November 7, 2011

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DAILY COMMENTARY

Market Struggles Following Jobs Data and Italian Unrest (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 November 5, 2011 (4:22 a.m. ET): Closing Prices: DOW 11,983.24 (-61.23, -0.51%), SandP 500 1,253.23 (-7.92, -0.63%), NASDAQ 2,686.15 (-11.82, -0.44%), Nikkei 225 8,801.40 (+160.98, +1.86), DAX 5,966.16 (-167.02, -2.72%), FTSE 5,527.16 (-18.48, -0.33%) OIL 94.26, GOLD 1,756.10, SILVER 34.084 EURO 1.3794, YEN 78.23, BRITISH POUND 1.6029, U.S. DOLLAR INDEX 77.16 Market Sells Off Following Employment Reports Trading was in a holding pattern heading into Friday morning as market participants patiently awaited last month’s employment data. The range heading into the news had a slightly bearish bias despite forming at highs due to the extreme upside that took place on Thursday and a shift in momentum within the range itself heading into Friday morning. This bias was then aided by a dismal response to the premarket news. Even though the unemployment rate slipped from 9.1% to 9.0% in October, job creation was still underwhelming. Nonfarm payrolls fell 5,000 short of the 85,000 that had been anticipated. Nonfarm private payrolls were up 104,000, which was also less-than-anticipated. Once the news sunk in, the market sunk as well. The selloff continued throughout the first half of the morning, but finally found support from Tuesday’s highs. The indices reversed course mid-day, but the reversal was a sloppy one with a lot of price overlap and congestion before finally pulling higher out of the 13:00 ET correction period.

INDEX WRAP-UP

The Dow Jones Industrial Average ($DJI) ended the day on Friday with a loss of 61.23 points, or 0.51%, and closed at 11,983.24. Only five of the Dow’s index’s thirty components posted a gain after the market reversed course once again into the weekend. The top performers were McDonalds (MCD) (+0.87%) and Alcoa (AA) (+0.55%). The weakest was Bank of America (BAC), which posted a loss of 6.08%. It was followed by Intel (INTC) (-1.90%), General Electric (GE) (-1.68%), and Kraft Foods (KFT) (-1.68%). The index ended the week lower by 2.03%. The SandP 500 ($SPX) finished the session with a loss of 7.92 points, or 0.63%, and closed at 1,253.23. The strongest individual percentage performer in the index was Genworth Financial Inc. (GNW) (+16.72%). Other top gainers included Starbucks (SBUX) (+6.74%), United States Steel Corp. (X) (+5.16%), and AK Steel (AKS) (+4.26%). The weakest were Chesapeake Energy (CHK) (-6.75%), Flour Corp. (FLR) (-6.38%), Bank of America (BAC) (-6.08%), and Windstream Corp. (WIN) (-5.43%). The index fell 2.48% for the week. The Nasdaq Composite ($COMPX) ended the session lower by 11.82 points, or 0.44%, on Friday and it closed at 2,686.15. The top index components in the Nasdaq-100 ($NDX) were Illumina Inc. (ILMN) (+6.78%), Starbucks (SBUX) (+6.74%), and Seagate Technology (STX) (+6.07%). The weakest were Warner Chilcott (WCRX) (-7.40%), Netflix (NFLX) (-2.46%), and Comcast Corp. (CMCSA) (-2.44%). The Nasdaq Composite ($COMPX) ended the week lower by 1.86%.

OUTLOOK

Refocusing on Earnings… Maybe… While the biggest weeks for earnings are now behind us and announcements are starting to taper off, this week will still be a busy one. Earnings to watch for include Walt Disney (DIS), General Motors (GM), Macy’s (M), Nvidia (NVDA), Cisco Systems (CSCO), and Nordstrom (JWN). The conclusion of last week’s G20 meeting and a vote of confidence from Greek’s parliament on Friday for its prime minister will hopefully start to move some of the focus away from Europe and the teeter-totter of news reports that have swung the market wildly from one day to the next in recent weeks. Although the latest out of Europe, including Greece’s push over the weekend for governmental reforms, and concerns over Italy’s future following rumors that its prime minister was on the verge of resigning, have continued to impact trade early this week. Italy is the euro-zone’s third largest economy. The index futures had a strong open to trade on Sunday evening, but fell sharply back to Friday’s lows before turning higher once again in early premarket trade to recover most of the losses as we approach Monday’s opening bell. Despite an upper-level base on the 30-minute charts though, the larger time frame action makes this trading range susceptible to holding highs in the early morning intraday since the pull off lows will create exhaustion into last week’s highs and larger trend resistance from highs last month will limit upward mobility early this week even if the market can managed to shift momentum later on to push through last week’s highs.

