December 19, 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 BAC Breaks $5/Share, But Market Recovers Afterhours (Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.) MONDAY’S MARKET WRAP-UP Market Snapshot for December 19, 2011 (11:31 p.m. ET): Closing Prices: DOW 11,766.26 (-100.13, -0.84%), SandP 500 1,205.35 (-14.31, +1.17%), NASDAQ 2,523.14 (-32.19, -1.26%), Nikkei 225 8,340.75 (+44.63, +0.54%), DAX 5,670.71 (-31.07, -0.54%), FTSE 5,364.99 (-22.35, -0.41%) OIL 94.30, GOLD 1,599.00, SILVER 28.85 EURO 1.2997, YEN 77.97, BRITISH POUND 1.5513, U.S. DOLLAR INDEX 80.905 Financials Once Again Take a Beating The market has continued to face choppy trade as we head into the end of the year. The index futures were trading sharply lower Sunday evening, but made such a strong recovery following Europe’s open that all three of the major indices were in the black by the time Monday’s opening bell rang. The move, however, was also exhausted by that point and the indices were struggling out of the gate to hold onto those gains. Slightly higher highs in the Dow ($DJI) in premarket trade created a Momentum Reversal short setup into the open, while both the SandP 500 ($SPX) and Nasdaq ($COMPX) joined the Dow in a gradual pullback into 10:00 a.m. ET and the 5 minute 20 period moving average support intraday. This support held initially, but the market hugged the support zone, creating a short pattern I’ve dubbed an “Avalanche”. This forms as the indices hug initial support following a reversal off highs. As it hugs that support, volume drops, indicating a lack of buying interest even as prices attempt to recover. This pattern triggered with the 10:45 ET correction period and the premarket gains were quickly erased. The market remained weak throughout Monday’s session. The indices congested mid-day and throughout most of the afternoon, creating another short pattern. It was Bank of America’s (BAC) break of the $5/share mark, however, that triggered the second wave of selling on Monday. When BAC broke, the indices quickly broke through intraday lows and the session ended near lows, albeit at support on the 15 minute time frame. Dow Jones Industrial Average (Figure 1) Monday’s Index Wrap-up The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 100.13 points, or 0.84%, and closed at 11,766.26. Only Merck (MRK) (+0.61%), Pfizer (PFE) (+0.52%), and Caterpillar (CAT) (+0.06%) came out ahead. The weakest were the financials. Bank of America (BAC) fell 4.22%, while JP Morgan (JPM) fell 3.73%. The SandP 500 ($SPX) finished the session with a loss of 14.31 points, or 1.17%, and closed at 1,205.35. The strongest individual percentage performers in the index were Cerner Corp. (CERN) (+2.45%), Cablevision Sys. Corp. (CVC) (+1.96%), and DTE Energy Co. (DTE) (+1.54%). The weakest were Genworth Financial Inc. (GNW) (-8.15%), United States Stl. Corp. (X) (-7.81%), and Alpha Natural Resources (ANR) (-7.24%). The Nasdaq Composite ($COMPX) ended the session lower by 32.19 points, or 1.26%, on Monday and it closed at 2,523.14. The top index components in the Nasdaq-100 ($NDX) were Cerner Corp. (CERN) (+2.45%), Sirius XM Radio (SIRI) (+2.26%), and Green Mountain Coffee Roasters (GMCR) (+1.57%). The weakest were First Solar (FSLR) (-4.42%), Micron Tech. (MU) (-4.22%), and Research In Motion (RIMM) (-4.09%). SandP 500 (Figure 2) Despite the strong day of selling on Monday, the indices have stuck to the recent tradition of sharp overlap from one day to the next as daily congestion continues. Monday afternoon’s 15 minute support held and the slight shift in momentum in the final 45 minutes of trade helped the market form an initial recovery afterhours. Resistance from Monday’s mid-day price congestion struck around 21:00 ET, but the index futures hugged this resistance zone and were able to break through it once again with strength out of the European open. This has created a second wave of buying off Monday’s lows that has returned the market to the price zone at Monday’s highs. Despite the increase in momentum into this level, it