Post subject: May 28th Friday 2010 Emini TF ($TF_F) points +28.20
Posted: Fri May 28, 2010 4:35 pm
Joined: Sat Jan 10, 2009 1:06 pm Posts: 2805 Location: Canada
Trade Journal By M.A. Perry Trader and Founder of WRB Analysis (wide range body analysis)
Trade journals are crucial in preventing us traders from becoming complacent or content with our trading plan or the markets because without having the ability to review archives of past trading days in a forever changing market...we won't know it's time to adapt when change occurs in the markets because broker statements alone doesn't help us keep that edge in comparison to a trade journal. In addition, this public trade journal contains useful trading tips a few times per week to encourage readers to return for more information and to help ensure I myself don't forget the importance of basic concepts within my own trading plan. Further, there are market summaries from Youtube Bloomberg, CNNMoney and Yahoo Finance as a quick archive of what happened in the markets on a particular day of trading. Thus, if you're looking for trading tips and market summaries that can improve your trading and/or understanding of what happen on a particular day that involves more than just entry signals...consistently read this trade journal and the #FuturesTrades chat room logs where I post my trades in real-time from entry to exit (see link below) via my IRC user name wrbtrader.
Today's results are 8 wins : 2 losses : 1 breakeven (see above #FuturesTrades log). The headlines in the market today was the downgrade of Spain...putting more emphasis on the financial crisis in Europe. In addition, the month of May market performance is the worst in 70 years. This contrast what volatility traders are saying that they themselves had record profits that's comparable to the fall of 2008. This tells me that most profitable traders (the few) are using methods that's sensitive to changing volatility while other traders (the majority) are losing because they don't know how to exploit rising or changing volatility. With that said, my key trade of the day was the 5th trade around 1041am est via the Volatility Trading Report (VTR) in combo with exploiting the WRB Analysis advance tutorial chapter 7.
Trading Tip: Intermarket Analysis merge with S/R Analysis is a very powerful trading tool.
FYI - You can ask me questions here at the forum or you can tweet me on twitter about any thing related to today's trading or related to your own trading.
In addition, posted below are direct links about my trade methodology or trading approach that enables me to identify key trading areas in the price action that represent changes in supply/demand and volatility along with being able to exploit these changes via WRB Analysis (wide range body analysis).
NEW YORK (CNNMoney.com) -- Stocks cut losses but finished in the red Friday, ending a dismal month that saw the Dow Jones industrials suffer their worst May in 70 years, after a downgrade of Spain's debt reminded investors that Europe's economic woes continue.
The Dow Jones industrial average (INDU) lost 122 points, or 1.2%, after having been down as much as 186 points earlier in the session. The S&P 500 index (SPX) fell 14 points, or 1.2%, and the Nasdaq composite (COMP) dropped 21 points, or 0.9%.
Stocks were already weak before the ratings agency cut Spain's debt one notch. While the cut still leaves the debt in investment grade territory, as opposed to junk, it nonetheless managed to rattle investors in a thinly-traded session.
"People were expecting a nice slow day and then the Spain news turned things around," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
"It may have been anticipated, but It's still a big deal," he said. "It tells us we are not out of the woods yet."
Friday marked the end of a rough month on Wall Street in which stocks plunged on worries about the European debt crisis, the weak euro and bets that the market advance had outpaced any economic recovery.
The Dow lost 7.9%, according to early tallies, seeing its worst month since February 2009, when it fell 11.7%, and worst May since 1940, when it plunged 21.7%.
The Nasdaq lost 8.3%, its worst month since November 2008, when it dropped 10.8%, and its worst May since 2000, when it skidded 11.9%.
The S&P 500 declined 8.2%, its worst month since February 2009, when there was an 11% loss, and its worst May since 1962, when the drop was 8.6%.
Stocks rallied Thursday after China said it will stay invested in European debt. The Dow jumped 285 points, or almost 3%, and the S&P 500 and Nasdaq both gained more than 3%.
After such an advance, investors pled exhaustion Friday, with trading pretty quiet as many market pros stepped out ahead of the Memorial Day weekend.
Stock declines were broad, with 27 of 30 Dow components falling, led by Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), 3M (MMM, Fortune 500), Johnson & Johnson (JNJ, Fortune 500).
The CBOE Volatility (VIX) index, or the VIX, Wall Street's fear factor, rallied 9% in afternoon trading. 0:00 /2:25Europe crisis: Wake-up call
Economy: A morning report from the Commerce Department showed consumer income picked up last month, but spending didn't follow suit.
