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 Post subject: October 20th Wednesday 2010 Emini TF ($TF_F) points -6.40
PostPosted: Thu Oct 21, 2010 9:17 am 
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Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Dow Holds Triple-Digit Gains
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By Julianne Pepitone, staff reporter
October 20, 2010: 6:36 PM ET

NEW YORK (CNNMoney.com) -- Stocks have fallen into a pattern: Rise, rise, rise for several sessions, then sell off after a spot of bad news. Recover the next day, and repeat.

This week has been no exception. Stocks rebounded to end sharply higher Wednesday, following the worst session in more than two months. Investors digested a mixed batch of financial results and shrugged off a tepid report on regional economic conditions.

The Dow Jones industrial average (INDU) added 129 points, or 1.2%, to end at 11,107.97. The S&P 500 (SPX) gained 12 points, or 1.1%, to close at 11,178.17, and the Nasdaq (COMP) rose 20 points, or 0.8%, to settle at 2,457.39.

Gains were broad-based in the recovery from Tuesday's rout, with 27 of the 30 blue-chip Dow components ending higher. Airline stocks received a boost following Boeing's upbeat earnings, but financial shares lagged on mixed reports from big banks.

Stocks have been rising on speculation that the Federal Reserve will announce plans to resume large-scale purchases of U.S. Treasuries, a policy called quantitative easing, when it meets next month.

"Everyone's thinking, the Fed's got my back, and when they run out of money they'll just find some more," said Joseph Saluzzi, co-head of equity trading at Themis Trading.

But investors fled stocks Tuesday after China unexpectedly raised interest rates, heightening concerns that cooling growth in China would drag on global growth. Major U.S. stock indexes posted the biggest one-day declines since early August.

Saluzzi said the market is in a cycle of rising for weeks on an expectation of Fed moves -- then selling off for a day on disappointing news, followed by a rebound session.

"It's more of the same, with no end in sight," Saluzzi said of Wednesday's session.

Companies: Shares of Wells Fargo (WFC, Fortune 500) ended 4.3% higher after the bank posted a profit of $3.15 billion, or 60 cents per share -- up 19% from a year earlier and above what analysts estimated. The San Francisco-based bank's sales were in line with expectations at $20.9 billion.

Morgan Stanley (MS, Fortune 500) reported a profit of $313 million, or 5 cents per share, for the third quarter -- down $67% from a year ago, due to a weak trading environment. Revenue also tumbled 20% compared to a year ago. Shares closed flat.

Dow component Boeing (BA, Fortune 500) said it earned $837 million, or $1.12 per share, on revenue of $17 billion -- topping expectations for earnings of $1.06 per share on revenue of $16.8 billion.

The aircraft maker also raised its guidance for the remainder of the year to between $3.80 and $4 per share, thanks to an improved outlook for commercial airplanes. Shares spiked to end 3.4% higher.

Yahoo (YHOO, Fortune 500) reported higher net income from the year-earlier period after U.S. markets closed Tuesday. But the company posted sales that fell short of expectations. Shares rose 2% Wednesday.

After the bell Wednesday, Netflix (NFLX) said its third-quarter net income grew as its subscriber base increased 52% over the year. Shares rose almost 8% in after-hours trade.

Economy: The Federal Reserve released its Beige Book at 2 p.m. ET, which showed that economic growth in various regions continued at a modest pace last month. Despite the lagging housing market, the Fed reported bright spots in the manufacturing, travel, tourism and auto industries.

The Fed's monetary policy has been in focus as investors anticipate the central bank's launch of a new round of quantitative easing at the conclusion of its meeting on Nov. 3.

World markets: European markets ended higher. The CAC 40 in France gained 0.4%, DAX in Germany rose 0.5%, and Britain's FTSE 100 posted a 0.4% increase.

Asian markets mostly finished lower on Wednesday, as investors got their first chance to react to China's rate hike. Japan's benchmark Nikkei tumbled 1.7% and the Hang Seng in Hong Kong dropped 0.9%. Shares in Shanghai closed a shade higher.
0:00 /3:12Interest rate changes won't help U.S.

Commodities and currencies: The dollar fell against the British pound, euro and Japanese yen.

Oil prices for November delivery gained $2.28 to settle at $81.77 a barrel.

Gold futures for December delivery rose $8.20 to close at $1,344.20 an ounce.

Bonds: The price on the benchmark 10-year Treasury bond was unchanged, and the yield held steady at 2.48%.

