lows, the selloff in late July and the start of August shifted the balance of power to the bears and the tables turned. Ever since, the market has been struggling to recover and finish the year in the black. And it may still succeed. Dow Jones Industrial Average (Figure 1) This past week was a light one for trade as market participants began to dwindle thanks to the approaching holiday, but it was nevertheless a positive one as market players appeared to be entering the end of the year in good spirits despite the angst they experienced. Or perhaps they just wanted to give things a little boost to be able to show at least some gain on their books. Either way, the week ended higher by 3.6% for the Dow Jones Ind. Average ($DJI), 3.74% for the SandP 500 ($SPX), and 2.48% for the Nasdaq Composite ($COMPX). All 10 of the SandP’s industry groups were positive. For the year-to-date, the Dow is up 6.19%, the SandP 500 is up 0.61%, and the Nasdaq is down 1.29%, and the Russell 2000 is down 4.59%. In other markets: crude oil is up 9.08%, gold is up 12.99%, the U.S. Dollar Index is up 1.2%, and the 10-year Treasury is down 38.58% year-to-date. SandP 500 (Figure 2) Friday’s Index Wrap-up The Dow Jones Industrial Average ($DJI) ended the day on Friday with a gain of 61.91 points, or 0.51%, and closed at 12,169.65. Twenty-eight of the Dow’s thirty index components ended the session in the black. The strongest were Bank of America (BAC) (+2.38%), Disney (DIS) (+2.03%), and Cisco Systems (CSCO) (+1.88%). The two losers were Alcoa (AA) (-0.56%) and Boeing (BA) (-0.43%). The SandP 500 ($SPX) finished the session with a gain of 10.28 points, or 0.83%, and closed at 1,254.00. The strongest individual percentage performers in the index were TripAdvisor (TRIP) (+6.07%), Walgreen Co. (WAG) (+4.19%), and International Game Tech. (IGT) (+3.70%). The weakest were Mead Johnson Nutrition (MJN) (-5.05%), MetroPCS Communications (PCS) (-2.97%), and LSI Corp. (LSI) (-2.48%). The Nasdaq Composite ($COMPX) ended the session higher by 21.48 points, or 0.83%, on Friday and it closed at 2,599.45. The top index components in the Nasdaq-100 ($NDX) were Fossil Inc. (FOSL) (+3.58%), Expedia Inc. (EXPE) (+3.05%), and Applied Materials (AMAT) (+2.75%). The weakest were CTrip (CTRP) (-2.85%), Netflix (NFLX) (-1.65%), and Marvell Tech. (-1.19%). Nasdaq Composite (Figure 3) This shortened trading week will be even lighter than last with volume not returning in full force until the new year. There is very little on the docket data-wise to stir things up. Today brings with it the Case-Shiller 20-city Home Price Index for October and December’s Consumer Confidence report. Also out this week are the National Realtors’ pending-home-sales report on Thursday and the Chicago Purchasing Managers Index report for December on Friday. The market is currently dealing with resistance from the earlier highs this year and a slow-down in momentum as that level approached has put a damper on last week’s rally. It will make it more difficult to push sharply to higher highs out of the daily trading range that the market has been stuck in over the past several months, but the market will be hesitant to give up its meager gains. The market does tend to hold support and resistance levels and technical patterns extremely well when volume is on the light side, and while the session ahead of a holiday is pretty tame, market moves are often amplified in light-volume trade. ECONOMIC REPORTS AND EVENTS THIS WEEK Dec 27 9:00 AM Case-Shiller 20-city Index Oct Dec 27 10:00 AM Consumer Confidence Dec Dec 28 7:00 AM MBA Mortgage Index 12/24 Dec 29 8:30 AM Initial Claims 12/24 Dec 29 8:30 AM Continuing Claims 12/17 Dec 29 10:00 AM Pending Home Sales Nov Dec 29 11:00 AM Crude Inventories 12/24 Dec 30 9:45 AM Chicago PMI Dec International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Dec 26 21:00 CNY Industrial Profits YTD (NOV) Dec 27 JPY Annualized Housing Starts (NOV) Dec 27 JPY Housing Starts (NOV) Dec 27 02:00 CHF UBS Consumption Indicator (NOV) Dec 27 10:00 USD Consumer Confidence (DEC)*** Dec 27 18:30 JPY Household Spending (NOV) Dec 27 18:30 JPY Jobless Rate (NOV) Dec 27 18:30 JPY National Consumer Price Index (NOV) Dec 27 18:30 JPY National Consumer Price Index Ex-Fresh Food (NOV) Dec 27 18:30 JPY National Consumer Price Index Ex Food, Energy (NOV) Dec 27 18:50 JPY Retail Trade (NOV) Dec 27 18:50 JPY Large Retailers’ Sales (NOV) Dec 27 18:50 JPY Industrial Production (NOV P) Dec 28 05:30 CHF KOF Swiss Leading Indicator (DEC) Dec 29 GBP Nationwide House Prices n.s.a. (DEC) Dec 29 10:00 USD Pending Home Sales (NOV) Dec 29 18:15 JPY Nomura/JMMA Manufacturing Purchasing Manager Index (DEC) Dec 29 19:30 AUD Private Sector Credit (NOV) Dec 30 EUR German Consumer Price Index (DEC)*** Dec 30 EUR German Consumer Price Index – EU Harmonised (DEC P)*** Dec 30 04:30 GBP Bank of England Housing Equity Withdrawal (3Q) (3Q) *** 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, Dec 26, 2011 Before: – During: – After: – Tuesday, Dec 27, 2011 Before: CALM During: – After: Wednesday, Dec 28, 2011 Before: – During: PNY After: BLIN Thursday, Dec 29, 2011 Before: – During: – After: DMND Friday, Dec 30, 2011 Before: SHIP, MVC, RDI During: EONC, GSI, HAUP After: ARKR, NOBH 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. DISCLAIMER There is a very high degree of risk involved in trading securities. Past results are not indicative of future returns. Prior to the execution of any securities trade, you should always consult with your broker or other financial advisor. The positions given and described by the Bastiat Group, Inc. and its employees and affiliates are for educational purposes only. The Bastiat Group, Inc. and its members, employees, agents, consultants, analysts, representatives, content and/or service providers, affiliates, subsidiaries, successors and assigns (hereinafter collectively, The Bastiat Indemnities) assume no responsibility or liability for your trading and investment results. Go to http://www.tonihansen.com/disclaimer.html for a complete disclaimer. (C) 1998-2011 All information presented is property of TradingFromMainStreet.com and Bastiat Group, Inc. PO Box 330 Roland, IA 50236 , USA To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?LEwsrOzMtCxMnBwcTCzstEa0jIwMjAyMzJw=