Personal income rose 0.4% in April, matching the gain in March. Economists surveyed by Briefing.com expected the 0.4% gain. Personal spending was flat after rising 0.6% in the previous month. Spending was expected to grow by 0.3%.
The Core PCE, the report's inflation component, rose 0.1%, in line with estimates, after increasing 0.1% in March.
The May consumer sentiment index from the University of Michigan rose to 73.6 from 73.3 last month. Economists expected it to ease to 73.2.
The Chicago PMI, a regional reading on manufacturing, fell to 59.7 in May from 63.8 in April, versus forecasts for a drop to 60. Don't count on a Verizon iPhone
Euro: The European currency has seesawed since falling to a four-year low of $1.2146 last week.
On Friday, the euro fell 0.5% versus the dollar but remained above that four-year low. The dollar fell 0.3% against the yen.
World markets: Markets in Europe ended mixed. Britain's FTSE 100 lost 0.1%, Germany's DAX gained 0.1% and France's CAC 40 lost 0.3%.
Asian markets ended higher. Japan's Nikkei gained 1.3% and Hong Kong's Hang Seng rose 1.7%. China's Shanghai Composite gained 1.1%.
Commodities: U.S. light crude oil for July delivery fell $1.08 to $73.37 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $4.40 to $1,210 an ounce.
Bonds: Treasury prices gained modestly, lowering the yield on the 10-year note to 3.31% from 3.34% late Thursday. Treasury prices and yields move in opposite directions.
Trading volume: Market breadth was negative. On the New York Stock Exchange, losers beat winners two to one on volume of 800 million shares. On the Nasdaq, decliners topped advancers by almost three to one on volume of 1.41 billion shares.
4:30 pm : Stocks made some dramatic swings this session, but the broader market failed to find enough support to prevent a sharp loss that secured its worst monthly performance since February 2009.
The major equity averages traded in negative territory for the entire session as many buyers took a break after the S&P 500 surged more than 3% in the prior session. Many were also inclined to get an early start on the long, holiday weekend (U.S. markets will be closed on Monday in observance of Memorial Day).
The absence of many participants led to low trading volume for most of the session, but a flurry of trades in the final hour pushed total trading volume on the NYSE to 1.4 billion shares. That is actually above both the 200-day and 50-day moving average.
The heightened share volume on what would ordinarily be a low-volume session suggested there was some conviction among those that participated in Friday's trade. Their efforts were partly fueled by news that ratings agency Fitch downgraded the debt of Spain to AA+ from AAA. The announcement wasn't a total surprise given the persistent fiscal problems that face the country, but it was still enough to bring about a barrage of selling.
The headline also put pressure on the euro, which fell roughly 0.8% to $1.227.
All 10 major sectors in the S&P 500 settled in negative territory (utilities had a fractional loss). Financial stocks, which fell 2.1%, felt the worst of the selling effort. They were followed by energy stocks, which dropped 2.0%.
Weakness among energy stocks was made worse by a drop in oil prices, which failed to recover from their afternoon slide and, in turn, closed pit trade with a 0.8% loss at $73.92 per barrel. Oil futures prices fell 14% this month.
Such weakness weighed heavily on the CRB Commodity Index. In turn, the CRB recorded its worst monthly performance in 16 months by dropping more than 8% in May.
The stock market performed just as poorly this month. It closed May with a monthly loss of roughly 8.2%. That made for its worst monthly showing in 15 months.
The latest dose of data had little effect on trade. Reports included news that personal income for April increased 0.4%, as expected, but personal spending was flat when a 0.3% increase had been widely anticipated. Core personal consumption expenditures made a monthly increase of just 0.1% for the second straight month, as had been expected.
The University of Michigan's final Consumer Confidence Survey for May improved to 73.6, which was slightly better than expected.
The Chicago Purchasing Managers Index for May came in at 59.7, which was a bit below what had been expected after the index set a five-year high in April.
3:30 pm : Precious metals put in a lackluster session Friday, which marked the final trading day of the month since markets will be closed on Monday in observance of Memorial Day. As for specific action, gold prices mustered a fractional gain to settle pit trade at $1212.20 per ounce, while silver prices settled 0.2% lower at $18.42 per ounce.
Natural gas prices were strong. Specifically, the commodity closed pit trade priced at $4.35 per MMBtu, up 1.3%.
Oil prices failed to recover from their afternoon slide. In turn, the commodity closed pit trade with a 0.8% loss at $73.92 per barrel. That made for a modest pullback from the 8% surge that oil prices recorded during the course of the two preceding sessions, but even those gains couldn't prevent the worst monthly performance for oil prices since December 2008 -- oil futures prices fell 14% this month.
