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 Post subject: January 8th Wednesday Trade Results - Profit $2720.00
PostPosted: Wed Jan 08, 2014 10:01 pm 
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Joined: Sat Jan 10, 2009 1:06 pm
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Trade Results of M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)
Phone: +1 708 572-4885
Free Chat Room: http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164
Business Hours: 8am - 5pm est (Mon - Fri)
questions@thestrategylab.com (24/7)
http://twitter.com/wrbtrader (24/7)

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

Price Action Trade Performance for Today: Emini TF ($TF_F) futures @ $1,750.00 dollars or +17.50 points, Emini ES ($ES_F) futures @ $1,250.00 dollars or +25.00 points, Light Crude Oil CL ($CL_F) futures @ ($280.00) dollars or -0.28 points, Gold GC ($GC_F) futures @ $0.00 dollars or +0.00 points and EuroFX 6E ($6E_F) futures @ $0.00 dollars or +0.0000 ticks. Total Profit @ $2,720.00 dollars.

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
Light Crude Oil CL (WTI) Futures: 1 tick or 0.01 = $10.00 dollars and there's more contract information @ CMEGroup
Gold GC Futures: 1 tick or 0.10 = $10.00 dollars and there's more contract information @ CMEGroup
EuroFX 6E Futures: 1 tick or 0.0001 = $12.50 dollars and there's more contract information @ CMEGroup

In addition, all of my trades were posted real-time in the chat room. You can read today's chat room logs for details about each one of my trades via price action trading from entry to exit (e.g. time, price, contract size) along with price action commentary as the trade traversed to its completion...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=126&t=1693

Also, posted below are direct links to information about my price action 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). I'm primarily a day trader because it suits my personal lifestyle but I do occasionally swing trade and position trade. Simply, my trade method is applicable for position trading, swing trading and day trading.

Image ##TheStrategyLab Chat Room is free. Members and I use the chat room to post WRB Analysis commentary, real-time trades and to post anything else related to trading. The chat room helps me tremendously in my own trading because I use it to document (journal) my thought process from trade to trade so that I can easily review at a later date my thoughts as I interacted with the markets...info I can not get from my broker statements. Also, this is not a signal calling chat room where a head trader tells you when to buy or sell. If you join the chat room and then you do not ask any questions about WRB Analysis in your own trading...the chat room will not be useful to you. Chat room access instructions @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164

Image Price Action Analysis via 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

Image Trade Signal Strategies via 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 price action trade strategies with support (answering your questions) prior to purchasing the Volatility Trading Report (VTR).

Image Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=229&t=2165

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Market Context Summaries

The below summaries by Bloomberg, CNNMoney, Reuters and Yahoo! Finance helps me to do a quick review of the fundamentals, FED/ECB/BOE/IMF actions or any important global economic events (e.g. Eurozone, MarketWatch.com) that had an impact on today's price action in many trading instruments I monitor during the trading day. Simply, I'm a strong believer that key market events causes key changes in supply/demand and volatility resulting in trade opportunities (swing points and strong continuation price actions) that reach profit targets. Thus, I pay attention to these key market events, intermarket analysis (e.g. Forex EurUsd, EuroFX 6E futures, Gold GC futures, Light Crude Oil (WTI) CL & Brent Oil futures, Eurex DAX futures, Euronext FTSE100 futures, Emini ES futures, Emini TF futures, Treasury ZB futures and U.S. Dollar Index futures) while using WRB Analysis from one trade to the next trade to give me the market context for price action trading before the appearance of my technical analysis trade signals. Therefore, I maintain these archives to allow me to understand what was happening on any given trading day in the past involving key market events to help better understand my trade decisions (day trading, swing trading, position trading)...something I can not get from my broker statements alone.

Stocks Mixed As Investors Await Jobs Report

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

NEW YORK (CNNMoney)
So much for a two-day winning streak. Stocks finished Wednesday mixed, as investors mulled over the minutes from last month's Federal Reserve meeting and waited for Friday's all-important December jobs report.

