September 30, 2011
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Daily Commentary
MARKET RALLIES AFTER GERMANY ANNOUNCES ITS APPROVAL OF EUROPEAN RESCUE PACKAGE (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.) THURSDAY’S MARKET WRAP-UP Market Snapshot for September 29, 2011 (7:39 pm ET): Closing Prices: DOW 11,153.98 (+143.08, +1.3%),SandP 500 1,160.40 (+9.34, +0.81%), NASDAQ 2,480.76 (-10.82, -0.43%), Nikkei 225 8,701.23 (-, -), DAX 5,639.58 (+61.16, +1.1%), FTSE 5,196.84 (-20.79, -0.4%) OIL 83.00, GOLD 1,624.10, SILVER 30.725 EURO 1.3594, YEN 76.73, BRITISH POUND 1.561, U.S. DOLLAR INDEX 78.605
Daily Channel Continues, Outlook Confirmed
This week has been a difficult one for swingtraders on both the bullish and bearish sides. As we headed into the week, we were looking primarily at daytrades for the least risk. The technicals were pointing in favor of rapid swings back and forth on the 15 minute time frame that would limit follow through from one session to the next and add risk for multi-day holds by increasing odds of getting flushed out of open positions or creating adverse moves that would be enough to at least wreck havoc with one’s nerves! As anticipated, Thursday was just another continuation of this trend. Dow Jones Industrial Average (Figure 1) The market actually opened with strong gains on Thursday following the sharp losses of the previous session. The index futures had crept up throughout the early morning hours with some help from news out of Europe that Germany would stand behind the latest proposed expansion of the European Financial Stability Facility (their version of a bailout plan). The move was strengthened further by unexpected jobs data. The number of individuals filing for first time unemployment benefits fell sharply to 391,000 last week. It was expected that they would fall to 420,000, but that they would not come close to breaking the 400,000 level. Office shutdowns due to recent hurricane activity on the east coast, however, likely contributed to the large reported drop and a more accurate adjustment will likely come over the next several weeks.
SandP 500 (Figure 2)
Index Results
The Dow Jones Industrial Average ($DJI) ended the day on Thursday with a gain of 143.08 points, or 1.3%, and closed at 11,153.98. Twenty-eight of the Dow’s thirty index components posted a gain. The top performers were Travelers (TRV) (+3.16%), Bank of America (BAC) (+3.08%), JP Morgan Chase (JPM) (+3.02%), and Chevron Corp. (CVX) (+2.89%). The only losers were Microsoft (MSFT) (-0.51%) and Intel (INTC) (-0.45%). The SandP 500 ($SPX) finished the session with a gain of 9.34 points, or 0.81%, and closed at 1,160.40. The top percentage gainers in the SandP 500 on Friday were Hartford Financial Svcs Group (HIG) (+8.15%), Genworth Financial Inc. (GNW) (+7.91%), Keycorp (KEY) (+7.60%), and Lennar Corp. (LEN) (+6.91%). The top decliners were Advanced Micro Devices (AMD) (-13.66%), Netflix (NFLX) (-10.97%), and Davita Inc. (DVA) (-8.77%). The Nasdaq Composite ($COMPX) ended the session lower by 10.82 points, or 0.43%, on Thursday and it closed at 2,480.76. The strongest performers in the Nasdaq-100 ($NDX) were Life Technologies Corp. (LIFE) (+3.15%), Qiagen (QGEN) (+2.55%), Sears Holdings Corp. (SHLD) (+2.52%), and Autodesk (ADSK) (+2.06%). The top decliners were Netflix (NFLX) (-10.97%), Sirius XM Radio (SIRI) (-10.24%), Baidu Inc. (BIDU) (-9.17%), and Wynn Resorts (WYNN) (-7.34%). Netflix is expected to face steep competition ahead and it has been under extreme pressure recently. Nasdaq Composite (Figure 3)
FRIDAY’S OUTLOOK
As we head into Friday morning the main premarket data will include August’s personal income and personal spending numbers. The index futures are showing weakness following strong resistance from Thursday’s mid-day trading range, which hit shortly after the closing bell. Since then the market has crept lower and the momentum continues to show weakness. The indices are at lower channel support and are likely to have a difficult time holding this trend into the weekend, but there is little out there at present to suggest much hope for the bulls heading into October. Instead, we are seeing a bearish channel developing on the daily time frame that makes it likely that the market will experience another wave of selling on the weekly charts this fall. Earnings season will also be kicking off shortly and many companies are already beginning to express concern for the recent quarter. Micron Technology (MU) made headlines afterhours with a reported quarterly loss for its fiscal-fourth-quarter of 14 cents a share when analyst were expecting a gain of a penny a share. Revenue was also down, but did come in ahead of estimates.
