TheStrategyLab.com Price Action Trading Support Forum

Trade Results of M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)


click on the above image to view today's performance verification

Trade Performance for Today: +22.40 points or $2240 dollars in the Russell 2000 Emini TF ($TF_F) Futures.
Russell 2000 Emini TF Futures - 1 tick or 0.10 = $10.00 dollars and there's more contract information @ The ICE.
S&P 500 Emini ES Futures - 1 tick or 0.25 = $12.50 dollars and there's more contract information @ CMEGroup.

In addition, all trades were posted real-time in the free #FuturesTrades chat room. Today's #FuturesTrades trading chat room logs provides details (e.g. time, price, contract size) about each one of my trades from entry to exit along with price action commentary as the trade traversed...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=100&t=1114.

To join our free chat room...registration instructions located at a different forum @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=5&t=630

Also, posted below are direct links to information about my trade methodology and trading plan (there's a difference between the two) 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/bar analysis).

WRB Analysis Tutorials @ http://www.thestrategylab.com/WRBAnalysisTutorials.htm and there's a free study guide of the WRB Analysis Tutorial Chapters 1, 2 and 3 @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=119&t=718.

Volatility Trading Report (VTR) @ http://www.thestrategylab.com/VolatilityTrading.htm and there's a free trade signal strategy @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=89 so that you can freely test drive one of our trade strategies with support prior to purchasing the Volatility Trading Report (VTR).

Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=148&t=1341

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Market Summaries

The below summaries by Bloomberg, CNNMoney and Yahoo! Finance helps me to do a quick review of the fundamentals, FED/ECB/IMF actions or any important global economic events that had an impact on today's price action. Simply, I'm a strong believer that many variables (key market events) causes key changes in supply/demand and volatility that results in swing points and strong continuation price actions. Thus, I pay attention to these key market events from one trade to the next trade to give me the market context for my technical analysis. Just as important, these summaries becomes my archives to allow me to understand what was happening on any given trading day in the past...something I can not get from my broker statements alone.

U.S. Stocks Fall Amid Europe Concern as JPMorgan Drops

Jan. 13 (Bloomberg) -- Bloomberg's Cali Carlin reports on the performance of the U.S. equity market today. U.S. stocks retreated, snapping a four-day rally for the Standard & Poor's 500 Index, as euro-region governments braced for credit downgrades by S&P and after JPMorgan Chase & Co.'s profit slumped 23 percent.

Stocks Slump On Eurozone Downgrade Fears


click on the above image to view today's price action of key markets

NEW YORK (CNNMoney) -- U.S. stocks finished in the red Friday as anxious investors braced for a string of credit rating downgrades for eurozone countries.

JPMorgan Chase's disappointing fourth-quarter earnings also weighed on the market.

The Dow Jones industrial average (INDU) dropped 49 points, or 0.4%, the S&P 500 (SPX) fell 6 points, or 0.5%, and the Nasdaq composite (COMP) lost 14 points, or 0.5%.

While solid demand at recent debt auctions in Italy and Spain calmed some investors, chatter that S&P could downgrade several eurozone countries at some point Friday sparked a fresh bout of worries.

Though S&P has yet to officially announce the move, French finance minister Francois Baroin, speaking to France 2 Television, confirmed later Friday that France's "AAA" credit rating will be lowered one notch to "AA+" by the ratings agency.

Last month, the S&P put 15 members of the euro currency union, including top-rated Germany and France, on review for a rating cut. The Reuters report, citing a "senior eurozone source," said Germany would not be among the downgraded countries.

Europe braces for S&P downgrades

While the market has been anticipating S&P's downgrades given the rating agency's warning, the actual news is still a harsh reminder for investors who have grown optimistic about Europe moving toward a solution.

"Investors have been getting more confident, and the market has had some positive momentum on hopes that Europe is making some headway," said Chris Kichurchak, vice president at Strategic Wealth Partners. "The downgrades would bring us back to the reality that the financial world is a messed-up place right now."