ECONOMIC REPORTS AND EVENTS THIS WEEK

Nov 7 3:00 PM Consumer Credit Sep Nov 9 7:00 AM MBA Mortgage Index 11/05 Nov 9 10:00 AM Wholesale Inventories Sep Nov 9 10:30 AM Crude Inventories 11/05 Nov 10 8:30 AM Initial Claims 11/05 Nov 10 8:30 AM Continuing Claims 10/29 Nov 10 8:30 AM Export Prices ex-ag. Oct Nov 10 8:30 AM Import Prices ex-oil Oct Nov 10 8:30 AM Trade Balance Sep Nov 10 2:00 PM Treasury Budget Oct Nov 11 9:55 AM Mich Sentiment Nov International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Nov 6 19:30 AUD TD Securities Inflation (OCT) Nov 7 01:45 CHF Unemployment Rate s.a. (OCT) Nov 7 03:15 CHF Consumer Price Index (OCT) Nov 7 03:15 CHF CPI – EU Harmonised (OCT) Nov 7 04:30 EUR Euro-Zone Sentix Investor Confidence (NOV) Nov 7 05:00 EUR Euro-Zone Retail Sales (SEP) Nov 7 06:00 EUR German Industrial Production n.s.a. and w.d.a. (SEP) Nov 7 15:00 USD Consumer Credit (SEP) Nov 7 19:01 GBP RICS House Price Balance (OCT) Nov 7 19:30 AUD Trade Balance (SEP) Nov 7 19:30 AUD NAB Business Confidence (OCT) Nov 8 01:45 CHF SECO Consumer Confidence (OCT) Nov 8 02:00 EUR German Trade Balance (SEP) Nov 8 04:30 GBP Industrial Production (SEP) Nov 8 04:30 GBP Manufacturing Production (SEP) Nov 8 08:15 CAD Housing Starts (OCT) Nov 8 10:00 GBP NIESR Gross Domestic Product Estimate (OCT) Nov 8 18:30 AUD Westpac Consumer Confidence (NOV) Nov 8 18:50 JPY Trade Balance – BOP Basis (SEP) Nov 8 19:30 AUD Home Loans (SEP) Nov 8 21:00 CNY Consumer Price Index (OCT)*** Nov 8 21:00 CNY Producer Price Index (OCT)*** Nov 9 CNY Industrial Production YTD (OCT) Nov 9 CNY Industrial Production (OCT) Nov 9 CNY Fixed Assets Inv Excl. Rural YTD (OCT) Nov 9 CNY Retail Sales YTD (OCT) Nov 9 CNY Retail Sales (OCT) Nov 9 JPY Eco Watchers Survey: Current (OCT) Nov 9 JPY Eco Watchers Survey: Outlook (OCT) Nov 9 04:30 GBP Visible Trade Balance (SEP) Nov 9 08:30 CAD New Housing Price Index (SEP) Nov 9 09:30 USD Bernanke Speaks at Fed Conference on Small Business Nov 9 16:30 NZD Business NZ Performance of Manufacturing Index (OCT) Nov 9 18:50 JPY Machine Orders (SEP) Nov 9 19:30 AUD Employment Change (OCT)*** Nov 9 19:30 AUD Unemployment Rate (OCT)*** Nov 9 19:30 AUD Full Time Employment Change (OCT) Nov 9 19:30 AUD Part Time Employment Change (OCT) Nov 10 CNY Trade Balance (OCT) Nov 10 JPY Consumer Confidence (OCT) Nov 10 01:00 JPY Machine Tool Orders (OCT P) (OCT P) Nov 10 02:00 EUR German Consumer Price Index (OCT F)*** Nov 10 02:00 EUR German Consumer Price Index – EU Harmonised (OCT F)*** Nov 10 04:00 EUR ECB Publishes Nov. Monthly Report *** Nov 10 07:00 GBP BOE Asset Purchase Target (NOV)*** Nov 10 07:00 GBP Bank of England Rate Decision (NOV 10)*** Nov 10 08:30 USD Trade Balance (SEP) Nov 10 14:00 USD Monthly Budget Statement (OCT) Nov 10 18:50 JPY Tertiary Industry Index (SEP) Nov 11 CNY New Yuan Loans (OCT)*** Nov 11 04:30 GBP Producer Price Index Input n.s.a. (OCT) Nov 