October 31, 2011
An online version of this newsletter is available at http://www.tonihansen.com/Newsletters/current.html.
DAILY COMMENTARY
Market Remains in Corrective Mode (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 October 31, 2011 (12:30 a.m. ET): Closing Prices: DOW 12,231.11 (+22.56, +0.18%), SandP 500 1,285.09 (+0.50, +0.04%), NASDAQ 2,727.15 (-1.48, -0.05%), Nikkei 225 9,038.56 (-11.91, -0.13), DAX 6,346.19 (+8.35, +0.13%), FTSE 5,702.24 (-11.58, -0.2%) OIL 92.53, GOLD 1,721.20, SILVER 34.49 EURO 1.3999, YEN 79.17, BRITISH POUND 1.5978, U.S. DOLLAR INDEX 76.345 Market Takes Pause Ahead of the Weekend Friday was a slow day for the markets. After strong upside into Thursday afternoon, the indices were once again hitting intraday resistance ahead of the closing bell and were falling into corrective mode. Daily resistance from prior highs and congestion this summer also gave the markets reason to pause. Hope for a solution to the European Union’s debt crisis fueled the rally on Thursday, but detailed plans on how such a solution will be implemented remain allusive. Although we are in the midst of earnings season, eyes will remain on Europe with the leaders of meeting at the G-20 summit in Cannes from November 3-4. The European Central Bank’s interest rate announcement will also be out this week on Thursday, while our own FOMC rate decision will be out on Wednesday following a two-day Fed meeting.
Friday’s Economic Reports Personal income in September was virtually unchanged with a gain of only 0.1%. Consumer spending, however, was up 0.6%. This was also reflected in a higher consumer sentiment reading released later in the morning that howed that October’s consumer sentiment index rose more than anticipated to a reading of 60.9. Nevertheless, the market had little reaction to the news.
INDEX WRAP-UP
The Dow Jones Industrial Average ($DJI) ended the day on Friday with a gain of 22.57 points, or 0.18%, and closed at 12,231.11. This mixed session left the gainers only slightly better than on par with the losers in the index. The top performers were Hewlett-Packard (HPQ) (+3.52%), Merck (MRK) (+2.33%), Alcoa (AA) (+2.03%), and Bank of America (BAC) (+1.94%). The weakest index components were Home Depot (HD) (-2.96%) and WalMart (WMT) (-1.14%). The index ended the week higher by 3.58%. The SandP 500 ($SPX) finished the session with a gain of 0.50 points, or 0.04%, and closed at 1,285.09. One of the strongest of the index’s industry groups was technology. The strongest individual percentage performers were Monster Worldwide (MWW) (+11.66%), United States Steel Corp. (X) (+11.57%), Interpublic Group (IPG) (+11.21%), and Newell Rubbermaid (NWL) (+11.14%). The weakest were Whirlpool Corp. (WHR) (-14.34%), Cablevision Sys. Corp. (CVC) (-12.54%), and MetroPCS Communications (PCS) (-8.12%). The index ended the week higher by 3.78%. The Nasdaq Composite ($COMPX) ended the session lower by 1.48 points, or 0.05%, on Friday and it closed at 2,737.15. The strongest performers in the Nasdaq-100 ($NDX) were Green Mountain Coffee (GMCR) (+8.48%), Amazon.com (AMZN) (+5.10%), and Baidu (BIDU) (+4.50%). The weakest performers were Expedia Inc. (EXPE) (-6.22%), Virgin Media (VMED) (-4.99%), and Stericycle Inc. (SRCL) (-4.60%). The Nasdaq Composite ($COMPX) ended the week higher by 3.78%).