Investors were also on edge after lackluster earnings from JPMorgan Chase, the first of the big Wall Street banks to deliver fourth-quarter results.

JPMorgan Chase (JPM, Fortune 500) shares fell 2.5%, after the bank announced it earned 90 cents per share in the fourth quarter, down from $1.12 a year earlier.

In a statement, CEO Jamie Dimon called the results "disappointing," but said JPMorgan sees "see signs of improvement in loan demand and credit quality" going forward.

Investors will be tuning into a slew of bank earnings next week. Wells Fargo (WFC, Fortune 500) and Citigroup (C, Fortune 500) are scheduled to report their earnings on Tuesday. Goldman Sachs (GS, Fortune 500) reports on Wednesday, and Bank of America (BAC, Fortune 500) and Morgan Stanley (MS, Fortune 500) weigh in on Thursday.

"The idea was that we could be seeing a bounce-back in the financial sector, so the JPMorgan earnings are a bit setback," said Kichurchak. "I think we could see more banks fall short."

Financial stocks were under pressure Friday, with JPMorgan and Bank of America posting the worst losses on the Dow.

Stocks managed to close slightly higher Thursday, despite a choppy day of trading.

Despite Friday's losses, stocks finished higher for a second straight week. The Dow rose 0.5%, the S&P 500 gained 0.9% and the Nasdaq spiked 1.4%.

* Lure to leave the euro may prove irresistible

World markets: European stocks closed slightly lower, amid downgrade concerns. Britain's FTSE 100 (UKX) fell 0.5%, the DAX (DAX) in Germany dropped 0.6% and France's CAC 40 (CAC40) shed 0.1%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) lost 1.3%, while Japan's Nikkei (N225) gained 1.4% and the Hang Seng (HSI) in Hong Kong added 0.6%.

Companies: Novartis (NVS) shares fell after the pharmaceutical company announced it is restructuring its U.S. business -- a move that will result in 1,960 job cuts.

The company said the restructuring will lead to a charge of $160 million in the first quarter of 2012, and an annual savings of approximately $450 million by 2013.

* Video - Was Bain a job killer under Romney?

Economy: The government said the nation's trade gap widened in November to $47.75 billion. Analysts surveyed by Briefing.com expected the deficit to stand at $44 billion.

December import prices slid 0.1%, while export prices were down 0.5%.

The University of Michigan also reported that its Consumer Sentiment Index for the month of January rose to 74 from 69.9 in December. Economists were expecting the index to rise to 71.2.

Currencies and commodities: The euro fell to a 17-month low against the dollar to around $1.26. The dollar also rose against the British pound and the Japanese yen.

Oil for February delivery fell 40 cents to settle at $98.70 a barrel.

Gold futures for February delivery fell $16.90 to settle at $1,630.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.85% from 1.93% late Thursday.



Market Update

4:10 pm : Concerns about sovereign debt downgrades stirred sellers on Friday, but stocks were able to cut losses. That ensured the broad market a modest weekly gain of about 1%. Stocks slid to a loss in excess of 1% this morning. The descent came in response to headlines that downgrades could be in store for several eurozone countries. France actually confirmed that analysts at S&P made a single-notch downgrade to the country's credit rating. That decision contradicted word earlier this week that analysts at Fitch expect France to keep its top-notch credit rating in 2012.

Banking bellwether and Dow component JPMorgan Chase (JPM 35.84, -0.98) reported disappointing quarterly results this morning. It made for a lackluster follow-up to the unceremonious start that earnings season made earlier this week when fellow blue chip Alcoa (AA 9.80, -0.13) posted a mixed report. The financial sector suffered all session as most other diversified banks and financial services stocks traded lower in sympathy.