The Dow lost almost 70 points, while the Nasdaq was a bit higher and the S&P 500 finished flat. The muted trading came a day after the S&P 500 and Nasdaq logged their first gains of 2014 and the Dow had its first triple-digit point rise of the year.

CNNMoney's new Tech 30 index was flat. BlackBerry (BBRY) shares rose once again, after surging the past two trading days. The stock is up more than 14% this year, making it the top performer in the index. Chinese tech companies Baidu (BIDU) and Sina (SINA) also were big gainers in the index.

Investors and traders were eager to look over the latest Fed minutes, since they covered the meeting when the central bank decided to start cutting its massive economic stimulus program. Many Wall Street experts expect the stimulus program will be wrapped up by the end of 2014.

The Fed minutes did not reveal anything shocking though. The main takeaway was that the central bank wants to move "cautiously" with its plans to taper its bond buying.

Meanwhile, investors were also on hold ahead of the December jobs report due on Friday. Data from payroll processor ADP (ADP, Fortune 500) showed that private sector hiring gained momentum in December, an encouraging sign ahead of the Labor Department's closely-watched report.

The yield on the 10-year Treasury note crossed the 3% mark Wednesday before pulling back, possibly in anticipation that strong jobs data will lead the Fed to speed up its scaling back of stimulus.

* Check out CNNMoney's new Tech 30 index

In corporate news, shares of Bed Bath and Beyond (BBBY, Fortune 500)tumbled 9% in after-hours trading after the home goods giant reported earnings that were below analyst estimates.

J.C. Penney (JCP, Fortune 500) shares plunged after the troubled retailer released a short and vague statement about its sales performance during the key holiday season. J.C. Penney said it was "pleased" with its sales, but failed to release specific figures. The lack of details caused concern among the retailer's investors, who have been betting on progress in the company's turnaround efforts.

"$JCP If the company is not even going to publish its numbers for the holiday season... what do you think the future holds?" asked StockTwits trader ur_realityCheck.

But StockTwits user shavitmi thought the stock's 8% slide was an "over reaction!!!! $JCP."

Yelp (YELP) was also a hot topic on StockTwits, as shares of the online review company soared over 8% to new all-time highs. But following Yelp's 266% run-up in 2013, some traders wondered if the stock has come too far too fast.

"$YELP Restaurant Review site up 9% all time high...," noted Lach14, "No Bubble Here right? All fundamentals."

Some traders noted that part of the climb may be due to a phenomenon called a short squeeze. Shares of Yelp are heavily shorted, meaning that buyers have borrowed the stock on a bet that its price will fall. If the stock keeps going up, the short seller have to rush to buy it back in order to avoid huge losses.

"I could see $YELP closing in the 80s today," said UselessRubbish. "Its held its gains all day so far and there are still more shorts to cover."

"$YELP 2014 continues the 2013 year of the #SUPERSQUEEZE," said ms101.

Shares of Ford (F, Fortune 500) rose after the automaker said late Tuesday that CEO Alan Mulally is not leaving the company for Microsoft (MSFT, Fortune 500). Shares of Microsoft were lower.

Constellation Brands (STZ) surged after the wine, beer and spirits company reported strong earnings for its most recent quarter and boosted its outlook for the year.

Agrochemical giant Monsanto (MON, Fortune 500) shares were also higher following better-than-expected quarterly earnings and sales.

Revenue figures were disappointing from The Container Store (TCS), sending shares of the retailer sharply lower.

Micron Technology (MU, Fortune 500) shares surged following quarterly earnings that beat expectations.

* Marissa Mayer reveals Yahoo's big plans for 2014

Yahoo (YHOO, Fortune 500) rose to a multi-year high, a day after CEO Marissa Mayer touted some of the company's new products at the Consumer Electronics Show in Las Vegas.

