October 25, 2011

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Daily Commentary

200-Day Moving Averages Pose Strong Resistance (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.) MONDAY’S MARKET WRAP-UP Market Snapshot for October 24, 2011 (11:20 p.m. ET): Closing Prices: DOW 11,913.62 (+104.83, +0.89%), SandP 500 1,254.19 (+15.94, +1.29%), NASDAQ 2,699.44 (+61.98, +12.35%), Nikkei 225 8,820.29 (-23.69, -0.27), DAX 6,055.27 (+84.31, +1.41%), FTSE 5,548.06 (+59.41, +1.08%) OIL 91.65, GOLD 1,657.40, SILVER 31.795 EURO 1.3916, YEN 76.06, BRITISH POUND 1.5995, U.S. DOLLAR INDEX 76.345 OUTLOOK After flirting with the 100-day moving averages for just over a week, the Dow Jones Ind. Average ($DJI) and SandP 500 ($SPX) finally pushed through them on Friday to strike the next level of daily resistance we’ve been watching at their 200-day moving averages. As we head into Tuesday’s trade we are once again looking for corrective action with a strong potential for seeing the day’s highs having already hit in premarket trade. Both of these major indices had three distinct highs hit on the 15 minute time frame on the all-sessions charts between Friday and Monday. They then paused longer in overnight trade with a gradual pullback afterhours on Monday into early Tuesday morning before breaking to a fourth high. This leaves the trend exhausted with a high probability of a break in the 15 minute uptrend channel.

Monday’s Price Action The market has a decent uptrend day on Monday as the breakout from Friday continued, but the pace shifted between Friday’s highs and Monday’s highs. The slowdown created plenty of opportunity for intraday traders looking to take advantage of the 5 minute price swings, but was more of a test of patience for those holding the larger time frames since it meant more overlap in price action on the 15 minute time frame from one bar to the next as the market slid into upper channel resistance on that time frame (shown in Figure 2). This level of resistance was also the 200-day moving averages in the Dow and SandP and equal move resistance on 5 and 15 minute time frames. Meanwhile, the Nasdaq has to deal with resistance of its own as it approaches July’s highs.

Index Wrap-up

The Dow Jones Industrial Average ($DJI) ended the day on Monday with a gain of 104.83 points, or 0.89%, and closed at 11,913.62. Twenty-three of the Dow’s thirty index components posted a gain. The top performers were Caterpillar (CAT) (+5.01%), Bank of America (BAC) (+4.02%), JP Morgan (JPM) (+3.44%), and Alcoa (AA) (+3.42%). The weakest were Procter and Gamble (PG) (-1.34%) and Verizon (VZ) (-1.31%), and ATandT (T) (-0.86%). The SandP 500 ($SPX) finished the session with a gain of 15.94 points, or 1.29%, and closed at 1,254.19. The greatest strength was in the materials and financials. Top percentage performers in the index were CBRE Group (CBG) (+9.48%), Alpha Natural Resources (ANR) (+9.48%), and Freeport McMoran Copper and Gold (FCX) (+7.98%). The weakest industry groups were telecoms and consumer staples and the weakest individual performers were Kimberly Clark Corp. (KMB) (-4.59%), Marathon Pete. Corp. (MPC) (-4.02%), and Sprint Nextel (S) (-2.89%). The Nasdaq Composite ($COMPX) ended the session higher by 61.98 points, or 2.35%, on Monday and it closed at 2,699.44. The strongest performers in the Nasdaq-100 ($NDX) were Green Mountain Coffee (GMCR) (+8.67%), Baidu (BIDU) (+8.07%), First Solar (FSLR) (+7.77%), and Ctrip.com (CTRP) (+6.55%). Only Costco (COST) (-0.96%) and Sears Holdings (SHLD) (-0.08%) posted a loss. Nasdaq Composite (Figure 3)

ECONOMIC REPORTS AND EVENTS THIS WEEK

U.S. Domestic: Eastern Time Zone (GMT -5:00) (New York, Toronto) Oct 25 9:00 AM Case-Shiller 20-city Index Aug Oct 25 10:00 AM Consumer Confidence Oct Oct 25 10:00 AM FHFA Housing Price Index Aug 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 23 19:50 JPY Merchandise Trade Balance Total (SEP) Oct 23 20:30 AUD Producer Price Index (3Q)*** Oct 24 03:30 EUR German Purchasing Manager Index Manufacturing (OCT A) Oct 24 03:30 EUR German Purchasing Manager Index Services (OCT A) Oct 24 04:00 EUR Euro-Zone Purchasing Manager Index Composite (OCT A) Oct 24 04:00 EUR Euro-Zone Purchasing Manager Index Manufacturing (OCT A) Oct 24 04:00 EUR Euro-Zone Purchasing Manager Index Services (OCT A) Oct 24 05:00 EUR Euro-Zone Industrial New Orders (AUG) Oct 24 08:30 USD Chicago Fed Nat Activity Index (SEP) Oct 24 17:45 NZD Consumer Prices Index (3Q)*** Oct 24 19:00 AUD Conference Board Leading Index (AUG) 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 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 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=