Image

Yahoo! Finance

4:30 pm : A drop by the dollar and another big batch of better-than-expected earnings announcements helped stocks recover from the prior session's slide, though some of the stock market's gain faded into the close.

The dollar surged 1.7% in the prior session, but was dumped this session for a 1.3% loss in what appeared to be a diminished sense of risk aversion.

That said, support for commodity-backed stocks and basic materials plays drove the materials sector to a 2.0% gain, which was the best of any major sector. All 31 members in the materials sector advanced.

Shares of airlines staged some of the biggest gains. As such, AMR Corp (AMR 7.36, +0.84), US Airways (LCC 10.84, +0.75), and Delta Air Lines (DAL 12.97, +1.27) helped drive the Amex Airline Index to a 5.3% gain and its highest level in almost three years. All three air carriers reported better-than-expected earnings.

Internet search outfit Yahoo! (YHOO 15.80, +0.31) also reported an upside earnings surprise, but it issued a rather weak forecast. Dow components United Technologies (UTX 73.92, +0.31) and Boeing (BA 71.36, +2.31) both posted upside earnings surprises. Each improved its earnings outlook, too.

Financials finished with a 1.1% gain after being down as much as 0.7% amid an earnings miss from regional lender Comerica (CMA 35.94, -2.45) and a messy report from Morgan Stanley (MS 25.38, -0.01). Shares of MS successfully recovered from their loss, but could not quite finish in higher ground. Meanwhile, US Bancorp (USB 22.83, +0.02) finished flat and Wells Fargo (WFC 25.60, +1.05) spiked. Both of bested bottom line expectations. BlackRock (BLK 169.51, -5.12) also posted better-than-expected earnings, but its shares fell for the fourth time in five sessions.

Amid an improved tone of trade and the dollar's downturn, commodities recovered from their selloff in the prior session. More specifically, the CRB Commodity Index dropped 1.9% in the prior session for its worst loss since June, but rebounded to a 2.1% gain today. The move was largely led by oil prices, which bounced 2.9% to $82.52 per barrel. A smaller-than-expected build in weekly oil inventories helped.

Little was made of the Fed's latest Beige Book, which was the only item on today's economic calendar. According to data from the twelve Fed Districts, national economic activity continued to rise, albeit at a modest pace, from September to early October.

Advancing Sectors: Materials (+2.0%), Energy (+1.4%), Telecom (+1.4%), Industrials (+1.3%), Consumer Discretionary (+1.2%), Financials (+1.1%), Tech (+0.8%), Utilities (+0.8%), Health Care (+0.8%), Consumer Staples (+0.6%)
Declining Sectors: (None)DJ30 +129.35 NASDAQ +20.44 NQ100 +0.8% R2K +1.2% SP400 +1.3% SP500 +12.27 NASDAQ Adv/Vol/Dec 1867/2.04 bln/770 NYSE Adv/Vol/Dec 2283/1.10 bln/716

3:30 pm : It was another volatile session for commodities, as the dollar index fell sharply and pushed the CRB Commodity Index higher. All six commodities groups finished in positive territory today, led by grains (+3.2%) and energy (+1.9%). Dec corn rallied for 5% to close at $5.73 per bushel.

Dec crude oil settled higher by 2.9% to $82.52 per barrel. It rallied on weakness in the dollar index, strength in equities, and this morning's smaller-than-expected build in inventories. It closed just shy of its session highs at $82.58 per barrel. Nov natural gas finished up 0.2% to $3.54 per MMBtu after it sold off from around its highs in the close of pit trade.

Dec gold ended higher by 0.7% to $1344.20 per ounce, while Dec silver finished up 0.5% to $23.86 per ounce. Both metals managed to finish in positive territory after erasing overnight losses. DJ30 +155.65 NASDAQ +27.44 SP500 +15.35 NASDAQ Adv/Vol/Dec 1908/1.7 bln/696 NYSE Adv/Vol/Dec 2357/797.6 mln/635

3:00 pm : Just one hour remains before the closing bell will toll. As things currently stand, stocks are on track to completely erase the prior session's slide, which was the stock market's worst single-session slide by percent in about two months.

Share volume was strong in the prior session and is shaping up to be solid once again. At the current pace of trade share volume on the NYSE should surpass 1 billion. DJ30 +157.31 NASDAQ +27.66 SP500 +14.90 NASDAQ Adv/Vol/Dec 1902/1.54 bln/683 NYSE Adv/Vol/Dec 2365/738 mln/613

2:30 pm : Stocks had started to drift off of their session highs, but that gradual slide has since steadied so that the major equity averages continue to sport rich gains comfortably above 1%.