Pot stocks were one again in focus following their big rally on Tuesday as the business of legal marijuana begins booming in states like Colorado. Shares of Hemp. Inc. (HEMP) and GreenGro (GRNH) were up sharply for a second day. But Medbox (MDBX), which surged more than 80% Tuesday, had an extremely volatile day Wednesday. Shares tumbled over 28% in afternoon trading after starting the day up more than 25%.

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4:10 pm: [BRIEFING.COM] The major averages ended the Wednesday session on a mixed note as the Nasdaq added 0.3%, the Dow shed 0.4% while the S&P 500 essentially split the difference, ending flat.

Equity indices began the session on a lower note, but the Nasdaq and S&P 500 staged swift rallies to new highs. The two indices hovered near their best levels of the session for the remainder of the trading day, but tested their lows during the final hour. For its part, the Dow Jones Industrial Average was unable to eclipse its morning high as 20 of its 30 components registered losses.

Prior to the open, it was reported that private sector employment increased by 238,000 in December while the Briefing.com consensus expected a reading of 203,000. The strong report was received by the bond market as a sign suggesting the Fed could engage in additional tapering sooner rather than later. On that note, the December FOMC minutes revealed that some officials saw "waning benefits" from monthly bond purchases. Furthermore, some members wanted to see a quicker end to the asset purchasing program. Treasuries settled near their lows with the 10-yr yield up five basis points at 3.00%.

Six of ten sectors ended in the red with rate-sensitive consumer staples (-0.7%), telecom services (-1.7%), and utilities (-0.6%) leading the slide as higher yields weighed. The fourth defensive sector-health care (+0.9%)-finished in the lead with help from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 231.58, +4.65) jumped 2.1%, also contributing to the outperformance of the Nasdaq.

Outside of health care, financials (+0.3%), materials (+0.6%), and technology (+0.1%) were the only other advancers. The materials sector received support from chemical producers after Monsanto (MON 115.23, +2.12) beat on earnings and revenue.

Elsewhere, the technology sector ended flat with its relative strength providing a boost to the Nasdaq. Chipmakers rallied broadly after Micron (MU 23.86, +2.13) beat on earnings and revenue. Micron soared 9.9% while the broader PHLX Semiconductor Index rose 1.6%.

On the downside, the energy sector (-0.7%) was the weakest cyclical group as crude oil fell 1.4% to $92.32/bbl.

Today's session saw the most activity since December 20 as 743 million shares changed hands on the floor of the New York Stock Exchange.

Tomorrow, the December Challenger Job Cuts report will be released at 7:30 ET while weekly initial claims will be reported at 8:30 ET.

Nasdaq -0.3% YTD
Russell 2000 -0.4% YTD
S&P 500 -0.6% YTD
DJIA -0.7% YTD

3:30 pm: [BRIEFING.COM]

Precious metals traded lower today as the dollar index rose on strong U.S. private sector jobs data. The ADP Employment report showed that the private sector added 238,000 jobs in December, while the Briefing.com consensus expected the reading to come in at 203,000
Feb gold extended losses for a third consecutive session, falling to a session low of $1218.30 per ounce in morning pit action. It eventually settled at $1225.50 per ounce, or 0.3% lower
Mar silver dipped to a session low of $19.31 per ounce after pulling back from a session high of $19.64 per ounce set moments after floor trade opened. Unable to regain much momentum, it settled with a 1.3% loss at $19.53 per ounce
Feb crude oil fell deeper into negative territory as weekly inventory data and the stronger dollar index weighed on prices. The EIA reported that for the week ending Jan 3, crude oil inventories had a draw of 2.675 mln barrels when a draw of 0.9-2.75 mln barrels was anticipated. In addition, both gasoline and distillate inventories came in higher-than-expected. The energy component retreated from its session high of $93.77 per barrel and fell below the $93 per barrel level by mid-morning pit action. It eventually settled with a 1.4% loss at $92.32 per barrel
Feb natural gas touched a session high of $4.32 per MMBtu but slipped into negative territory in late morning floor trade. It continued to trend lower for the remainder of the session and settled 1.9% lower at $4.22 per MMBtu

3:05 pm: [BRIEFING.COM] The S&P 500 trades less than two points below its flat line with one hour remaining in today's session.

