October 27, 2011
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Daily Commentary
Market Rallies on EU Hopes (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.) WEDNESDAY’S MARKET WRAP-UP Market Snapshot for October 26, 2011 (5:15 p.m. ET): Closing Prices: DOW 11,869.04 (+162.42, +1.39%), SandP 500 1,242.00 (+12.95, +1.05%), NASDAQ 2,650.67 (+12.25, +0.46%), Nikkei 225 8,748.47 (-, -), DAX 6,016.07 (-30.68, -0.51%), FTSE 5,553.24 (+27.70, +0.5%) OIL 90.97, GOLD 1,723.50, SILVER 33.45 EURO 1.3894, YEN 76.16, BRITISH POUND 1.5968, U.S. DOLLAR INDEX 76.475 EU Fails to Deliver Positive News on Wednesday, but Thursday Brings Hope Despite being in the middle of earnings season, the European Union has taken center stage this week. Wednesday’s highly anticipated meeting of the region’s leaders failed to deliver a comprehensive plan to solve the EU’s financial crisis, which led to another round of strong selling throughout morning trade despite a strong gap higher in anticipation of positive news. This gap came on the heels of the Phoenix pattern we were following in premarket trade, which did offer up buying ahead of the opening bell. A lot of the intraday action was news driven and more so on rumor than fact. After three waves of selling out of the open, the indices finally found support in the late morning heading into 11:00 a.m. ET. This trend exhaustion corresponded to price support with the closure of the Dow Jones Ind. Average’s ($DJI) opening gap.
Mid-day action on Wednesday was full of hesitation. The market pulled off morning lows, but failed to deliver a strong reversal pattern and the pace of the late morning recovery was more gradual than earlier selling, which left the door open for a continuation of that selling into the afternoon. The first attempt to do so came at noon. This was a little early given the extent of the morning decline to offer an strong break to new lows on the day, but it did bring two waves of selling on the 5 minute time frame into 13:00 ET. By 13:30 ET news was once again starting to have an impact. The wires began reporting progress in European talks and the market jumped back to opening price levels and held into the closing bell, although trade was choppy throughout the final two hours of trade. Congestion following the close eventually led to further buying on a 5 minute two-wave continuation pattern that began at approximately 21:30 ET. Further news out of European shored up the breakout and the index futures continued to climb overnight with the financials set to open with the strongest gains. Wednesday and Thursday’s Economic Reports Wednesday’s economic data took a back seat to Europe, but the news was somewhat positive. According to the Commerce Department, durable goods orders showed the largest increase in six months in September. Orders excluding transportation rose 1.7% for the month after a 0.4% slide in August. This was stronger-than-expected. Meanwhile, new home sales were also on the rise, once again after four months of downside. Mortgage applications also rose. The problem, however, was that new home prices fell and builders cut their prices, so the positive data does little to assist with a recovery in the housing market. Early Thursday morning’s GDP report showed a growth of 2.5% annually for the third quarter, according to the Commerce Department’s first quarterly estimate. The rate stood at 1.3% in the last quarter. Jobless claims last week fell 2,000 to 402,000, which was slightly less than the 400,000 anticipated. Pending home sales numbers are due out at 10:00 a.m. ET.
Index Wrap-up
The Dow Jones Industrial Average ($DJI) ended the day on Wednesday with a gain of 162.42 points, or 1.39%, and closed at 11,869.04. Out of the Dow’s thirty index components, twenty-seven posted a gain. The top percentage performers were Boeing (4.46%), Hewlett-Packard (HPQ) (2.79%), and DuPont (DD) (+2.58%). The session’s decliners were Microsoft (MSFT) (-0.82%), Cisco Systems (CSCO) (-0.06%), and 3M (MMM) (-0.03%). The SandP 500 ($SPX) finished the session with a gain of 12.95 points, or 1.05%, and closed at 1,242.00. None of the index’s industry groups managed to end the session with a gain. Top percentage performers in the index were Valero Energy Corp. (VLO) (+15.16%), F5 Networks (FFIV) (+14.08%), Express Scripts SRX) (+13.49%), and Medco Health Solutions (MHS) (+11.06%). Devry Inc. (DV) (-16.75%), Amazon.com (AMZN) (-12.66%), and Bemis Inc. (BMS) (-11.05%). The Nasdaq Composite ($COMPX) ended the session higher by 12.25 points, or 0.46%, on Wednesday and it closed at 2,650.67. The strongest performers in the Nasdaq-100 ($NDX) were F5 Networks (FFIV) (+14.08%), Express Scripts SRX) (+13.49%), and Biogen Inc. (BIIB) (+9.40%). The weakest were Amazon.com (AMZN) (-12.66%), C H Robinson Worldwide Inc. (CHRW) (-8.19%), and Research In Motion (RIMM) (-6.96%). Amazon shares were lower thanks to a weaker-than-anticipated holiday season outlook and slashed price targets from at least eight brokerages. Research In Motion also offered up disappointing news by announcing that it would not be upgrading the software for its PlayBook until February and the new upgrades will not feature the BlackBerry Messenger application. Nasdaq Composite (Figure 3) OUTLOOK The index futures have been steadily pushing higher in premarket trade after European leaders finally announced a deal that would aid Greece’s debt whereby those holding it would accept a 50% loss on holdings of Greek government bonds. Additionally, it outlined a plan to further shore up the private sector and intentions to strengthen the power of the EFSF fund. As trading kicks off on Thursday morning wer should be on the look-out for exhaustion on the upside. The futures have been heading strongly higher since early Wednesday afternoon with only a brief pause afterhours. The extended gains will likely create a choppier intraday session that can make follow-through difficult on the 15 minute time frame. Earnings plays moving out of sync with the overall market will offer the best odds for stronger intraday trend moves.