ECONOMIC REPORTS AND EVENTS THIS WEEK
U.S. Domestic: Eastern Time Zone (GMT -5:00) (New York, Toronto) Sep 29 8:30 AM Initial Claims 09/24 Sep 29 8:30 AM Continuing Claims 09/17 Sep 29 8:30 AM GDP – Third Estimate Q2 Sep 29 8:30 AM GDP Deflator – Third Estimate Q2 Sep 29 10:00 AM Pending Home Sales Jul Sep 30 8:30 AM Personal Income Aug Sep 30 8:30 AM Personal Spending Aug Sep 30 8:30 AM PCE Prices – Core Aug Sep 30 9:45 AM Chicago PMI Sep Sep 30 9:55 AM Michigan Sentiment – Final Sep International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Sep 29 EUR German Consumer Price Index (SEP P)
*** Sep 29 JPY Nomura/JMMA Manufacturing Purchasing Manager Index (SEP) Sep 29 04:30 GBP Net Consumer Credit (AUG) Sep 29 04:30 GBP Net Lending Sec. on Dwellings (AUG) Sep 29 04:30 GBP Mortgage Approvals (AUG) Sep 29 05:00 EUR Euro-Zone Business Climate Indicator (SEP) Sep 29 05:00 EUR Euro-Zone Consumer Confidence (SEP F) Sep 29 05:00 EUR Euro-Zone Economic Confidence (SEP) Sep 29 05:00 EUR Euro-Zone Industrial Confidence (SEP) Sep 29 05:00 EUR Euro-Zone Services Confidence (SEP) Sep 29 08:30 USD Gross Domestic Product (Annualized) (2Q T)
*** Sep 29 08:30 USD Personal Consumption (2Q T)*** Sep 29 08:30 USD Gross Domestic Product Price Index (2Q T)
*** Sep 29 08:30 USD Core Personal Consumption Expenditure (2Q T) Sep 29 10:00 USD Pending Home Sales (AUG) Sep 29 17:45 NZD Building Permits (AUG) Sep 29 19:01 GBP GfK Consumer Confidence Survey (SEP) Sep 29 19:30 JPY Household Spending (AUG) Sep 29 19:30 JPY Jobless Rate (AUG) Sep 29 19:30 JPY National Consumer Price Index (AUG) Sep 29 19:30 JPY National Consumer Price Index Ex-Fresh Food (AUG) Sep 29 19:30 JPY National Consumer Price Index Ex Food, Energy (AUG) Sep 29 19:50 JPY Industrial Production (AUG P) Sep 29 21:00 NZD NBNZ Activity Outlook (SEP) Sep 29 21:00 NZD NBNZ Business Confidence (SEP) Sep 29 21:30 AUD Private Sector Credit (AUG) Sep 30 01:00 JPY Annualized Housing Starts (AUG) Sep 30 01:00 JPY Housing Starts (AUG) Sep 30 05:00 EUR Euro-Zone Consumer Price Index Estimate (SEP) Sep 30 05:00 EUR Euro-Zone Unemployment Rate (AUG) Sep 30 05:30 CHF KOF Swiss Leading Indicator (SEP) Sep 30 08:30 USD Personal Income (AUG) Sep 30 08:30 CAD Gross Domestic Product (JUL) (JUL)*** Sep 30 08:30 USD Personal Spending (AUG) Sep 30 08:30 CAD Gross Domestic Product (JUL)
*** Sep 30 08:30 USD Personal Consumption Expenditure Core (AUG) Sep 30 09:55 USD U. of Michigan Confidence (SEP F)
*** Sep 30 21:00 CNY PMI Manufacturing (SEP)*** *** 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
Thursday, Sep 29, 2011 Before: – During: – After: CAMP, MU Friday, Sep 30, 2011 Before: – During: – After: – Note: Alleconomic 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. © 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=