The Consumer Credit report for November was just released by the Federal Reserve and it showed that consumer credit increased by $12.3 billion. That was lower than the Briefing.com consensus estimate of $15.2 billion. The prior month's credit growth was revised lower to $17.90 billion from $18.20 billion.

2:30 pm: [BRIEFING.COM] Equities continue trading near their recent levels with the S&P 500 anchored to its flat line.

Looking under the surface does not reveal any noteworthy changes in sector standing as health care (+0.9%), financials (+0.3%), and materials (+0.4%) lead while consumer staples (-0.8%), energy (-0.9%), and telecom services (-1.6%) lag.

It is worth mentioning that losses among the rate-sensitive consumer staples and telecom services are likely related to today's spike in Treasury yields that was brought on by a stronger-than-expected ADP report. The benchmark 10-yr yield is higher by six basis points at 3.00%.

The Federal Reserve will release the November Consumer Credit report in 30 minutes.

2:05 pm: [BRIEFING.COM] The just-released December FOMC minutes were met with a muted reaction in equities as the S&P 500 maintained its recent levels. Elsewhere, Treasuries slipped to fresh lows (10-yr yield +6 bps to 3.01%) while the Dollar Index (81.14, +0.33) climbed to a new high.

The minutes contained comments on the decision to introduce a $10 billion taper, saying some officials saw "waning benefits" from monthly bond purchases. Furthermore, some members wanted to see a quicker end to the asset purchasing program. Outside of the discussion of reduced benefits stemming from the program, the minutes were largely in-line with summaries from prior FOMC meetings.

1:30 pm: [BRIEFING.COM] The major averages continue hovering near their recent levels as participants await the December FOMC minutes, which will be released at 14:00 ET. Earlier this morning, the December ADP Employment report sparked a selloff in Treasuries that has continued through the recently-concluded 10-yr $21 billion reopening.

The auction drew a yield of 3.009%, which was the highest level since May 2011. The bid/cover ratio was on the light side (2.61x) as a strong indirect indirect bid (46.6%) helped offset a weak takedown by direct bidders (13.6%).

We will have a recap of noteworthy items in the FOMC minutes shortly after the top of the hour.

1:00 pm: [BRIEFING.COM] At midday, the major averages trade mixed. The Nasdaq holds a modest gain of 0.3% while the Dow Jones Industrial Average sports a loss of 0.5%. For its part, the S&P 500 hovers just below its flat line.

Equity indices began the session on a lower note, but the Nasdaq displayed relative strength from the start. The outperformance of the tech-heavy index helped the S&P 500 erase the bulk of its losses while the Dow Jones remains in the red.

Prior to the open, the ADP Employment report revealed that the private sector added 238,000 jobs in December while the Briefing.com consensus expected the reading to come in at 203,000. The solid beat increased market expectations for additional tapering as bonds and gold fell while the dollar rallied. Treasuries sit on their lows with the 10-yr yield up five basis points at 3.00% while the Dollar Index trades higher by 0.3% at 81.11. Elsewhere, gold futures are lower by 0.7% at $1221.60 per troy ounce.

Participants will get a second look at labor market conditions on Friday when the December nonfarm payrolls report crosses the wires at 8:30 ET. Furthermore, taper talk is expected to resurface this afternoon when the Federal Reserve releases the minutes from the December FOMC meeting.

Turning the focus back to today's action, top-weighted technology (+0.1%), financials (+0.2%), and health care (+0.7%) hold gains, but most remaining sectors trade lower. The materials space (+0.3%) is an exception, but due to its size, the sector has little influence over the broader market. The group has received a boost from Monsanto (MON 115.43, +2.62), which trades higher by 2.3% after beating on earnings.

12:30 pm: [BRIEFING.COM] Equity indices continue to trade mixed amid lacking leadership. Outside of energy (-0.9%), health care (+0.8%), materials (+0.6%), and telecom services (-1.4%), the remaining sectors are little changed.