OUTLOOK
From an economic standpoint, this week is going to be a busy one for the markets. On top of the G-20 and interest rate decisions, are the latest reports on employment in the U.S. October’s nonfarm payrolls are due out on Friday, along with October’s average workweek, hourly earnings, and unemployment rate. Additionally, this is the final “big week” for third-quarter earning reports. Top names reporting this week include Humana (HUM) on Monday; Baker Hughes (BHI) and Pfizer (PFE) on Tuesday; Kraft Foods (KFT), MasterCard (MA), Qualcomm (QCOM), and Transocean (RIG) on Wednesday; and American Intl. Group (AIG), Cigna (CI), and Starbucks (SBUX) on Thursday. So far this quarter 71% of the earnings reports that have been released have topped Wall Street estimates, primarily due to growth outside of Europe and the United States. As we head into Monday morning, the market remains in correction mode. The index futures have pulled back steadily since their open Sunday evening. The 30-minute 200 period moving average has been serving as a support zone for the latest uptrend, but has not yet hit on this most recent correction. This leaves it some more room ahead of the open and even early in the day to continue to pullback, but the market lacks a strong technical setup for new positions on the 15-minute time frame. As on Friday, it’s going to be the 5 minute charts that lead and small shifts in momentum on this level will be key for intraday action. The 15 minute charts are most suggestive of further downside, but so far the series of slightly lower lows on the 5 minute time frame are indicating hesitation. My personal focus heading into the week will be on earnings plays and gaps since these will have more decisive intraday action that will not rely as heavily upon overall market participation to show strong follow-through.
ECONOMIC REPORTS AND EVENTS THIS WEEK
Oct 31 9:45 AM Chicago PMI Oct Nov 1 10:00 AM ISM Index Oct Nov 1 10:00 AM Construction Spending Sep Nov 1 3:00 PM Auto Sales Nov Nov 1 3:00 PM Truck Sales Nov Nov 2 7:00 AM MBA Mortgage Index 10/29 Nov 2 7:30 AM Challenger Job Cuts Oct Nov 2 8:15 AM ADP Employment Change Oct Nov 2 10:30 AM Crude Inventories 10/29 Nov 2 12:30 PM FOMC Rate Decision Nov Nov 3 8:30 AM Initial Claims 10/29 Nov 3 8:30 AM Continuing Claims 10/22 Nov 3 8:30 AM Productivity-Prel Q3 Nov 3 8:30 AM Unit Labor Costs -Prel Q3 Nov 3 10:00 AM Factory Orders Sep Nov 3 10:00 AM ISM Services Oct Nov 4 8:30 AM Nonfarm Payrolls Oct Nov 4 8:30 AM Nonfarm Private Payrolls Oct Nov 4 8:30 AM Unemployment Rate Oct Nov 4 8:30 AM Hourly Earnings Oct Nov 4 8:30 AM Average Workweek Oct International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Oct 30 GBP Nationwide