Financials are actually testing their session highs as they move to a collective gain of 1.4%. The sector had actually been down with a marked loss in the early going. DJ30 +163.52 NASDAQ +28.62 SP500 +15.71 NASDAQ Adv/Vol/Dec 1915/1.42 bln/678 NYSE Adv/Vol/Dec 2374/684 mln/604

2:00 pm : Stocks have slowly drifted off of their session highs, but commodities continue to climb, such that the CRB Commodity Index is now up 2.0%. That means that commodities, as a group, have basically erased all of their prior session slide.

The Fed's latest Beige Book was just released. Stocks haven't shown much reaction to the collection of anecdotal information from the various Fed Districts. DJ30 +151.03 NASDAQ +26.75 SP500 +14.67 NASDAQ Adv/Vol/Dec 1914/1.28 bln/658 NYSE Adv/Vol/Dec 2355/612 mln/618

1:30 pm : Stocks are steady at their session highs. Gains remain both broad and robust as all 10 major sectors reside in higher ground and eight of them are up in excess of 1% (financials and consumer discretionary stocks are up 0.7% and 0.8%, respectively).

Despite such strength in the stock market, Treasuries haven't been backed down. Specifically, the benchmark 10-year Note is actually up three ticks. DJ30 +161.10 NASDAQ +28.23 SP500 +15.65 NASDAQ Adv/Vol/Dec 1943/1.19 bln/612 NYSE Adv/Vol/Dec 2355/572 mln/592

1:00 pm : During the prior session stocks dropped markedly amid a big bounce by the greenback, but today the dollar is down and stocks have staged a strong rebound.

The U.S. dollar advanced 1.7% yesterday for its best move in two months, but it has since pulled back to trade with a 1.4% loss. Such renewed selling pressure suggests that the risk aversion trade has been switched off, at least for now.

Amid the greenback's sharp pullback, dollar-sensitive issues in the commodities and basic materials space have spiked to take the materials sector to a 2.5% gain, which is the best of any major sector.

Another big batch of generally better-than-expected earnings has complemented this session's strength. Yahoo! (YHOO 16.05, +0.56), United Technologies (UTX 73.95, +0.34), and Boeing (BA 70.76, +1.71) all posted upside surprises for the bottom line.

Airlines AMR Corp (AMR 7.12, +0.60), US Airways (LCC 10.82, +0.73), and Delta Air Lines (DAL 13.08, +1.38) also reported stronger-than-expected earnings. Collective strength among airline stocks has the Amex Airline Index up more than 5% to a near three-year high.

US Bancorp (USB 22.90, +0.09), Wells Fargo (WFC 25.80, +1.25), and BlackRock (BLK 169.87, -4.76) each reported an upside earnings surprise, but the financial sector had lagged in the early going as participants reacted negatively to a rather messy report from Morgan Stanley (MS 25.57, +0.18). Shares of MS were down more than 4% at their morning low, but they are now up almost 1%. Its turnaround has helped the financial sector, now up 1.3%, catch up with the broader market. Regional lender Comerica (CMA 35.01, -3.38) remains under stiff pressure after it came short of the consensus earnings estimate, though. DJ30 +158.14 NASDAQ +28.56 SP500 +15.89 NASDAQ Adv/Vol/Dec 1924/1.10 bln/610 NYSE Adv/Vol/Dec 2360/525 mln/578

12:30 pm : With stocks sporting impressive gains, volatility has taken a tumble -- specifically, the Volatility Index is down more than 4%.

While participants haven't exactly piled back into the market amid the rather dramatic swings this week, they havne't been sitting on the sidelines either. As such, trading volume is quickly coming up on a half billion shares on the NYSE. DJ30 +153.30 NASDAQ +30.04 SP500 +15.42 NASDAQ Adv/Vol/Dec 1913/1.00 bln/594 NYSE Adv/Vol/Dec 2315/482 mln/602

12:00 pm : Thanks to broader market support, shares of Western Digital (WDC 30.70, +0.50) have swung from an early loss to a strong gain. The company's better-than-expected earnings had been overshadowed by its rather tepid outlook. Still, shares of WDC aren't quite back to the multi-month highs that they set last week in response to word that Seagate Tech (STX 15.40, +0.15) was interested in going private.

Elsewhwere in the tech space, Cree (CREE 49.67, -3.33) is under stiff pressure. It also issued a weak forecast after it had posted a better-than-expected bottom line.