The materials sector has received support from chemical producers after Monsanto (MON 115.80, +2.99) reported earnings ahead of analyst estimates. Meanwhile, steelmakers trade modestly higher with the Market Vectors Steel ETF (SLX 47.68, +0.05) up 0.1%.

Also of note, the sector outperforms despite losses among miners. The Market Vectors Gold Miners ETF (GDX 21.68, -0.29) trades down 1.3% while gold futures hold a loss of 0.7% at $1220.60 per troy ounce.

11:55 am: [BRIEFING.COM] Not much has changed since our last update as the major averages continue to trade in mixed fashion. Even though the three top-weighted sectors-technology (+0.2%), financials (+0.3%), and health care (+0.9%)-trade ahead of the broader market, the S&P 500 has been unable to climb too far above its flat line as the remaining sectors trade mixed. Notably, consumer staples (-0.5%) and energy (-0.8%) lag.

With the indices trading in mixed fashion, some participants are taking the opportunity to buy volatility protection as indicated by the CBOE Volatility Index (VIX 13.02, +0.10), which trades higher by 0.8% in an attempt to avoid its fourth loss in a row.

11:30 am: [BRIEFING.COM] Recent action saw some selling that knocked the S&P 500 (-0.1%) off its flat line. The Nasdaq (+0.3%) continues to outperform while the Dow Jones Industrial Average (-0.5%) lags.

The price-weighted index trails its peers as 21 of 30 components register losses. Of those 21, seven members-Chevron (CVX 123.51, -1.56), Disney (DIS 75.52, -0.83), Procter & Gamble (PG 80.18, -1.25), McDonald's (MCD 95.13, -1.25), Microsoft (MSFT 35.91, -0.50), Travelers (TRV 87.40, -1.00), and IBM (IBM 187.78, -1.93)-are down at least 1.0%.

On the upside, JPMorgan Chase (JPM 58.78, +0.46) is the top component, trading higher by 0.8%.

Elsewhere, Treasuries have slumped to fresh lows and the benchmark 10-yr yield now hovers at 3.00% (+6 bps).

11:00 am: [BRIEFING.COM] The major averages have climbed off their lows as the Nasdaq (+0.3%) continues to trade ahead of its peers. The tech-heavy index owes its outperformance to the relative strength of biotechnology and traditional technology.

The iShares Nasdaq Biotechnology ETF (IBB 230.48, +3.55) is higher by 1.6%, which is also contributing to the strength of the health care sector (+0.7%). Furthermore, the traditional technology sector trades higher by 0.1%. The top sector (and Nasdaq) component, Apple (AAPL 542.67, +2.63) is higher by 0.5% after ending yesterday's session below its 50-day moving average.

10:30 am: [BRIEFING.COM] Key commodities such as oil, gold, silver and have sold off this morning, while the dollar index is only modestly lower. The worst performing commodity this morning is silver, which is currently down

Oat and coffee futures are the best two performers (Oats +3.2%, coffee +3.0%).

WTI crude oil sold off below $94/barrel and hit a new LoD of $93.39/barrel (Feb contract) in recent action. Just ahead of the weekly EIA oil inventory data, Feb crude remained near that LoD. Following the data, crude oil dropped to a new LoD. Feb crude oil is now -0.4% at $93.29/barrel.

Natural gas futures sold off this morning as well, hitting a new LoD shortly before floor trading began. Feb nat gas is now +0.5% at $4.32/MMBtu.

Gold and silver sold off this morning and currently near lows for the day. Feb gold is -0.7% at $1221.40/oz, March silver is -1.9% at $19.41/oz.

9:55 am: [BRIEFING.COM] Unable to follow the lead of the outperforming Nasdaq Composite, the major averages have dropped to fresh lows. The S&P 500 trades lower by 0.2% with nine sectors trading in the red. The lone standout, health care, holds a slim gain of just 0.2%.