Not a single sector scored a gain on Friday, but shares of many retailers were helped higher by the latest Consumer Sentiment Survey from the University of Michigan. It improved from 69.9 in December to 74.0 in the preliminary reading for January. Not only did that best the Briefing.com consensus call for a reading of 71.2, but it marked the highest reading since May 2011.

The euro had a volatile week before it suffered a sharp slide on Friday. The currency ended the day at $1.2681, which makes for a -1.1% loss.

Prior to Friday participants were dealt a sizable dose of data after being deprived from such catalysts for a few days. Retail sales during December increased 0.1%, while sales less autos fell 0.2%. Both came short of what had been expected, but prior month sales were revised upward. Economists noted that sales weakened while aggregate earnings increased, likely since consumer debt remains a hindrance for current consumption.

Initial weekly jobless claims made an unexpected jump to 399,000 from 375,000, which is where many had expected them to remain. Initial claims have steadily increased over the past few weeks, but the latest increase is likely due to disappointing December retail sales resulting in staffing cuts.

After the European Central Bank (ECB) and Bank of England opted to keep interest rate targets at 1.00% and 0.5%, respectively, ECB President Draghi offered a reminder of the substantial downside risks to regional economic activity. Although the nature of the comments was unsurprising, Draghi's words cast a pall over news that recent debt offerings from both Spain and Italy were successful.

Midweek trade was mostly listless and lackluster, a consequence of little news flow. The only economic item was the Fed's Beige Book. Once again it made mention of a modest increase in economic activity, but did nothing to assuage concerns about the pace of the economic recovery.

Tuesday saw stocks jump in response to robust gains staged by many of the major averages abroad. Investors gained confidence from word that analysts at Fitch believe both France and Germany will maintain their top-notch credit ratings in 2012. Meanwhile, some believe that China might ease monetary policy so as to hedge against disruptions to the country's economy.

Trade on Monday was generally uneventful as market participants prepared for the unofficial start of earnings season. It got going when Alcoa (AA) announced quarterly results after the close. The Dow component posted a strong top line, but its earnings came short of what Wall Street had expected.

The pace of earnings announcements will pick up next week, but traders will have to wait an extra day since U.S. markets will be closed on Monday in observance of Martin Luther King, Jr. Day.

Treasury Auction recap: Results from an auction of 3-year Notes featured a bid-to-cover of 3.73, dollar demand of $119.4 billion, and an indirect bidder rate of 38.5%. For comparison, the prior auction featured a bid-to-cover of 3.62, dollar demand of $115.8 billion, and an indirect bidder rate of 39.1%. An average of the past six auctions results in a bid-to-cover of 3.33, dollar demand of $106.6 billion, and an indirect bidder rate of 38.9%. An auction of 10-year Notes drew a bid-to-cover ratio of 3.29, dollar demand of $69.1 billion, and an indirect bidder rate of 38.3%. For comparison, an average of the past six auctions results in a bid-to-cover of 3.08, dollar demand of $66.2 billion, and an indirect bidder rate of 44.0%. An auction of 30-year Bonds drew a bid-to-cover of 2.60, dollar demand of $33.8 billion, and an indirect bidder participation rate of 31.9%. For comparison, an average of the previous six auctions results in a bid-to-cover of 2.69, dollar demand of $37.2 billion, and an indirect bidder rate of 29.8%.DJ30 -48.96 NASDAQ -14.03 SP500 -6.41 NASDAQ Adv/Vol/Dec 796/1.63 bln/1676 NYSE Adv/Vol/Dec 1062/827 mln/1972

3:30 pm : Crude oil prices fell $0.29 to $98.68 per barrel. They had been as low as $97.70 per barrel. The slide by natural gas became less steep as the energy component shed $0.03 to settle at $2.67 per MMBtu.

Precious metals were caught up in today's slide. Specifically, gold prices shed $16.60 to settle pit trade at $1631.10 per ounce. Its session low was set at $1625.70 per ounce. Silver prices sank $0.64 to settle at $29.48 per ounce. Its session low was set at $29.42 per ounce.