House Prices n.s.a. (OCT) Oct 30 19:15 JPY Nomura/JMMA Manufacturing Purchasing Manager Index (OCT) Oct 30 20:30 AUD Private Sector Credit (SEP) Oct 31 01:00 JPY Annualized Housing Starts (SEP) Oct 31 01:00 JPY Housing Starts (SEP) Oct 31 05:30 GBP Net Consumer Credit (SEP) Oct 31 05:30 GBP Net Lending Sec. on Dwellings (SEP) Oct 31 05:30 GBP Mortgage Approvals (SEP) Oct 31 06:00 EUR Euro-Zone Consumer Price Index Estimate (OCT) Oct 31 06:00 EUR Euro-Zone Unemployment Rate (SEP) Oct 31 08:30 CAD Gross Domestic Product (AUG)*** Oct 31 17:45 NZD Average Hourly Earnings (3Q) Oct 31 18:30 AUD AiG Performance of Manufacturing Index (OCT) Oct 31 20:30 AUD House Price Index (3Q) Oct 31 21:00 CNY PMI Manufacturing (OCT)*** Oct 31 21:30 JPY Labor Cash Earnings (SEP) Oct 31 23:30 AUD Reserve Bank of Australia Rate Decision (NOV 1)*** Nov 1 04:15 CHF Retail Sales (Real) (SEP) Nov 1 04:30 CHF SVME-Purchasing Managers Index (OCT) Nov 1 04:55 EUR German Purchasing Manager Index Manufacturing (OCT F) Nov 1 05:00 EUR Euro-Zone Purchasing Manager Index Manufacturing (OCT F) Nov 1 05:30 GBP Purchasing Manager Index Manufacturing (OCT) Nov 1 05:30 GBP Gross Domestic Product (3Q A)*** Nov 1 10:00 USD Construction Spending (SEP) Nov 1 10:00 USD ISM Manufacturing (OCT) Nov 1 10:00 USD ISM Prices Paid (OCT) Nov 1 20:00 AUD HIA New Home Sales (SEP) Nov 2 04:55 EUR German Unemployment Change (OCT)*** Nov 2 04:55 EUR German Unemployment Rate s.a. (OCT) Nov 2 05:30 GBP Purchasing Manager Index Construction (OCT) Nov 2 08:15 USD ADP Employment Change (OCT) Nov 2 12:30 USD Federal Open Market Committee Rate Decision (NOV 2)*** Nov 2 14:15 USD Bernanke Speaks at Fed Press Conference*** Nov 2 17:45 NZD Unemployment Rate (3Q) Nov 2 17:45 NZD Employment Change (3Q) Nov 2 18:30 AUD AiG Performance of Service Index (OCT) Nov 2 20:30 AUD Retail Sales s.a. (SEP) Nov 2 20:30 AUD Retail Sales Ex Inflation (3Q) Nov 2 21:00 CNY China Non-manufacturing PMI (OCT) Nov 3 03:55 EUR German Purchasing Manager Index Services (OCT F) Nov 3 05:00 EUR Euro-Zone Purchasing Manager Index Composite (OCT F) Nov 3 05:00 EUR Euro-Zone Purchasing Manager Index Services (OCT F) Nov 3 05:30 GBP Purchasing Manager Index Services (OCT) Nov 3 08:45 EUR European Central Bank Rate Decision (NOV 3)*** Nov 3 10:00 USD ISM Non-Manufacturing Composite (OCT) Nov 3 10:00 USD Factory Orders (SEP) Nov 4 USD ICSC Chain Store Sales (OCT) Nov 4 06:00 EUR Euro-Zone Producer Price Index (SEP) Nov 4 06:00 EUR German Factory Orders s.a. (SEP) Nov 4 07:00 CAD Unemployment Rate (OCT)*** Nov 4 07:00 CAD Net Change in Employment (OCT)*** Nov 4 07:00 CAD Full Time Employment Change (OCT) Nov 4 07:00 CAD Part Time Employment Change (OCT) Nov 4 07:00 CAD Participation