January 2, 2011 HOME EDUCATIONAL PRODUCTS CONTACT TONI An online version of this newsletter is available at http://www.tonihansen.com/Newsletters/current.html. FREE TRADING COURSE Good day! I’d like to invite you to check out a free trading course put together by former floor trader Adam Hewison. In it he covers: (1) The importance of psychology in price movement (2) How to spot mega trends (3) Understanding of technical price objectives (4) How to picture price objectives (5) How to trade with moving averages (6) How to use point and figure trading techniques (7) How to use the RSI indicator (8) How to correctly use stochastics in your trading (9) How to use the ADX indicator to capture trends (10) How to capitalize on natural market cycles. Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more. To access your copy right away, go to: http://www.ino.com/info/447/CD3633/anddp=0andl=0andcampaignid=6 Daily Commentary And the Winner Is… (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 December 30, 2011 (12:06 a.m. ET, Dec. 30): Closing Prices: DOW 12,217.56 (-69.48, -0.57%), SandP 500 1,257.60 (-5.42, -0.43%), NASDAQ 2,605.15 (-8.59, -0.33%), Nikkei 225 8,455.35 (+56.46, +0.67%), DAX 5,898.35 (+49.57, +0.85%), FTSE 5,572.28 (+5.51, +0.1%) OIL 98.83, GOLD 1,5529, SILVER 27.915 EURO 1.2955,YEN 76.92, BRITISH POUND 1.5529, U.S. DOLLAR INDEX 80.52 It’s a Tie! The bulls and bears were involved in a fierce game of tug-of-war throughout most of this past year. In a battle that was often too close to call, the question of who would come out ahead… or behind… has finally been answered. When it came to the three major indices, however, the answer was different for each one. The Dow Jones Ind. Ave. ($DJI) finished the year higher by 5.5%, the SandP 500 ($SPX) was virtually flat, and the Nasdaq Composite ($COMPX) was down 1.8%. In truth, it wasn’t been so much of a rivalry as it was a test of who could stand their ground and emerge relatively unscathed. Many of the indices abroad were not as lucky. China’s Shanghai Composite Index ended the year lower by 21.7%, while France’s CAC-40 was down 17.3%. Even Germany was hit hard with the Xetra Dax lower by 15%. Dow Jones Industrial Average (Figure 1) As we start the new year, we are going to continue to see this struggle grab the headlines. The market is set to open higher on Tuesday thanks to positive data from China and Germany, but the economic woes of this past year are not going to be solved overnight… or anytime soon for that matter. Although the market has performed quite well in light of things, in the U.S. this can largely be attributed to the fact that in comparison to Europe, the U.S. markets have looked quite peachy. And in many respects, things have been looking up. As companies cut spending, looking for ways to keep costs down, they’ve seen a decent overall earnings season. Unfortunately, these victories have not been passed down. Spending cuts have meant leaner companies that have also cut labor costs, which have done nothing to help unemployment. And it’s the middle class, who have seen most of their wealth wiped out in the housing fiasco, who are continuing to feel the greatest pressure. On Friday, it’s expected that the unemployment rate will once again tick higher. SandP 500 (Figure 2) Index Wrap-up The Dow Jones Industrial Average ($DJI) ended the day on Friday with a loss of 69.48 points, or 0.57%, and closed at 12,217.56. Only seven of the Dow’s thirty index components ended the session in the black. The strongest performers were Bank of America (BAC) (+1.83%) and Hewlett Packard (HPQ) (+0.55%). The weakest were IBM (IBM) (-1.24%), Intel (INTC) (-1.22%), and Boeing (BA) (-1.03%). The Dow ended the year with a gain of 5.53%. Tee strongest performers for the year were McDonalds (MCD), IBM (IBM), and Pfizer (PFE). The weakest were Bank of America (BAC), Alcoa (AA), and Hewlett-Packard. The SandP 500 ($SPX) finished the session with a loss of 5.42 points, or 0.43%, and closed at 1,257.60. The strongest individual percentage performers in the index were MetroPCS Communications (PCS) (+5.34%), Alpha Natural Resources (ANR) (+3.71%), and United States Steel Corp. (X) (+3.08%). The weakest were Sears Holdings Corp. (SHLD) (-3.4%), Leggett and Platt (LEG) (-3.23%), and Rowan Cos. Inc. (RDC) (-2.22%). The SandP 500 ended the year flat. The strongest performers for the year were Cabot Oil and Gas (COG), El Paso (EP), and Intuitive Surgical (ISRG). The major losers were First Solar (FSLR), Monster Worldwide (MWW), and Alpha Natural Resources (ANR). The Nasdaq Composite ($COMPX) ended the session lower by 8.59 points, or 0.33%, on Friday and it closed at 2,605.15. The strongest performers in the Nasdaq-100 ($NDX) Seagate Tech. (STX) (+3.47%), First Solar (FSLR) (+2.74%), and Baidu (BIDU) (+1.53%). Only six components posted a loss. The weakest were Sears Holdings Corp. (SHLD) (-3.4%), Fossil Inc. (FOSL) (-3.36%), and Ross Stores (ROST) (-2.12%). The Nasdaq Composite ($COMPX) ended the year with a loss of 1.8%. It’s 2011 winners were led by Intuitive Surgical (ISRG), Alexision Pharmaceuticals (ALXN), and Hansen Natural (HANS). The top decliners were Research In Motion (RIMM), First Solar (FSLR), and Netflix (NFLX). Nasdaq Composite (Figure 3) Busy Data Week Ahead It was a rather unexciting week on the data front this past week, but that’s about to change. Despite the shortened trading week, it’s a busy one for economic reports. The biggie in the U.S. this week will be December’s unemployment and nonfarm payrolls report on Friday, but a number of large retailers will be reporting their December sales this week as well. Those to watch on Thursday include Costco Wholesale (COST), Macy’s (M), Nordstrom (JWN), and Target (TGT). These will be watched closely for signs of just how thrifty Americans have been this holiday season after a year of continued economic struggles. Also out this week will be the Institute for Supply Management’s Manufacturing Index and the Commerce Department’s report on construction spending for December on Tuesday, as well as the FOMC minutes from the December 3 meeting of the Fed. December auto sales come out on Wednesday. The ISM nonmanufacturing index for December then follows on Thursday. More Resistance Ahead! As far as the technicals are concerned, Tuesday’s upside breakout now places the next level of resistance at July’s highs. The Dow is the closest to testing this level and this test will likely slow the upside. The SandP 500 is next. A test in that index should lead to an even greater daily to weekly correction. The same goes for the Nasdaq, which just broke out of a triangle on the daily time frame and whose July highs are comparable to those hit in lat October and early November. ECONOMIC REPORTS AND EVENTS THIS WEEK Jan 3 10:00 AM ISM Index Dec Jan 3 10:00 AM Construction Spending Nov Jan 3 2:00 PM FOMC Minutes 12/13 Jan 4 7:00 AM MBA Mortgage Index 12/31 Jan 4 10:00 AM Factory Orders Nov Jan 4 2:00 PM Auto Sales Dec Jan 4 2:00 PM Truck Sales Dec Jan 5 7:30 AM Challenger Job Cuts Dec Jan 5 8:15 AM ADP Employment Change Dec Jan 5 8:30 AM Initial Claims 12/31 Jan 5 8:30 AM Continuing Claims 12/24 Jan 5 