Overall weakness in the commodity complex took the CRB Index down 0.7%. It shed 0.6% this week. DJ30 -60.77 NASDAQ -14.53 SP500 -7.28 NASDAQ Adv/Vol/Dec 775/1.29 bln/1705 NYSE Adv/Vol/Dec 1005/500 mln/2000

3:00 pm : The major equity averages are testing their rebound highs, which were set just before midday as stocks worked their way up from the session lows that were set in the first hour of trade. The effort is likely being hampered by the lack of leadership displayed by stocks all session.

Only one hour remains before domestic traders take off for a long, holiday weekend -- U.S. markets will be closed on Monday in observance of Martin Luther King, Jr. Day. DJ30 -81.66 NASDAQ -18.53 SP500 -9.34 NASDAQ Adv/Vol/Dec 705/1.20 bln/1750 NYSE Adv/Vol/Dec 920/465 mln/2100

2:30 pm : Stocks have resumed their upward trend, although the path has had only a moderate incline. The major equity averages remain shy of their session high.

Share volume remains modest. The lack of participation comes as many traders settle their positions ahead of the long, holiday weekend. Some traders may also be sitting on the sidelines due to uncertainty related to how stocks might react if widely rumored stories of sovereign debt downgrades in Europe come to fruition. Analysts at S&P have in the past announced downgrades on Friday afternoons that precede long weekends so as to allow global markets to spend the weekend reflecting on the news. DJ30 -90.97 NASDAQ -18.79 SP500 -9.97 NASDAQ Adv/Vol/Dec 655/1.08 bln/1780 NYSE Adv/Vol/Dec 825/425 mln/2165

2:00 pm : A recent flurry of stocks helped stocks pop higher, but there really hasn't been any follow through buying to take stocks up to session highs. Instead, the major equity averages continue to trade with losses of almost 1%.

The pace of trade has begun to slow. That's typical considering that a long, holiday weekend begins tomorrow (U.S. markets will be closed on Monday in observance of Martin Luther King, Jr. Day) and market participants have already received all of the earnings announcements and economic releases officially scheduled for today. DJ30 -97.25 NASDAQ -21.46 SP500 -10.98 NASDAQ Adv/Vol/Dec 595/1.0 bln/1835 NYSE Adv/Vol/Dec 760/400 mln/2230

1:30 pm : Treasuries continue to trade with strength. In fact, the bounce by the benchmark 10-year Note has taken its yield down to a near four-week low of slightly less than 1.85%. That's almost 20 basis points below its monthly high, which was set little more than two weeks ago.DJ30 -123.51 NASDAQ -25.76 SP500 -13.73 NASDAQ Adv/Vol/Dec 595/860 mln/1815 NYSE Adv/Vol/Dec 765/340 mln/2195

1:00 pm : Stocks are up from session lows, but remain stuck in negative territory, where they've been all session.

Sellers hit stocks right at the open. Their efforts were largely driven by headlines that downgrades could be in store for several eurozone countries. That threat has also weighed heavily on the euro, which is down in excess of 1% against the greenback today.

Market participants have also been disappointed by a weak quarterly report from banking bellwether JPMorgan Chase (JPM 35.58, -1.27), which has forfeited virtually all of the gains that it had achieved in the days leading up to its announcement. Shares of most other diversified banks and financial services players are trading lower in sympathy, resulting in a 1.4% loss for the financial sector.

Although there isn't a single sector that has come close to touching positive territory, shares of retailers are displaying strength after a preliminary consumer sentiment survey for January proved better than expected. Apparel and accessories retailers are among the group's better performers. DJ30 -103.76 NASDAQ -22.08 SP500 -11.72 NASDAQ Adv/Vol/Dec 595/860 mln/1815 NYSE Adv/Vol/Dec 765/340 mln/2195

12:30 pm : The stock market's loss of upward momentum has invited renewed selling pressure, which has caused the major averages to start retracing their recent rebound.