ECONOMIC REPORTS AND EVENTS THIS WEEK
U.S. Domestic: Eastern Time Zone (GMT -5:00) (New York, Toronto) Oct 26 7:00 AM MBA Mortgage Index 10/22 Oct 26 8:30 AM Durable Orders Sep Oct 26 8:30 AM Durable Orders -ex Transportation Sep Oct 26 10:00 AM New Home Sales Sep Oct 26 10:30 AM Crude Inventories 10/22 Oct 27 8:30 AM Initial Claims 10/22 Oct 27 8:30 AM Continuing Claims 10/15 Oct 27 8:30 AM GDP-Adv. Q3 Oct 27 8:30 AM GDP Deflator Q3 Oct 27 10:00 AM Pending Home Sales Aug Oct 28 8:30 AM Personal Income Sep Oct 28 8:30 AM Personal Spending Sep Oct 28 8:30 AM PCE Prices – Core Sep Oct 28 8:30 AM Employment Cost Index Q3 Oct 28 9:55 AM Michigan Sentiment -Final Oct International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Oct 25 02:00 EUR German GfK Consumer Confidence Survey (NOV) Oct 25 02:00 CHF UBS Consumption Indicator (SEP) Oct 25 04:30 GBP BBA Loans for House Purchase (SEP) Oct 25 04:30 GBP Current Account (2Q) Oct 25 08:30 CAD Retail Sales (AUG) Oct 25 09:00 CAD Bank of Canada Rate Decision (OCT 25)*** Oct 25 10:00 USD Consumer Confidence (OCT)*** Oct 25 10:00 USD House Price Index (AUG) Oct 25 20:00 NZD NBNZ Activity Outlook (OCT) Oct 25 20:00 NZD NBNZ Business Confidence (OCT) Oct 25 20:30 AUD Consumer Prices Index (3Q)*** Oct 25 20:30 AUD Consumer Prices Index RBA Trimmed Mean (3Q)*** Oct 25 20:30 AUD Consumer Prices Index RBA Weighted Median (3Q)*** Oct 26 04:00 EUR ECB Publishes its Bank Lending Survey*** Oct 26 08:30 USD Durable Goods Orders (SEP)*** Oct 26 08:30 USD Durables Ex Transportation (SEP) Oct 26 10:00 USD New Home Sales (SEP) Oct 26 10:30 CAD Monetary Policy Report*** Oct 26 16:00 NZD Reserve Bank of New Zealand Rate Decision (OCT 27)*** Oct 26 17:45 NZD Trade Balance (SEP) Oct 26 17:45 NZD Balance (YTD) (SEP) Oct 26 19:50 JPY Retail Trade (SEP) Oct 26 19:50 JPY Large Retailers’ Sales (SEP) Oct 26 22:00 CNY Industrial Profits YTD (SEP) Oct 27 JPY Bank of Japan Rate Decision (OCT 27)*** Oct 27 EUR German Retail Sales (SEP) Oct 27 05:00 EUR Euro-Zone Business Climate Indicator (OCT) Oct 27 06:00 GBP CBI Reported Sales (OCT) Oct 27 08:30 USD Gross Domestic Product (Annualized) (3Q A)*** Oct 27 08:30 USD Personal Consumption (3Q A) Oct 27 08:30 USD Gross Domestic Product Price Index (3Q A)*** Oct 27 08:30 USD Core Personal Consumption Expenditure (3Q A) Oct 27 10:00 USD Pending Home Sales (SEP) Oct 27 19:01 GBP GfK Consumer Confidence Survey (OCT) Oct 27 19:30 JPY Household Spending (SEP) Oct 27 19:30 JPY Jobless Rate (SEP) Oct 27 19:30 JPY National Consumer Price Index (SEP) Oct 27 19:30 JPY National Consumer Price Index Ex-Fresh Food (SEP) Oct 