10:00 AM ISM Services Dec Jan 5 11:00 AM Crude Inventories 12/31 Jan 6 8:30 AM Nonfarm Payrolls Dec Jan 6 8:30 AM Nonfarm Private Payrolls Dec Jan 6 8:30 AM Unemployment Rate Dec Jan 6 8:30 AM Hourly Earnings Dec Jan 6 8:30 AM Average Workweek Dec International: Eastern Time Zone (GMT -4:00) (New York, Toronto) Jan 2 EUR German Retail Sales (NOV) (NOV) Jan 2 03:55 EUR German Purchasing Manager Index Manufacturing (DEC F) (DEC F) Jan 2 04:00 EUR Euro-Zone Purchasing Manager Index Manufacturing (DEC F) (DEC F)Jan 2 17:30 AUD AiG Performance of Manufacturing Index (DEC) (DEC) Jan 2 20:00 CNY China Non-manufacturing PMI (DEC) Jan 3 03:30 CHF SVME-Purchasing Managers Index (DEC) (DEC) Jan 3 03:55 EUR German Unemployment Change (DEC) (DEC)*** Jan 3 03:55 EUR German Unemployment Rate s.a. (DEC) (DEC) Jan 3 04:30 GBP Purchasing Manager Index Manufacturing (DEC) (DEC) Jan 3 10:00 USD Construction Spending (NOV) (NOV) Jan 3 10:00 USD ISM Manufacturing (DEC) (DEC)*** Jan 3 10:00 USD ISM Prices Paid (DEC) (DEC) Jan 3 14:00 USD Fed Releases Minutes From Dec. 13 FOMC Meeting*** Jan 4 03:55 EUR German Purchasing Manager Index Services (DEC F) (DEC F) Jan 4 04:00 EUR Euro-Zone Purchasing Manager Index Composite (DEC F) (DEC F) Jan 4 04:00 EUR Euro-Zone Purchasing Manager Index Services (DEC F) (DEC F) Jan 4 04:30 GBP Purchasing Manager Index Construction (DEC) (DEC) Jan 4 04:30 GBP Net Consumer Credit (NOV) (NOV) Jan 4 04:30 GBP Net Lending Sec. on Dwellings (NOV) (NOV) Jan 4 04:30 GBP Mortgage Approvals (NOV) (NOV) Jan 4 05:00 EUR Euro-Zone Consumer Price Index Estimate (DEC) (DEC) Jan 4 10:00 USD Factory Orders (NOV) (NOV) Jan 4 17:30 AUD AiG Performance of Service Index (DEC) (DEC) Jan 4 19:00 AUD HIA New Home Sales (NOV) (NOV) Jan 4 19:30 AUD Trade Balance (Australian dollar) (NOV) (NOV) Jan 5 04:30 GBP Purchasing Manager Index Services (DEC) (DEC) Jan 5 05:00 EUR Euro-Zone Industrial New Orders s.a. (OCT) (OCT) Jan 5 05:00 EUR Euro-Zone Producer Price Index (NOV) (NOV) Jan 5 08:15 USD ADP Employment Change (DEC) (DEC) Jan 5 10:00 CAD Ivey Purchasing Managers Index s.a. (DEC) Jan 5 10:00 USD ISM Non-Manufacturing Composite (DEC) (DEC) Jan 5 17:30 AUD AiG Performance of Construction Index (DEC) (DEC) Jan 6 USD ICSC Chain Store Sales (DEC) Jan 6 03:15 CHF Consumer Price Index (DEC) (DEC) Jan 6 03:15 CHF CPI – EU Harmonised (DEC) Jan 6 05:00 EUR Euro-Zone Business Climate Indicator (DEC) (DEC) Jan 6 05:00 EUR Euro-Zone Consumer Confidence (DEC F) (DEC F) Jan 6 05:00 EUR Euro-Zone Retail Sales (NOV) (NOV)*** Jan 6 05:00 EUR Euro-Zone Unemployment Rate (NOV) (NOV) Jan 6 06:00 EUR German Factory Orders s.a. (NOV) (NOV) Jan 6 07:00 CAD Unemployment Rate (DEC) (DEC)*** Jan 6 07:00 CAD Net Change in Employment (DEC) (DEC)*** Jan 6 07:00 CAD Full Time Employment Change (DEC) Jan 6 07:00 CAD Part Time Employment Change (DEC) Jan 6 07:00 CAD Participation Rate (DEC) Jan 6 08:30 USD Change in Non-farm Payrolls (DEC) (DEC)*** Jan 6 08:30 USD Change in Private Payrolls (DEC) Jan 6 08:30 USD Change in Manufacturing Payrolls (DEC) (DEC) Jan 6 08:30 USD Unemployment Rate (DEC) (DEC)*** Jan 6 08:30 USD Avg Hourly Earning YOY All Emp (DEC) *** 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, Jan 2, 2012 Before: – During: – After: – Tuesday, Jan 3, 2012 Before: – During: – After: LNDC, PRGS, TISI Wednesday, Jan 4, 2012 Before: UNF During: – After: MOS, RECN, SONC, TXI Thursday, Jan 5, 2012 Before: STZ, HELE, MON During: – After: SHLM, APOL, GPN, RT, SABA, XRTX Friday, Jan 6, 2012 Before: CMC, IHS During: – After: – 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=