Such weakness weighed heavily on the CRB Commodity Index all month. In turn, the CRB Commodity Index finished May 8.2% lower than where it started. That makes for the CRB's worst monthly performance in 16 months. DJ30 -45.20 NASDAQ -5.43 SP500 -4.70 NASDAQ Adv/Vol/Dec 998/1.64 bln/1630 NYSE Adv/Vol/Dec 1280/920 mln/1717
3:00 pm : Stocks have staged a strong rebound to their best levels since midsession. The move comes without any individual catalyst or news item. However, the move has been helped by the light trading volume, which often exaggerates the moves of stocks. DJ30 -80.34 NASDAQ -15.04 SP500 -8.76 NASDAQ Adv/Vol/Dec 792/1.49 bln/1826 NYSE Adv/Vol/Dec 1015/835 mln/1973
2:30 pm : After failing to sustain a rebound off of earlier depths, the S&P 500 recently succumbed to another bout of selling pressure, which took it to a fresh session low just beneath 1085. However, technical support has helped the S&P 500 make a modest bounce off of that low.
Volatility has climbed in conjunction with the stock market's recent retreat. As such, the Volatility Index is now up nearly 11%.
Treasuries have ticked higher in response to the recent action. The benchmark 10-year Note is now up 20 ticks to its best level of the session. The move has put its yield a couple of points back below 3.30%. DJ30 -137.93 NASDAQ -30.27 SP500 -15.56 NASDAQ Adv/Vol/Dec 668/1.35 bln/1936 NYSE Adv/Vol/Dec 811/750 mln/2175
2:00 pm : Stocks have started to drift back to their session lows as sellers redouble their efforts. Energy stocks, financials, materials, and industrials are under the most pressure -- each sector is down in excess of 2%.
Oil prices have also fallen under renewed selling. The commodity is now down 1.4% to $73.50 per barrel. Its weakness has dragged the CRB Commodity Index down 1.3%. DJ30 -143.75 NASDAQ -31.82 SP500 -16.27 NASDAQ Adv/Vol/Dec 646/1.27 bln/1944 NYSE Adv/Vol/Dec 813/707 mln/2175
1:30 pm : Stocks have bounced back a bit from their recent slide, which was prompted by news that analysts at ratings agency Fitch downgraded the debt of Spain to AA+ from AAA. Still, losses remain broad.
Volatility has climbed in response to the recent action. As such, the Volatility Index is now up more than 8%.
However, Treasuries have been unable to extend their gains. Despite that, the benchmark 10-year Note remains near its session high. DJ30 -95.15 NASDAQ -23.39 SP500 -10.30 NASDAQ Adv/Vol/Dec 718/1.17 bln/1854 NYSE Adv/Vol/Dec 944/650 mln/2022
1:05 pm : News that ratings agency Fitch downgraded the debt of Spain has caused the major market averages to sink to session lows. The news wasn't a complete surprise to market pundits, but the headline has certainly hampered stocks amid this session's low volume trade.
Stocks had spent the morning and early afternoon stuck in negative territory with varied losses. The lackluster, low volume trade isn't unusual ahead of a long, holiday weekend (U.S. markets will be closed on Monday in observance of Memorial Day).
Despite the anticipation of a slow session, there have been a few headlines of note. Stocks fell under a flurry of selling with increased chatter about intensified geopolitical turmoil involving North Korea. Though they were able to bounce back, stocks suddenly fell to fresh session lows amid more recent news that analysts at Fitch downgraded Spain's debt rating to AA+. The headline also put pressure on the euro, which now stands at $1.232.
Fitch's decision to downgrade Spain's debt wasn't a total surprise, though. Rather, many had expected such a move given the persistent fiscal problems that face the country.
The reaction of stocks to the recent headlines shows what issues the market appears most concerned about, especially since economic data and corporate headlines have had limited influence over trade.
Personal income for April increased in-line with expectations, but total personal spending for the month was flat even though an increase had been expected. However, core personal consumption expenditures made a slight monthly increase for the second straight month, as had been expected.
The University of Michigan released its final Consumer Confidence Survey for May. It made a slight improvement to exceed what many had expected.
Meanwhile, the Chicago Purchasing Managers Index for May slipped from the five-year high that was recorded in April.
In terms of corporate news, Royal Dutch Shell (RDS.A 52.69, -0.32) it will acquire East Resources for almost $5 billion in cash and a handful of retailers released their quarterly results, but the overall quality of their reports was arguably mixed. DJ30 -117.15 NASDAQ -26.77 SP500 -12.37 NASDAQ Adv/Vol/Dec 679/1.10 bln/1863 NYSE Adv/Vol/Dec 899/610 mln/2062
12:30 pm : Stocks have extended their bounce off of morning lows, which were set roughly one hour ago. The move hasn't really been caused by any particular news item or other trading catalyst, but rather the result of a moderation in selling pressure.