The euro also continues to contend with stiff selling pressure, which has left the currency to trade at $1.266, or with a 1.2% loss against the greenback.

Weakened sentiment in the stock market and a stronger dollar have put pressure on the commodity complex, such that the CRB Index is down 0.7%. DJ30 -108.23 NASDAQ -22.94 SP500 -12.20 NASDAQ Adv/Vol/Dec 590/780 mln/1780 NYSE Adv/Vol/Dec 785/310 mln/2155

12:00 pm : Momentum behind the market's recent rebound has slowed, leaving stocks to continue contending with sizable losses. Although this is shaping up to be one of the week's worst sessions, the loss is currently not enough to fully offset the stock market's modest weekly gain.

Leadership is lacking once again -- listlessness has been a frequent theme of trade this week. As such, there isn't a single sector that has managed to come within reach of positive territory today.

That said, shares of several retailers are displaying strength in the face of broad market weakness. The group's advance comes in the wake of a better-than-expected consumer sentiment survey for January from the University of Michigan. Gap (GPS 18.30, +0.16), Kohl's (KSS 47.20, +0.79), and Urban Outfitters (URBN 25.15, +0.60) are among the best performers in the space. DJ30 -101.71 NASDAQ -20.83 SP500 -11.32 NASDAQ Adv/Vol/Dec 615/695 mln/1750 NYSE Adv/Vol/Dec 830/275 mln/2100

11:30 am : Stocks have extended their rebound, but continue to contend with sizable losses. Although selling has become less intense and some participants are showing a willingness to scoop up stocks, weakness remains widespread in that all 10 major sectors are still in the red.

With stocks stuck in negative territory Treasuries are attracting strong support. The benchmark 10-year Note is currently up about a half of a point, which is enough to take its yield a few basis points below 1.90%. DJ30 -88.02 NASDAQ -17.72 SP500 -9.57 NASDAQ Adv/Vol/Dec 520/595 mln/1790 NYSE Adv/Vol/Dec 740/240 mln/2165

11:00 am : Stocks recently dropped another leg down to set new session lows, but have since managed to retrace the move so that they are now near the levels set with the market's opening gap down.

Even financials are getting some relief. The sector was recently down about of 2.5%, but it now trades with a 1.4% loss. That's still worse than what any other sector has suffered, however. DJ30 -109.17 NASDAQ -24.84 SP500 -11.83 NASDAQ Adv/Vol/Dec 420/445 mln/1850 NYSE Adv/Vol/Dec 595/190 mln/2285

10:35 am : The dollar index surges to a new session high, pushing a number of commodities to new session lows such as crude and precious metals.

Feb crude oil continues to extend losses and fell to a new session low of $97.72 in recent trade. In current activity, crude is down 1.1% at $98.02/barrel. Feb natural gas extended yesterday's losses in the overnight session and fell as low as $2.65/MMBtu. In recent trade, nat gas has managed to move back to the unchanged line.

Feb gold and March silver have also fallen to new session lows (gold $1625.70, silver $29.42) on the recent surge in the dollar index. Silver remains below the $30 mark and is now trading 1.6% lower at $29.64/oz. Gold has rebound slightly and is now down.0% at $1631.40/oz.DJ30 -133.58 NASDAQ -28.58 SP500 -14.57 NASDAQ Adv/Vol/Dec 431/426 mln/1842 NYSE Adv/Vol/Dec 608/188 mln/2270

10:00 am : Selling pressure has steadied, at least for the time being. All 10 major sectors remain in negative territory with losses that are modest to sizable.

