November
2,
2011 HOME EDUCATIONAL
PRODUCTS CONTACT
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Commentary Eyes on the Fed (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.) TUESDAY’S MARKET
WRAP-UP Market
Snapshot
for November 1,
2011 (5:12 a.m. ET):
Closing
Prices: DOW
11,657.96 (-297.05,
-2.48%), SandP
500 1,218.28 (-35.02,
-2.79%), NASDAQ
2,606.96 (-77.45, -2.89%), Nikkei 225 8,835.52
(-152.87, -1.7), DAX 5,834.51 (-306.83, -5%), FTSE 5,421.57
(-122.65, -2.21%) OIL 91.64, GOLD 1,721.00, SILVER 33.315 EURO 1.3692, YEN 78.34, BRITISH POUND 1.5946, U.S.
DOLLAR INDEX 77.455 Market Takes Its Cue From
Europe The
market is always impacted by the latest global headlines, but over the
past several weeks this has been particularly true. Although strategies
develop technically, it’s overall market sentiment that leads to these
technical setups. Lately that sentiment has been quite bipolar. Sharp
upside on hopes that meetings among European Union leaders would be
fruitful in developing a solution to the region’s debt crisis were
followed by the realization that there is no quick fix and officials
are divided on how to best mitigate the disastrous situation. Earnings In the meantime, corporate earnings have also been grabbing headlines.
This is the last big week of third quarter earnings season and while
earnings have consistently topped analysts’ expectations, most of the
growth has been abroad. Companies relying upon strength in the U.S. and
Europe have mostly fallen short. Comcast (CMCSA) and Time Warner (TWX)
are on the docket for Wednesday ahead of the opening bell, while Kraft
Foods (KFT) reports after the close. Playing the Fed Decision Also making headlines on Wednesday will be the U.S. FOMC interest rate
and policy announcement coming up at 2:15 ET. Interest rates are
expected to remain unchanged, so eyes and ears are on the accompanying
policy statement. In the past, the market often had wild swings in
price action following the Fed, but over the past several years those
reactions tamed down as the Fed went into a holding pattern on interest
rates. Recently, however, the accompanying statement on economic
outlook has stirred things up once again and the market’s reaction
following the announcement has been amplified. A typical Fed day plays out as follows: Often there is upside in the
morning, often out of the open (less common as Fed reactions
diminished). This is followed by a slowdown mid-day as market
participants move to the sidelines in anticipation of the news. Trading
becomes higher risk simply due to this lack of participation and setups
have diminished follow-through. After the announcement, the market usually has two sets of reactive
moves consisting of three waves each. An initial reaction on the 1
minute time frame is followed by a second, counter-move that can be
more extreme than the initial reaction. This means that technical
biases, such as a breakdown, can trigger following the announcement and
then be flushed out shortly thereafter before the third move takes
place that confirms the initial bearish bias. This makes trading that
initial reaction the highest risk. This set of three is then repeated
on a five minute time frame with the first three waves on the one
minute charts making up the initial move on the five minute one. More News From Europe on
the Horizon Even with the additional news out of the States, Europe will still
continue to grab the spotlight when the region’s leaders meet 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. Dow
Jones Industrial Average (Figure 1) Tuesday’s Economic
Reports Tuesday’s economic reports in the U.S. had little impact upon the
session’s price action. The news was unwelcome, but after sharp
selling, the market was already exhausted intraday on the downside by
the time it hit. The ISM Manufacturing Index fell from 51.6 in
September to 50.8 in October. It had been expected to move higher to
52.1. Meanwhile, construction spending was higher by 0.2% in September,
but fell short of expectations. It had been higher by 1.4% the previous
month. SandP
500 (Figure 2) Index Wrap-up The
Dow Jones Industrial
Average ($DJI) ended the day on Tuesday with a loss of 297.05 points, or 2.48%, and
closed at 11,657.96.
Most of the day’s losses came overnight and the market traded in a
range throughout the day. All of the Dow’s thirty index components
posted a loss except Pfizer
(PFE) (+0.36%), which managed to pull higher following
stronger-than-anticipated quarterly earnings. The weakest
were the financials: Bank of America (BAC) (-6.30%) and JP Morgan (JPM)
(-5.90%). Cisco Systems (CSCO) (-5.13%) also posted a loss over 5%. The
SandP 500 ($SPX) finished the session with a loss
of 35.02
points, or 2.79%, and
closed at 1,218.28. The
strongest
individual percentage performers were ITT Corp. (ITT) (+7.24%), Expedia
(EXPE) (+4.27%), and American Tower Corp. (AMT) (+3.30%). None of the
index’s industry groups, however, managed a gain. The weakest
stocks fell in the financials, energy, and industrials. The top
percentage decliners were MetroPCS Communications (PCS)
(-9.88%), Hudson City Bankcorp
(HCBK) (-9.28%), and Advanced Micro Devices (AMD) (-9.09%). The Nasdaq
Composite
($COMPX) ended the session lower by 77.45 points, or 2.89%,
on Tuesday and
it closed at 2,606.96. Only
four components in the
Nasdaq-100 ($NDX) posted a gain. The strongest were Expedia (EXPE)
(+4.27%) and Seagate Tech. (STX) (+1.75%). The weakest were Schein
Henry (HSIC) (-7.17%), First Solar (FSLR) (-6.01%), and Micron Tech.
(MU) (-5.37%). Nasdaq
Composite (Figure 3) 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. 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
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