27 19:30 JPY National Consumer Price Index Ex Food, Energy (SEP) Oct 27 19:50 JPY Industrial Production (SEP P) Oct 28 EUR German Consumer Price Index (OCT P) Oct 28 EUR German Consumer Price Index – EU Harmonised (OCT P) Oct 28 05:30 CHF KOF Swiss Leading Indicator (OCT) Oct 28 08:30 USD Personal Income (SEP) Oct 28 08:30 USD Personal Spending (SEP) Oct 28 08:30 USD Personal Consumption Expenditure Deflator (SEP) Oct 28 08:30 USD Personal Consumption Expenditure Core (SEP) Oct 28 09:55 USD U. of Michigan Confidence (OCT F)*** *** 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 24, 2011 Before: BOH, BMRC, CAT, ETN, IVZ, KMB, LO, PCH, RDCM, RSH, ROP, STBA, BSRR, SILC, VFC During: – After: FUBC, AAN, ADVS, ALB, AMGN, ANEN, BXS, CSBC, CFX, CTGX, CR, CYBE, EGBN, FDEF, FIBK, FTNT, HBHC, HMA, HSTM, HWAY, HTLF, HLX, HXL, HUBG, ININ, KALU, MAS, NARA, NFLX, OMI, PCL, PLXT, RGA, RCII, RUSHA, RUSHB, SQNS, STAA, SFG, STSA, STM, TXN, TUES, UCTT, UIS, USTR, VECO, VLTR, WASH, WPP, WSH, ZION Tuesday, Oct 25, 2011 Before: MMM, AMG, AGCO, AKS, AME, AXE, AIT, ARB, ARMH, ASTE, AUO, ALV, BP, CP, CAJ, CPLA, CSL, CRS, CE, CNC, CLFC, CRDN, CHFC, CIT, COLM, CMI, CYNO, DB, DORM, DD, ECL, GPI, HSII, HBCP, IIVI, ITW, IMN, IRM, JRN, LCAV, LII, LXK, LRY, MHP, MOLX, NOV, NVS, NUS, ODP, OCR, OFG, PCAR, BTU, PVTB, DGX, RYN, RF, RAI, RNOW, R, SHW, SIAL, SPG, SAH, SUI, TROW, XRS, AMTD, TECH, TFX, TLAB, TNC, TWIN, UBS, UA, UBSI, UPS, X, VIST, GRA, WAB, WDR, WAT, WFT, WIBC, XRX During: FRME, QCOR After: ABAX, AKR, ACE, ACPW, ATRM, ARE, AFOP, AMZN, ACC, AGNC, AFG, AMSG, ACGL, AJG, ACLS, BGS, BCDS, BHLB, BPFH, BXP, BBNK, BRCM, CHRW, BCR, CBT, CNI, CENX, CHE, CBI, CBU, CPTS, CNO, CCI, CTS, DDIC, DFG, DV, DMRC, DHT, DWA, EHTH, EXAR, EXM, ESRX, FFIV, FBC, FTI, HTS, HGSI, BIN, ILMN, INSU, IRBT, KONA, LPS, LIFE, LNET, MTW, MASI, MTSN, MCK, MRCY, MMSI, MSL, MOH, NBR, PNRA, PVR, PVSW, QEP, KWR, STR, QDEL, RPT, RRC, RA, RFMD, SBX, SIMG, SONO, SXL, SMCI, SUPX, SKT, TSS, TRN, TRMK, ULTI, USNA, VASC, VICR, VOCS, WBSN, WSBC, WU, WTFC, ZIXI Wednesday, Oct 26, 2011 Before: ABD, ACXM, ATI, AGN, AB, AEP, ANAD, ARW, ABG, ADP, AVY, AVX, BEAV, BMS, BA, EAT, BKI, CBZ, CETV, COP, GLW, CFR, DPS, EEFT, EXC, FISI, FMBI, FSRV, F, GD, HES, HSP, HCBK, HVB, INOD, SNAK, ITRI, JBLU, JNY, KVHI, LAD, LMT, LPLA, MPX, MKTX, MWV, MHS, MDCO, MDP, MSM, MYL, NDAQ, NOC, NWE, OC, PNR, POL, PX, PLD, RDWR, ROL, RES, RUTH, SFE, SAIA, SAP, SCG, SEE, SLGN, SLAB, SO, SPAR, SPNC, S, SSYS, TMO, TOBC, TUP, UMBF, UMC, USAP, VCI, VSI, WLP, WYN During: BOKF, ENI, FFNW, GCBC, PEBK After: SHLM, ATX, AFL, AEM, AKAM, ALGT, EPAX, ARII, AMP, AP, ACOM, ATR, AIZ, AXTI, BYI, BMC, BDN, CA, COG, CDNS, CWT, CGI, CHH, CHDN, CVGI, CYH, CMP, CMRE, CSGP, PROJ, DEL, DGLY, DRE, DXPE, EDAC, EDMC, ESIO, EGN, ENTG, EFX, EQIX, EQR, RE, DAVE, FCBC, FXCB, GG, GGG, GPRE, HGR, HRS, HRC, IBKC, ICAD, ISSI, ISH, ISIL, ITC, JAH, KBR, KEX, KNX, LOGI, LOGM, LOOP, LSI, MLNX, MX, MRH, MORN, NANX, NATI, NSC, NVLS, ORLY, OII, OSBC, OTEX, TIS, OI, PMTC, PLXS, PZN, RYL, SIGI, SFLY, SJW, SLG, SOA, STNR, SRCL, SFSF, SPN, SUSQ, SYMC, SYA, SYMM, TCLP, TER, TEX, TMK, TRH, TQNT, TBI, TYL, UAM, USMO, V, WRB Thursday, Oct 27, 2011 Before: FLWS, ABB, ACIW, AET, ARG, AIXG, ASPS, AGEN, AEGR, ACAT, ART, AZN, AVT, AVP, BLL, ABX, BDC, BHE, BGCP, BMY, BC, BG, CAB, CCMP, CAM, CRR, CAH, CDI, CELG, CVE, CEVA, CHG, GTLS, CTXS, CWEI, CLW, CMS, CNH, CCE, CL, CLP, COLB, CNMD, CNX, CPO, OFC, CRAI, CRY, DAN, DLX, XRAY, DBD, DLR, UFS, DGICA, DOW, DSPG, EXP, ELNK, ELN, EME, ENDP, EXXI, EFSC, EQT, XOM, FBRC, FDML, FOE, FAF, FCF, FORR, BEN, GOLF, GR, GTI, GPX, HSC, HHS, HPY, HSY, HEP, ICLR, INCY, IP, IVC, JCI, KEM, KMT, LLL, LAZ, LM, LBY, LECO, LINE, LKQX, LYTS, LL, CLI, MGLN, MF, MTRN, MJN, MTH, MSA, MOD, MGI, MWW, MCO, MSI, BABY, NCI, NXY, NLSN, NIHD, OXY, OMX, ODFL, ORI, PACR, PMTI, PEI, PRGO, PFCB, PNK, POT, PCP, PG, PSSI, PHM, PMT, QSII, RVSN, RTN, O, RS, REV, DDD, SIX, SWI, SAVE, HOT, STEL, STC, SRI, SURW, SNV, TCK, TDY, THRD, BCO, TWC, TKR, TWI, BZC, UCBI, VLY, VDSI, VMED, WBC, WM, WMAR, WEST, WEC, WRLD, XEL, YNDX, ZMH During: CHU, ICA, GRC, NVO, LCC After:AMD, ALGN, AMCC, ARBA, AHL, AVID, BIDU, RATE, BMRN, CELL, BMTC, CAP, ELY, CALD, CSE, CFK, CERN, CINF, CRBC, CLF, CLD, CSTR, CPSI, CTCT, CROX, CW, CYTK, DECK, DLA, DDR, DLLR, DRIV, DCOM, DNB, EMN, EDR, ERTS, ECHO, ELX, ENH, EPIQ, EXPE, EXR, FII, FEIC, FFCH, FPO, FLS, FFIC, FORM, GCAP, GILD, GBCI, GRT, GB, GDOT, GSIT, GIFI, HLIT, HLS, HEOP, HIW, AWAY, IKAN, IMGN, IBA, IM, INAP, INPH, ISBC, ITI, JDAS, KEG, KLAC, LEG, LMAT, MET, MCRL, MCRS, MTX, MIPS, MPWR, MMI, NANO, NCR, UEPS, NTGR, NR, NST, NUVA, OLN, ASGN, OFIX, PEB, PMCS, PWER, PFG, QLIK, QLGC, QTM, RSYS, RGC, RVSB, SCSC, SENEA, SHOR, SSD, SONS, SWN, CODE, SPSC, STMP, SPF, STRT, SPRT, TSYS, TNAV, EDE, THRX, TORM, UHS, VR, VAR, WOOF, VRSN, VRTX, VPFG, VPRT, WBCO, WRE Friday, Oct 28, 2011 Before: AHGP, ARLP, AXL, AGP, AIV, ACI, ABFS, B, BIIB, BWA, CVC, CPN, CVX, KOF, CMCO, CMC, CEG, CVH, D, EBTX, FMX, GHM, HFWA, HMSY, IPG, LEA, LPNT, MRK, NPBC, NWL, NEM, NS, NSH, OB, OPY, PPC, PFS, RAS, COL, SCBT, SHPGY, SR, TEN, GT, TAC, WTBA, WCBO, WY During: UBCP After: BVN, EEQ, EEP
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. (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=