Minutes ago the University of Michigan released its preliminary Consumer Sentiment Survey for January. It improved to 74.0 from 69.9 in the prior month. That exceeded the 71.2 that had been expected, on average, among economists surveyed by Briefing.com. DJ30 -96.42 NASDAQ -16.10 SP500 -10.02 NASDAQ Adv/Vol/Dec 365/115 mln/1775 NYSE Adv/Vol/Dec 510/75 mln/2200

09:45 am : Stocks are down with sizable losses in the early going. The slide has actually taken the S&P 500 below the initial support levels that had provided a floor for stocks to rebound from during the prior session's trade.

Financials had outperformed in the first part of the week, but they are under some of the sharpest pressure this morning. The sector's 1.7% decline follows a disappointing quarterly report from JPMorgan Chase (JPM 35.66, -1.19). Shares of JPM are down more than 3% as sellers respond to the bank's top and bottom line results. DJ30 -119.73 NASDAQ -20.77 SP500 -11.88 NASDAQ Adv/Vol/Dec NA/NA/NA NYSE Adv/Vol/Dec NA/NA/NA

09:15 am : S&P futures vs fair value: -10.10. Nasdaq futures vs fair value: -11.80. Stock futures have come under increased pressure with the approach of the open. The increase in selling interest coincides with a drop by the euro, which is now down 0.9% against the greenback and on pace for a slight weekly loss. Alongside the euro, Europe's bourses are also coming under increased pressure after they had traded with varied gains following another successful debt sale by Italy and some decent data from the region. Recent headlines about the possibility of downgrades on several eurozone countries are likely culprits. Earnings news has been limited to a disappointing report from JPMorgan Chase (JPM 35.45, -1.40) while the latest data doses are limited to some uninspiring trade numbers. Still to come, though, is the latest survey on consumer sentiment from the University of Michigan at 9:55 AM ET. Note: all ticker quotes reflect premarket prices.

09:05 am : S&P futures vs fair value: -8.30. Nasdaq futures vs fair value: -9.30. Commodities are experiencing varied selling pressure this morning. That has the CRB Index down 0.5%. Among its more closely tracked components, oil prices are down 0.9% to $98.22 per barrel. Meanwhile, natural gas prices are down 0.3% to $2.73 per MMBtu. As for precious metals, gold prices are down 0.6% to $1638 per ounce, but silver prices are down an even steeper 1.5% to $29.69 per ounce.

08:35 am : S&P futures vs fair value: -4.20. Nasdaq futures vs fair value: -2.30. Stock futures are little changed from earlier levels, despite the release of a couple of doses of data. The trade deficit grew to $47.8 billion in November from $43.3 billion in the prior month. A smaller increase to $44.0 billion had been expected, on average, among economists surveyed by Briefing.com. Separately, import prices during December increased by 0.1% after a 0.2% decline in the prior month. Export prices for December, excluding agricultural items, slipped by 0.2%, just as they did in the prior month. Still on the calendar is the latest consumer sentiment reading from the University of Michigan at 9:55 AM ET.

08:05 am : S&P futures vs fair value: -3.40. Nasdaq futures vs fair value: -1.00. Although the euro is down against the dollar, a generally positive posture to overseas trade has offered a supportive backdrop to action at home this morning. However, a disappointing quarterly report from JPMorgan Chase (JPM 35.82, -1.03), which usually represents a yardstick for other major banks, has offset positive sentiment associated with action abroad. Although there are no other major earnings announcements on tap for today, market participants get a few doses of data this morning. International trade data and import price information are due at the bottom of the hour. A reading on consumer sentiment from the University of Michigan will be released at 9:55 AM ET. Note: ticker quotes reflect premarket prices.

06:33 am : [BRIEFING.COM] S&P futures vs fair value: +0.50. Nasdaq futures vs fair value: +3.00.

06:33 am : Nikkei...8500.02...+114.40...+1.40%. Hang Seng...19204.42...+109.00...+0.60%.

06:33 am : FTSE...5679.10...+16.70...+0.30%. DAX...6213.89...+34.90...+0.60%.

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

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

Phone: +1.708.572.4885
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