Despite the upturn, Treasuries continue to show strength after a beat down in the prior session. Specifically, the benchmark 10-year Note dropped more than one full point on Thursday, but it is now up a solid 15 ticks. Its yield is now at 3.30%. DJ30 -45.95 NASDAQ -11.35 SP500 -4.86 NASDAQ Adv/Vol/Dec 845/900 mln/1681 NYSE Adv/Vol/Dec 1236/485 mln/1694
12:00 pm : The S&P 500 was recently down as much as 1.0%, but it has almost cut that loss in half. The upward move has been generally broad based, but health care stocks have shown some of the most strength. The sector, which is the third-largest sector by market weight in the S&P 500, has made its way to a 0.5% gain.
Still, tech and financials, respectively the two largest sectors by market weight, continue to weigh on the broader market. They are down 1.0% and 1.2%, respectively. DJ30 -58.61 NASDAQ -17.58 SP500 -6.53 NASDAQ Adv/Vol/Dec 787/813 mln/1698 NYSE Adv/Vol/Dec 1085/435 mln/1820
11:35 am : Stocks continue to drift lower so that the major equity averages are now at their worst levels of the day. However, the light volume and choppy trading conditions may lead to volatility and difficulty making predictions about the stock market's movements. DJ30 -78.30 NASDAQ -20.92 SP500 -9.38 NASDAQ Adv/Vol/Dec 690/714404/1778 NYSE Adv/Vol/Dec 952/383624/1936
11:05 am : The market just returned to the morning lows so that the S&P 500 is now down roughly 0.6%. The major averages have been chopping back and forth since the open, although the latest downtick coincides with a few new headlines that have suggested the recent geopolitical turmoil involving North Korea may lead to "all out war." While the escalating tensions have been evident for over a week now, the latest comments serve as a reminder that headline risk remains.
Corporate news flow remains light, and it is likely to stay so for the remainder of the day. Still, trading could get choppy as the day progresses, since volume is likely to dry up as trading desks clear out early ahead of the holiday weekend (U.S. markets are closed on Monday in observance of Memorial Day). DJ30 -65.45 NASDAQ -13.95 SP500 -7.40 NASDAQ Adv/Vol/Dec 690/578178/1778 NYSE Adv/Vol/Dec 952/305896/1936
10:30 am : Commodities prices have cooled after they had staged strong gains in each of the two previous sessions. As such, the CRB Commodity Index is currently down 0.2%, but up 2.4% week-to-date. Despite such a strong weekly performance, the CRB is still on pace for a monthly loss of more than 7%.
Oil prices have bounced back into positive territory to trade with a 0.4% gain at $74.85 per barrel. They had been down as low as $73.86 per barrel just one hour ago.
Natural gas prices are strong. The commodity was recently quoted at $4.37 per MMBtu, up 1.7%.
Gold prices are down for the second straight session. The yellow metal was recently quoted with a 0.4% loss at $1206.50 per ounce.
Silver isn't any stronger. It is also down 0.4% to trade at $18.40 per ounce. DJ30 -44.90 NASDAQ -6.86 SP500 -4.16 NASDAQ Adv/Vol/Dec 948/423 mln/1395 NYSE Adv/Vol/Dec 1259/235 mln/1510
10:00 am : Stocks continue to trade with modest losses, while the breadth of the slide has been broad. As such, consumer staples stocks and utilities stocks make up the only two sectors to sport gains -- they are up 0.1% and 0.4%, respectively.
The University of Michigan just released its final Consumer Confidence Survey for May. It came in at 73.6, which is a slight improvement from the 73.3 that had been previously recorded for the month. It also exceeds the 73.2 that many had come to expect.
At 9:45 AM ET the Chicago Purchasing Managers Index for May was released. It came in at 59.7, which is below the 60.0 that had been expected and down from the five-year high of 63.8 that was recorded in April.
09:45 am : Stocks have slipped in the opening minutes of trade. That move marks a pullback from the stock market's prior session surge, which saw the S&P 500 climb more than 3%. The early action also does little to help the stock market limit its monthly loss, which currently stands at roughly 7%. Stocks haven't had such a bad monthly performance since the stock market dropped 11% in February 2009.