As a group, tech stocks are up 1.2%, just a bit better than the broader market. DJ30 +129.76 NASDAQ +26.54 SP500 +12.55 NASDAQ Adv/Vol/Dec 1890/880 mln/589 NYSE Adv/Vol/Dec 2263/428 mln/638

11:30 am : The major equity averages recently extended their advance to fresh session highs. The move hasn't quite put them back at the multi-month highs that they set on Monday, though.

Meanwhile, airline stocks are up sharply following better-than-expected earnings from AMR Corp (AMR 6.97, +0.45), US Airways (LCC 10.73, +0.64), and Delta Air Lines (DAL 12.67, +0.97). Collective strength among airline stocks has the Amex Airline Index up 4.0% to a near three-year high. DJ30 +135.10 NASDAQ +26.60 SP500 +13.34 NASDAQ Adv/Vol/Dec 1827/770 mln/601 NYSE Adv/Vol/Dec 2259/380 mln/607

11:00 am : Following a mild pullback, stocks have staged a strong climb that has taken the major indices to fresh session highs. The move coincides with a drop by the dollar, which is now down 1.4% to a fresh session low. The dollar's downturn this session nearly offsets its 1.7% gain during the prior session.

Dollar sensitive stocks continue to benefit from the greenback's pullback. As such, the materials sector isnow up 2.0%, which is better than any other major sector. DJ30 +111.75 NASDAQ +20.51 SP500 +10.24 NASDAQ Adv/Vol/Dec 1765/614 mln/620 NYSE Adv/Vol/Dec 2185/314 mln/653

10:30 am : November crude oil has been in positive territory almost all session and was near the $80 level ahead of inventory data. Weakness in the dollar index is also providing strength to crude, as well as most other commodities today. Following inventory data, which showed a build of 667 thousand barrels versus consensus of a build of 1.5 million, crude ticked modestly higher and is now at $ 80.30 per barrel, up 1%.

November natural gas spiked around 45 minutes ago to new session highs of $3.59 per MMBtu and is now 1.9% higher at $3.58 per MMBtu. The energy component has been in positive territory all session so far.

December gold pushed back into positive territory in recent trade and is now just above the unchanged line at $1338.40 per ounce. December silver has been in the red for the majority of today's session and is 1.7% lower at $23.74 per ounce.DJ30 +70.20 NASDAQ +8.17 SP500 +5.19 NASDAQ Adv/Vol/Dec 1488/444.0 mln/799 NYSE Adv/Vol/Dec 1960/232.2 mln/806

10:00 am : The S&P 500 has pulled back a bit since coming in contact with the 1174 line, which is just shy of where it closed last week's trade. That means that despite the gyrations of the past couple of sessions -- a 0.7% gain on Monday and a 1.6% drop on Tuesday -- stocks are still flat for this week.

Financials had mended their early losses and made their way to the neutral line, but sellers have since redoubled their efforts against the sector. Financials are now down 0.5%. However, during its conference call, BlackRock (BLK 172.51, -2.12), which posted better-than-expected earnings for its latest quarter, stated that the market's recent reaction to banks has been overdone in regard to concerns about mortgage put-backs.

Advancing Sectors: Materials (+1.2%), Energy (+1.0%), Telecom (+0.9%), Consumer Discretionary (+0.8%), Consumer Staples (+0.7%), Utilities (+0.7%), Health Care (+0.6%), Industrials (+0.5), Tech (+0.4%)
Declining Sectors: Financial (-0.5%)DJ30 +60.94 NASDAQ +10.07 SP500 +4.19 NASDAQ Adv/Vol/Dec 1548/302 mln/672 NYSE Adv/Vol/Dec 2032/162 mln/694

09:45 am : The major equity averages are up nicely in the first few minutes of trade. The move has come without any support from financials, though.

Financials are currently off by 0.2% as market participants dump shares of regional banks and investment banks and brokerages following an earnings miss from Comerica (CMA 35.41, -2.98) and Morgan Stanley (MS 24.79, -0.60).

In contrast, materials stocks are up more than any other sector as they sport a 1.2% gain. Most of that is owed to strength among diversified metals and miners (+1.8%) and steel stocks (+1.6%) after they slumped in the prior session. A 0.8% drop by the greenback has helped the dollar-sensitive sector. DJ30 +70.01 NASDAQ +14.18 SP500 +7.50 NASDAQ Adv/Vol/Dec 1683/196 mln/491 NYSE Adv/Vol/Dec 2182/112 mln/509

09:15 am : S&P futures vs fair value: +4.50. Nasdaq futures vs fair value: +8.00. Stock futures continue to come down from their premarket highs so that only modest gains are expected at the open. Waning support comes in the face of another big batch of better-than-expected earnings -- only one in every five companies covered by Briefing.com since the prior session's close has failed to exceed what Wall Street had expected. As for the dollar, it continues to contend with sellers and remains near its morning low with a 0.6% loss.