11 04:30 GBP Producer Price Index Output n.s.a. (OCT) Nov 11 04:30 GBP Producer Price Index Output Core n.s.a. (OCT) Nov 11 09:55 USD U. of Michigan Confidence (NOV P)*** *** 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, Nov 7, 2011 Before: AWR, BLTI, BSFT, CCJ, CRNT, CNIT, CYD, CDE, DISH, SATS, XPO, FSCI, HWCC, LAWS, LEE, LOJN. LPX, MNTA, NNN, ORBK, KWK, SHEN, SYY, NGLS, TESO, TW, TRCR, TRGP, VRS During: – After: AVCA, ATSG, ALXA, AMAG, ASEI, ARCI, ATLS, BWC, BRS, CATM, CFN, CKEC, TAST, CLDT, CLNY, EXE, CUTR, DAC, DPM, TRAK, DCTH, DMD, PLOW, DTSI, DCO, LONG, ENOC, FN, FNGN, FAC, GEOI, LOPE, GTAT, HALO, HOLX, HPP, IPHS, IIJI, IPAS, IRWD, ISIS, LLNW, LXU, MKL, MWE, MR, MHGC, OAS, PKY, PCLN, PKT, QNST, RAX, SNTS, SZYM, BID, SSNC, STXS, SNHY, SRZ, SHO, SYKE, TWGP, TWTC, EGY, VVUS, WMS Tuesday, Nov 8, 2011 Before: AAON, ASTM, ACHN, AER, AYR, AMRI, ARGN, ARCC, BIOS, CRZO, CASM, CV, CAAS, COBR, CGEN, CORE, CVU, DOVR, SSP, EBIX, EMCI, ES, EF, XIDE, ASUR, FOSL, FTEK, GEL, HL, HFC, INSM, IFF, IRDM, JRCC, VLCCF, KNOL, LCAPA, LINTA, LSTZA, LCUT, LMIA, MMYT, MPW, MDSO, MEMS, BKR, MITI, LABL, NGS, TNDM, NXST, NEXS, NGPC, PTEK, PGR, RDA, RJET, DFZ, RNO, ROK, ROSE, SATC, SMG, LEDS, SUG, TMS, WPC, WRES, WLB, ZBRA During: AAT, BOFI, BBEP. CNTY After: ARAY, ACTS, ATVI, ALSK, ALEX, AIQ, DOX, ANDE, AIS, BOX, NILE, BEAT, CBOU, ENV, CHKM, GRRF, CHDX, CLNE, COKE, CODI, CPA, DIOD, ESE, ESSX, EZPW, FALC, FC, GCOM, GSS, GCFB, HCKT, HIMX, INFI, IGT, IL, IIN, KW, LGND, LIME, LEDR, MDR, NC, NP, NNI, NCT, OME, ORCC, PAAS, MALL, PRMW, PULS, RAH, MKTG, ROVI, RBCN, SLXP, SGI, SVM, STEC, LVB, STRL, SWS, TTWO, TRNX, PANL, UR, PRTS, VLNC, VIAS, WTW, XRM, HOGS Wednesday, Nov 9, 2011 Before: AH, ARX, AG, AGYS, AMRC, ADY, ASH, BIOC, ABV, CSC, CTCM, DF, AGIT, ENB, ENER, EPM, FSYS, GGP, GM, GEN, GNVC, HDNG, HBC, IAG, JAG, KELYA, KITD, LIZ, M, MFB, NEWT, OMG, PIKE, RL, PSMT, RDNT, ROLL, SODA, SLW, SBLK, STON, SUSS, TKLC, TRGL, UPG, VRML, WEN During: ADK, ELP, CZZ, GGB, GRVY, KCAP After: JOBS, NDN, AXAS, ACAD, AAP, ANW, ARCL, AHT, ATO, BIOF, BPAX, CJES, CDR, CAST, CSCO, COMV, CTWS, CWCO, DVOX, EGAS, ENS, FLT, FTK, GCA, GMCR, GVP, HEK, HEB, JMBA, LGF, LUB, MCZ, MAKO, MNTX, MATR, MBI, MEDH, OMPI, ONVI, OPNT, QUAD, RKT, SSRI, SMT, SMTX, SPAN, SPRD, SVN, SYUT, TTGT, TTEK, TACT, TAT, VGZ, ZN Thursday, Nov 10, 2011 Before: ACM, AMCX, APU, AUQ, AZK, BITA, CAE, CECE, GIB, DSCO, EDGR, EGT, ENG, DEG, FLO, GFN, GFI, HII, INFU, KSS, KLIC, LPTH, MMS, VIVO, NEI, PBH, SFUN, KOS, SPH, ELOS, TNK, THI, UGI, VSCP, WD, During: TCHC, PZG After: SSRX, CRMB, ACTV, AL, ABTL, BONE, BODY, BRKS, BSQR, CVO, HTHT, BORN, COGO, COSI, CPL, CYDE, DAR, HILL, FRF, GNMK, GSB, GSIG, HOKU, HMIN, KTEC, KIOR, MATW, MSCC, MCP, JWN, NTN, NVDA, PSTR, TK, WRLS, TPCG, USHS, DIS, WX Friday, Nov 11, 2011 Before: BAM, DHI, HYGS, TREE During: SDT After: AT, ANCI, TINY

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=