Energy stocks are under the most pressure this morning. The sector is currently down 1.2%. Part of its weakness is owed to a reversal in oil prices, which are currently down 0.6% to $74.10 per barrel after they had been above $75 per barrel just a couple of hours ago. DJ30 -62.13 NASDAQ -16.90 SP500 -7.79 NASDAQ Adv/Vol/Dec 525/146 mln/1661 NYSE Adv/Vol/Dec 696/95 mln/1930
09:15 am : S&P futures vs fair value: +1.30. Nasdaq futures vs fair value: +5.30. Stock futures have been stuck in choppy trade for most of the morning, but they currently point to a flat start for the session. The tepid tone comes as many traders get an early start on the long weekend (markets will be closed Monday in observance of Memorial Day). With fewer participants on hand, trading volume is expected to be light, which has a tendency to lead to exaggerated moves among stocks. With that in mind, it will be interesting to see how stocks trade near their 200-day moving average, which stands near 1105 for the S&P 500. Action around the technical line is likely to make for a key theme to trade since many market participants remain largely unresponsive to economic data, the latest of which showed an in-line monthly increase in personal income, but flat spending.
09:05 am : S&P futures vs fair value: +0.70. Nasdaq futures vs fair value: +4.50. U.S. stock futures currently trade with a slight lead over fair value, while advancing issues outnumber decliners by almost 2-to-1 in Germany's DAX, which is presently up just 0.2%. E.On and Daimler (DAI) are atop the list of leading movers, while Deutsche Boerse and Deutsche Bank (DB) are among the worst laggards. In France, the CAC is down fractionally, though its advancers also outnumber its decliners by nearly 2-to-1. Tech stocks are faring the best; they are currently up 1.3%. Meanwhile, basic materials plays are down 0.8%, which makes them the worst performers. Britain's FTSE has made its way to a 0.3% gain amid broad-based support. Vodafone is a primary leader at the moment, while shares of Royal Dutch Shell (RDS.A) have shown strength of their own following news that the company will acquire East Resources for $4.7 billion in cash. However, fellow energy play BP Plc (BP) has been a drag on trade. In Asia, stocks staged strong gains as they followed the lead of other major markets. Japan's Nikkei climbed 1.3%. Fanuc LTD was a primary leader, while Fast Retailing added support. Overall, though, oil and gas stocks were the best performers; they advanced 3.2%. Oil and gas plays were also strong in Hong Kong's Hang Seng, which advanced 1.7%. PetroChina (PTR) was a primary leader, but banking issues HSBC (HBC) and China Construction Bank boasted big gains of their own. Tencent Holdings was among the weaker performers. Action was much more lackluster in mainland China, where the Shanghai Composite finished flat, even though decliners had a slight edge over advancers. Financials were divided as Bank of China and China Life Insurance staged gains, but Industrial & Commercial Bank and China Merchant Bank faltered.
08:35 am : S&P futures vs fair value: +1.10. Nasdaq futures vs fair value: +6.00. Stock futures are off of their morning highs, but they continue to trade with a modest lead over fair value following the latest dose of data. Personal income for April increased 0.4%, as had been widely expected. Income for the prior month also increased 0.4%. As for personal spending, it was flat for April, even though a 0.3% increase had been widely anticipated after a 0.6% increase in the prior month. Core personal consumption expenditures, a closely watched barometer for inflationary pressures, made a monthly increase of just 0.1% for the second straight month, as had been expected.
08:00 am : S&P futures vs fair value: +2.80. Nasdaq futures vs fair value: +8.80. The stock market surged 3% higher on Thursday, but the follow through has been mixed as stock futures traded with little direction overnight. However, stock futures recently pushed to morning highs, so that the S&P 500 looks like it will open at its 200-day moving average. Action is expected to be slow this session, since many trading desks will be thinly staffed ahead of the long, Memorial Day weekend. Still, the light volume could make for more dramatic swings among stocks. Corporate news flow has been rather limited, though Royal Dutch Shell (RDS.A) announced it will acquire East Resources for almost $5 billion in cash and a handful of retailers are out with quarterly results. There are a number of economic releases coming up, including personal income and spending figures for April (8:30 AM ET), the Chicago Purchasing Managers Index for May (9:45 AM ET), and the final Consumer Confidence Survey for May from University of Michigan (9:55 AM ET).
06:35 am : S&P futures vs fair value: +1.00. Nasdaq futures vs fair value: +3.30.
06:35 am : Nikkei...9762.98...+123.30...+1.30%. Hang Seng...19766.71...+335.30...+1.70%.
06:35 am : FTSE...5238.48...+43.10...+0.80%. DAX...5972.77...+35.60...+0.60%.
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