Employment Data Takes Center Stage – Daily market commentary by Toni Hansen

November 4, 2011

An online version of this newsletter is available at http://www.tonihansen.com/Newsletters/current.html.

Daily Commentary

Employment Data to Lead Market (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 November 3, 2011 (4:22 a.m. ET): Closing Prices: DOW 12,044.47 (+208.43, +1.76%), SandP 500 1,261.15 (+23.25, +1.88%), NASDAQ 2,697.97 (+57.99, +2.2%), Nikkei 225 8,640.42 (-195.10, -2.21), DAX 6,133.18 (+167.55, +2.81%), FTSE 5,545.64 (+61.54, +1.12%) OIL 94.03, GOLD 1,764.20, SILVER 34.51 EURO 1.3812,YEN 78.10, BRITISH POUND 1.6035, U.S. DOLLAR INDEX 76.935 ECB Rallies Market This week started off on a sour note with the Dow down over 500 points in just two days, but 20-day moving averages held as support heading into the end of the day on Tuesday and the market received a boost early Thursday morning following the European Central Bank’s decision to cut its interest rates by a quarter of a percentage point, making it the first rate cut by the bank in two years. This move overshadowed continued concerns out of Greece on a potential debt default despite recent bailout plans that included cutting its debt by 50%. Thursday’s session began with a strong upside gap following the ECB’s announcement, but the gains were eroded quickly out of the gate. This kicked off the period of choppier trade I was anticipating heading into the day, but the market managed to strengthen mid-day after closing the opening gap. The indices pivoted off low with a V formation on the 5 minute time frame and then formed a base along higher, thus shifting the intraday momentum once again to favor the bulls. Two more waves of buying followed on the 5 minute charts into the close, although each wave was more gradual than the initial move off 10:00 a.m. ET lows.

Data Wrap

In economic news, weekly jobless claims fell below 400,000 with a drop of 9,000 to a seasonally adjusted 398,000 on first-time filings for unemployment. This was slightly more than anticipated, but had little impact upon price action in the market. Later, the Institute for Supply Management released its October non-manufacturing index. It was expected to come in at 53.5, but pulled back to 52.9 instead. September’s reading was 53.0. The Commerce Department also released its factory orders for September, which were expected to have fallen 0.1%, but came in better-than-expected with an increase of 0.3%. August’s previously reported drop of 0.2% was also upwardly revised to show an increase of 0.1%. SandP 500 (Figure 2) Index Wrap-up The Dow Jones Industrial Average ($DJI) ended the day on Thursday with a gain of 208.43 points, or 1.76%, and closed at 12,044.47. All of the Dow’s index’s thirty components posted a gain.

The top performers were Hewlett-Packard (HPQ) (+3.59%), Kraft Foods (KFT) (+3.29%), Bank of America (BAC) (+2.83%), and Disney (DIS) (+2.82%). The weakest were McDonalds (MCD) (+0.51%) and Procter and Gamble (PG) (+0.56%). The SandP 500 ($SPX) finished the session with a gain of 23.25 points, or 1.88%, and closed at 1,261.15. Top performing industry groups were energy (+2.5%), industrials (+2.5%), and technology (+2.5%). The strongest individual percentage performers were Estee Lauder (EL) (+17.94%), Alpha Natural Resources (ANR) (+13.29%), Netflix (NFLX) (+10.67%), and Micron Tech. (MU) (+7.55%). ANR was a top energy performer thanks to an unexpected upgrade following better-than-anticipated quarterly results. EL’s gains were also thanks to earnings. All of the SandP’s industry groups were up more than 1%, but the weakest percentage performers were Abercrombie and Fitch (ANF) (-19.93%), MEMC Electronic Materials (WFR) (-11.76%), and Kellogg Co. (K) (-7.64%). The Nasdaq Composite ($COMPX) ended the session higher by 57.99 points, or 2.2%, on Thursday and it closed at 2,697.97. The top index components in the Nasdaq-100 ($NDX) were Netflix (NFLX) (+10.67%), Green Mountain Coffee (GMCR) (+8.48%), Micron Tech. (MU) (+7.55%), and Qualcomm (QCOM) (+7.53%). The weakest were Whole Foods (WFM) (-2.00%), and Sirius XM Radio (SIRI) (-1.79%), and Alexion Pharmaceuticals (ALXN) (-1.38%). Nasdaq Composite (Figure 3) Employment Data Set to Grab Headlines The market closed just shy of the day’s highs on Thursday and continued to hold this resistance level afterhours despite the slowdown in the trend as it hit. The G20 is wrapping up a two-day meeting in Cannes today, but the index futures have had little reaction overnight. The market is trading near Thursday’s close in early pre-market trade. Nevertheless, there will be plenty of news to still break the range prior to the open once October’s employment data comes out at 8:30 a.m. ET. The technical bias for the market is fairly wide open ahead of the data. Neither the bulls nor the bears have an overwhelming pull ahead of the announcement, so use caution positioning ahead of the news.

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 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, 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.

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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=