09:05 am : S&P futures vs fair value: +3.70. Nasdaq futures vs fair value: +7.00. The CRB Commodity Index tumbled 1.9% in the prior session for its worst single-session loss since June. It has since bounced back to a 0.4% gain in this morning's action. In the first few minutes of pit trade oil prices are up 0.4% to $79.85 per barrel. Weekly oil inventory data is due at 10:30 AM ET. Natural gas prices are up 0.9% to $3.54 per MMBtu. Precious metals are mixed, though. More specifically, gold prices are up 0.4% to 1341.00 per ounce and silver priecs are down 0.6% to $23.64 per ounce.

08:35 am : S&P futures vs fair value: +4.80. Nasdaq futures vs fair value: +8.30. Futures for the S&P 500 have come down from their morning highs, but they continue to sport a lead over fair value. Meanwhile, Germany's DAX has managed to put together a 0.2% gain after starting its latest session in the red. Infineon Tech has been a leader in the move, but Bayer AG has been a drag. According to data, Germany's PPI increased 0.3% in September after no net change in August. France's CAC has climbed to a 0.5% gain after it also started the session in the red. Societe Generale, BNP Paribas, and ArcelorMittal (MT) have helped the advance, which has given gainers a 2-to-1 advantage over declining issues. Declining issues still have a slight edge over advancing issues in Britain's FTSE, but the Index has still mustered a fractional gain. Metals and mining plays have been primary leaders. As such, Rio Tinto (RTP), Anglo American, and BHP Billiton (BHP) are out in front of the broader market. According to data, BHP Billiton's quarterly production of iron ore increased 6% and petrol products increased 3%. Separately, the euro has staged a strong rebound since sustaining a deep slide in the prior session; the euro is currently up 0.9% against the dollar.

In Asia, Japan's Nikkei dove 0.9% overnight as 90 of its components succumbed to selling. Fanuc LTD, Fast Retailing, and Kyocera (KYO) were among the worst performers. Toshiba and Nippon Soda showed some resilience, though. Japan's yen made a move higher so that it is now up 0.4% against the greenback. Following an announcement yesterday that interest rates in China will be increased by 25 basis points the Shanghai Composite surrendered early gains, but still mustered a 0.1% gain. China Life Insurance, Ping An Insurance, and China Pacific provided leadership amid the view that insurers will outperform in an environment that features rising rates aimed at containing inflation. PetroChina (PTR), China Petroleum (SNP), and Industrial & Commercial Bank were laggards. In Hong Kong, the Hang Seng fell 1.7%. The drop came amid weakness in heavyweights CNOOC (CEO), HSBC (HBC), and China Mobile. China Life Insurance offered the most support.

08:05 am : S&P futures vs fair value: +5.80. Nasdaq futures vs fair value: +11.00. Stock futures point to a modest rebound from the prior session's selloff, which brought stocks their worst single-session loss in about two months. The improved tone has been helped by renewed weakness in the dollar, which was last quoted with a 0.7% loss against competing currencies. Another blitz of earnings announcements has hit newswires. Among the more widely held names that recently reported, Yahoo! (YHOO) bested on the bottom line, but issued a weak forecast. Dow components United Technologies (UTX) and Boeing (BA) both posted upside earnings surprises and improved their outlooks. Morgan Stanley (MS) actually missed the consensus earnings estimate by a relatively wide margin, but regional lenders US Bancorp (USB) and Wells Fargo (WFC) both posted better-than-expected earnings. The Fed's Beige Book is the only item on today's economic calendar. It is scheduled for release at 2:00 PM ET.

07:15 am : S&P futures vs fair value: +6.70. Nasdaq futures vs fair value: +11.00.

07:15 am : Nikkei...9381.60...-157.90...-1.70%. Hang Seng...23556.50...-207.20...-0.90%.

07:15 am : FTSE...5722.39...+18.60...+0.30%. DAX...6510.01...+19.30...+0.30%.

Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Only Trading (no indicators)
Image@ http://twitter.com/wrbtrader and http://stocktwits.com/wrbtrader

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