will still serve as resistance heading into Tuesday’s open and we can easily expect to see a choppier morning session. Maintaining a strong opening trend will be difficult. Nasdaq Composite (Figure 3) ECONOMIC REPORTS AND EVENTS THIS WEEK Dec 19 10:00 AM NAHB Housing Market Index Dec Dec 20 8:30 AM Housing Starts Nov Dec 20 8:30 AM Building Permits Nov Dec 21 7:00 AM MBA Mortgage Index 12/17 Dec 21 10:00 AM Existing Home Sales Nov Dec 21 10:30 AM Crude Inventories 12/17 Dec 22 8:30 AM Initial Claims 12/17 Dec 22 8:30 AM Continuing Claims 12/12 Dec 22 8:30 AM GDP – Third Estimate Q3 Dec 22 8:30 AM GDP Deflator – Third Estimate Q3 Dec 22 9:55 AM Michigan Sentiment – Final Dec Dec 22 10:00 AM Leading Indicators Nov Dec 22 10:00 AM FHFA Housing Price Index Oct Dec 23 8:30 AM Durable Orders Nov Dec 23 8:30 AM Durable Goods Orders -ex Transportation Dec Dec 23 8:30 AM Personal Income Nov Dec 23 8:30 AM Personal Spending Nov Dec 23 8:30 AM PCE Prices – Core Nov Dec 23 10:00 AM New Home Sales Nov International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Dec 18 16:00 NZD Westpac NZ Consumer Confidence (4Q) (4Q) Dec 18 19:00 NZD NBNZ Activity Outlook (DEC) Dec 18 19:00 NZD NBNZ Business Confidence (DEC) Dec 18 19:01 GBP Rightmove House Prices (DEC) Dec 19 JPY Cabinet Office Monthly Economic Report Dec 19 18:00 AUD Conference Board Leading Index (OCT) Dec 19 19:01 GBP GfK Consumer Confidence Survey (DEC) Dec 19 19:01 GBP Nationwide Consumer Confidence (NOV) Dec 19 19:30 AUD Reserve Bank’s Board December Minutes*** Dec 19 23:30 JPY All Industry Activity Index (OCT) Dec 20 00:00 JPY Leading Index (OCT F) Dec 20 02:00 EUR German GfK Consumer Confidence Survey (JAN) Dec 20 02:00 EUR German Producer Prices (NOV)*** Dec 20 02:00 CHF Trade Balance (NOV) Dec 20 04:00 EUR German IFO – Business Climate (DEC) Dec 20 04:00 EUR German IFO – Current Assessment (DEC) Dec 20 04:00 EUR German IFO – Expectations (DEC) Dec 20 06:00 GBP CBI Reported Sales (DEC) Dec 20 07:00 CAD Consumer Price Index (NOV)*** Dec 20 07:00 CAD Bank Canada Consumer Price Index Core (NOV)*** Dec 20 08:30 USD Housing Starts (NOV) Dec 20 08:30 USD Building Permits (NOV) Dec 20 16:45 NZD Current Account Balance (3Q) Dec 20 18:50 JPY Merchandise Trade Balance Total (NOV) Dec 20 21:00 NZD Credit Card Spending (NOV) Dec 21 JPY Bank of Japan Rate Decision (DEC 21)*** Dec 21 04:30 GBP Bank of England Minutes*** Dec 21 04:30 GBP Public Finances (PSNCR) (NOV) Dec 21 04:30 GBP PSNB ex Interventions (NOV) Dec 21 04:30 GBP Public Sector Net Borrowing (NOV) Dec 21 08:30 CAD Retail Sales (OCT) Dec 21 10:00 EUR Euro-Zone Consumer Confidence (DEC A) Dec 21 10:00 USD Existing Home Sales (NOV) Dec 21 16:45 NZD Gross Domestic Product (3Q)*** Dec 22 00:00 JPY Bank of Japan Monthly Economic Report Dec 22 04:30 GBP Gross Domestic Product (3Q F)*** Dec 22 04:30 GBP Current Account (3Q) Dec 22 04:30 GBP Total Business Investment (3Q F) Dec 22 08:30 USD Gross Domestic Product (Annualized) (3Q T)*** Dec 22 08:30 USD Personal Consumption (3Q T) Dec 22 08:30 USD Gross Domestic Product Price Index (3Q T)*** Dec 22 08:30 USD Core Personal Consumption Expenditure (3Q T) Dec 22 09:55 USD U. of Michigan Confidence (DEC F)*** Dec 22 10:00 USD Leading Indicators (NOV) Dec 23 04:30 GBP BBA Loans for House Purchase (NOV) Dec 23 08:30 USD Durable Goods Orders (NOV)*** Dec 23 08:30 USD Durables Ex Transportation (NOV) Dec 23 08:30 CAD Gross Domestic Product (OCT)*** Dec 23 08:30 USD Personal Income (NOV) Dec 23 08:30 USD Personal Spending (NOV) Dec 23 10:00 USD New Home Sales (NOV) *** Highly influential Notice: 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 19, 2011 Before: – During: – After: RHT Tuesday, Dec 20, 2011 Before: CAG, GIS, JEF, NAV, SAFM During: – After: FSII, JBL, NKE, ORCL, PAYX, SHFL, STND Wednesday, Dec 21, 2011 Before: ATU, KMX, SHAW, WAG During: – After: BBBY, FINL. MLHR, LUB, SCS, TIBX Thursday, Dec 22, 2011 Before: AM, NEOG During: – After: CAMP, CBK Friday, Dec 23, 2011 Before: – During: – After: 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=