Rate (OCT) Nov 4 08:30 USD Change in Non-farm Payrolls (OCT)*** Nov 4 08:30 USD Change in Private Payrolls (OCT) Nov 4 08:30 USD Change in Manufacturing Payrolls (OCT) Nov 4 08:30 USD Unemployment Rate (OCT)*** Nov 4 08:30 USD Average Hourly Earnings (OCT) Nov 4 08:30 USD Average Weekly Hours All Employees (OCT) Nov 4 10:00 CAD Ivey Purchasing Managers Index s.a. (OCT) *** 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, Oct 31, 2011 Before: ABH, AWI, AUXL, BWP, CPLP, CFFN, CYOU, CKSW, CNA, CTB, CVTI, HAE, HMY, HCP, HMC, HUM, IDSY, IBCP, IART, L, MCY, NTE, ONB, PCRX, SHAW, SOHU, TGE, TREX, UDR, UDRL, VTNC, WIT During: CLBH, HFBC, RCKB After: ACUR, ALL, ANAT, APC, ARRY, ASIA, ASTX, APL, AVB, CCO, CRK, EXBD, UAN, ERT, KEYW, FMC, FST, GEOY, GTY, GLRE, HGIC, HLF, HFFC, HF, IDTI, IVAC, KRA, LEAP, MPG, MDU, MIG, NAVR, PRXL, PRE, PPS, PSB, RTEC, SKH, SM, TGI, VOLC, WTI, WINN Tuesday, Nov 1, 2011 Before: CAS, ALLT, AIMC, AMED, AMT, ABC, AFSI, ADM, ATRC, AUDC, BHI, BPI, CHTR, CKP, CBR, CIE, CVLT, COCO, DTG, DUF, EMR, ETR, EXPD, FSS, FCH, FIS, FE, RAIL, FDP, GKSR, IT, GET, GNRC, BGC, GWR, GLT, GOV, GLDD, HPOL, HCA, HW, HS, HSIC, HHGP, GMO, IPXL, IPGP, KFFG, KBALB, FSTR, MAC, MSO, MD, TYPE, NSP, NNBR, NMR, NVMI, NXPI, OHI, OSK, OSG, PGC, PFE, PNW, PEG, RDN, RIGL, RBA, RDC, RTI, SIRI, STFC, SHOO, THC, TRP, TRI, ECOL, VLO, VHS, VSH, VPG, WPI, WLK During: HIT, MRO After: BIRT, AEIS, ALNY, ATEC, ALTE, AHC, ACAS, AMSF, AMRS, AZPN, AACC, ATML, AXS, BALT, BDX, BGFV, BIO, BBOX, BLKB, SAM, BRE, BTUI, DVR, CT, CSCD, CHSI, CBL, CERS, CF, CRL, CHMT, CHSP, CDXS, CGNX, CCUR, CVG, CCG, PRI, CACC, CSGS, DCT, DENN, DGI, DISCA, DEI, DFT, BOOM, DRCO, DX, EOG, EXAC, XCO, FISV, FURX, GSX, GNK, GHDX, GEVO, GA, GIVN, GOOD, GUID, HAIN, HCC, HR, HTZ, HTCO, ONE, HTCH, ICFI, IOSP, ISTA, JKHY, JAZZ, JBT, JDSU, KNXA, KTCC, KFRC, KRC, LF, LMNX, MANT, MXL, MRGE, MBLX, MSPD, MWA, MYGN, NLC, NATL, NRCI, NEU, NVTL, OKE, OKS, OPEN, OPXT, PZZA, PEET, PSEM, PHH, PXD, PSE, PBI, PLT, PWAV, QLTY, RLOC, RNR, REXX, SBAC, SIMO, SLRC, SLTM, FIRE, SGY, SUNH, SUNS, SNCR, TLEO, TRGT, TMH, TE, TXRH, TCRD, THOR, TNS, TSON, TXCC, TRMB, TRLG, UNM, VRSK, WES, WEYS, WMB, WPZ, INT, WMGI, XL, ZIPR Wednesday, Nov 2, 2011 Before: ACOR, AGL, ALE, ALVR, AOL, WTR, AVEO, AVA, FLY, BCRX, CLMT, CNP, CLH, CLX, CTSH, CMCSA, CWH, CTCH, EPB, COT, DVN, DHX, DM, DW, DST, DNKN, EDGW, EIX, EP, EE, EPD, EZCH, FOR, FELE, FCN, FNDT, GRMN, WOLF, GPOR, HNT, HGG, HSNI, HUN, SPMD, ICE, KUB, LVLT, LINC, MMP, MMC, MA, MDCI, TAP, MSCI, NEWS, NOR, DCM, NVE, OIIM, OZM, PRX, PSTB, PAG, H, RELV, RTLX, RRD, SBGI, SNE, TRK, SPW, SXC, STE, TLM, TX, TEVA, TDW, TWX, GTS, TRW, UNT, VG, WCG, WXS During: AIRT, BCPC, END After: ABCO, AFFX, AIN, ALTH, AOSL, AEL, ARC, ASI, AWK, ANIK, AREX, ATNI, AVNW, BLDP, BMR, BBRG, CACI, CPE, CSU, CSII, CAR, CBEY, CTL, CLWR, COHR, CIX, SCOR, CXO, CLR, CLGX, CVI, CUZ, CVD, CCRN, DK, DXCM, ELLI, EIG, EXK, ETE, ETP, EPR, DNDN, EQY, ESS, EXL, EXTR, FICO, FWLT, FBN, FIO, GPRO, GNCMA, GMR, GGC, ROCK, GAIN, GMXR, GDP, GVA, HBI, THG, HIG, HT, HBM, HURN, ISIG, TEG, INTT, IPI, IXYS, JCOM, JLL, KAMN, KS, KAR, KMPR, KIM, KND, KGC, KRG, KFT, LGCY, LHCG, LBTYA, LNC, LTC, MIC, MHLD, MMUS, MCHX, MEAS, TST, MNDO, MUR, NSPH, NRP, NQ, NWSA, NTRI, ONNN, ONXX, OSUR, OEH, OESX, ORA, PVA, PNG, PGTI, PAA, PPO, PRA, PL, PRSC, PRU, QGEN, QCOM, RLD, RSO, RRTS, SHS, BFS, SWM, SGMS, SWIR, SMSI, SSS, STAN, STRI, TTEC, TSLA, TSO, TPGI, THQI, RIG, TCAP, TTMI, UNTD, VCLK, VRTU, VMC, WLT, WTS, WBMD, WEBM, WLL, WFM, XNPT, AUY, ZIP Thursday, Nov 3, 2011 Before: ABMD, ABVT, AGU, ALX, LNT, ATK, ANR, APO, ASCA, ANSS, APA, MT, ARIA, AAWW, BWINB, BCE, BEAM, BLC, BBG, BKCC, BAH, BR, CAMT, CNQ, LSE, FUN, CI, XEC, CBB, CIR, CNL, CCOI, CNSL, CNVO, COR, CRWN, CVS, DNR, DEXO, DIN, DBLE, DRQ, DUK, EK, EGO, RDEN, ELT, ENP, ENR, NPO, ESV, EL, EXAS, FUR, FIG, FTR, FSIN, GKNT, GTIV, GLP, GBX, HEES, HE, HCN, HOS, IACI, IDA, IND, IRC, INMD, IDN, ICGE, IVR, ITG, KSWS, K, KOP, KRO, LAMR, LNCE, LXP, TVL, LFUS, MDC, TUC, MGA, MFC, HZO, MEA, MGM, MINI, MOCO, MNTG, NICE, NKA, NRF, NPSP, NRG, NXTM, NYX, CHUX, OGE, OWW, ORN, OXF, PKD, PRFT, PETD, PQ, PCG, PNCL, PDC, PNM, POR, POZN, PPL, PDII, PGN, PSA, QCCO, ROIC, RGLD, SLE, SVNT, SNI, SRE, SMBL, SOMX, SE, SEP, SPR, STRA, SU, SFY, SXCI, SNTA, TEL, TS, TDC, TOWR, USPH, ULBI, VC, WNR, WWE, XRIT During: AMOT, CIB, BAP, DTV, SGA After: ACET, ADUS, ADEP, ALIM, ALKS, AWH, MDRX, ALJ, AIG, AHS, AINV, ARSD, ARI, AGII, AUTH, AVII, BEBE, WIFI, BPZ, CADX, CLMS, CPT, CSV, CBOE, CBS, LYV, CEC, CQB, CIA, CSA, CCIX, FIX, CNW, CPNO, CUBE, CPIX, CYTX, DVA, DGII, HIL, EROC, EIHI, ELON, BAGL, EBS, ESC, ERII, EVC, ENTR, ERIE, EXAM, FFG, FRT, FSR, FLR, GST, GNW, GERN, GLUU, GXP, HTGC, HME, IMMR, SAAS, IN, III, INWK, IRF, IILG, IRIS, JJSF, KEYN, KFN, KOG, KTOS, LNKD, MAIN, MTZ, MXWL, MGRC, MDAS, MTD, MCHP, MAA, MHK, MOSY, MOVE, MFLX, NCMI, NFG, NAVG, N, EGOV, OCLS, OIS, OGXI, OPWV, OTTR, OUTD, PCCC, PKI, PMC, PLNR, POWI, POWR, PRO, QSFT, RNWK, RLH, RRGB, REG, RENT, ROCM, RST, RDK, SALM, SD, SAPE, SCIL, SQI, SGEN, SEM, SQNM, SKUL, SWKS, SRSL, SBUX, SUN, SPWRA, TECUA, TSRA, THLD, TRID, TPC, UIL, UEIC, VVC, VNO, WRC, WWWW, WR, XOXO Friday, Nov 4, 2011 Before: AES, ALU, AEE, ALC, BWEN, BIP, BPO, BPL, CEDC, XTXI, XTEX, DRAD, DXYN, G, GTN, GTXI, ZINC, IGTE, INHX, IBI, KKR, MSG, NPTN, NEE, NWN, ZEUS, POM, PXP, RSTI, STWD, TTI, THS, UPL, GROW, VNDA, VTR, WCRX, WPO, WIN, YRCW During: NWLI After: ATAI, COWN, NU 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=