Several influential sectors are leading the S&P 500 lower with consumer discretionary, consumer staples, and industrials down between 0.4% and 0.6%. Meanwhile, two other heavily-weighted sectors, financials and technology, trade little changed.

Treasuries remain near their lows with the benchmark 10-yr yield up four basis points at 2.98%.

9:45 am: [BRIEFING.COM] As expected, the major averages began the session with modest losses. The S&P 500 trades just below its flat line while the Nasdaq (+0.1%) has already erased its opening slip.

Chipmakers are contributing to the early strength of the tech-heavy index after Micron (MU 24.18, +2.45) delivered a strong earnings report. The stock trades higher by 11.3% while the broader PHLX Semiconductor Index holds an early gain of 1.0%. Meanwhile, the broader technology sector trades higher by 0.1%.

Outside of technology, financials (+0.2%), materials (+0.3%), and health care (+0.1%) have displayed early strength.

9:10 am: [BRIEFING.COM] S&P futures vs fair value: -2.40. Nasdaq futures vs fair value: -3.30. The major averages are expected to begin the session just below their flat lines as the S&P 500 futures trade roughly three points below fair value.

Index futures slumped to lows, but recovered most of their losses, after the December ADP Employment report pointed to the addition of 238K nonfarm jobs while the Briefing.com consensus expected an increase of 203K.

Treasuries sold off in reaction to the report as signals of a stable labor market are being seen as supportive of additional tapering. The 10-yr yield is higher by five basis points at 2.99%. The market should receive more clarity with regards to labor conditions on Friday morning when the December nonfarm payrolls report crosses the wires at 8:30 ET.

9:00 am: [BRIEFING.COM] S&P futures vs fair value: -2.20. Nasdaq futures vs fair value: -2.80. The S&P 500 futures trade two points below fair value.

Asian markets ended mostly higher with Japan's Nikkei pacing the regional advance. Economic data was limited to Australia's AIG Construction Index, which fell to 50.8 from 55.2.

In news, China's Bank of Communications said it expects the country's 2014 GDP to come in at 7.8% with exports expected to grow at 8.5%. In addition, money market rates eased once again with the one-month SHIBOR falling 27.5 basis points to 5.65%.

Japan's Nikkei jumped 1.9%, boosted by industrials as Furukawa Electric Company, IHI, and Mitsubishi Heavy Industries surged between 5.2% and 6.5%.
Hong Kong's Hang Seng gained 1.3%, registering its second consecutive gain as consumer names outperformed. Belle International soared 12.9% and Li & Fung gained 1.9%.
China's Shanghai Composite shed 0.2% after HSBC downgraded Chinese equities to 'Underweight.' China Vanke shed 0.1%.

Major European indices hold modest losses with Great Britain's FTSE (-0.3%) leading the slide after the Halifax House Price Index fell 0.6% month-over-month (+0.6% expected, 0.9% prior) while the year-over-year reading increased 7.5% (8.2% forecast, 7.7% previous). Participants received several other economic data points. Eurozone retail sales increased 1.4% month-over-month (0.2% expected, -0.4% last) while the year-over-year reading rose 1.6% (0.3% forecast, -0.3% prior). Separately, the unemployment rate held steady at 12.1%, as expected. Elsewhere, Germany's trade surplus expanded to EUR17.80 billion from EUR16.70 billion (EUR18.00 billion forecast) and factory orders rose 2.1% month-over-month (1.5% expected, -2.1% prior). Italy's monthly unemployment rate increased to 12.7% from 12.5% (12.5% expected). Norway's Manufacturing Production slipped 0.2% month-over-month (0.5% forecast, -0.6% last).

Germany's DAX is lower by 0.1% as financials lag. Allianz and Muenchener Re trade lower by 0.9% and 2.0%, respectively. On the upside, fertilizer producer K+S trades higher by 4.6%.
In France, the CAC trades down 0.2% with consumer names underperforming. Danone, L'Oreal, and LVMH Moet Hennessy Louis Vuitton are all down between 1.0% and 2.3%. Banks are holding up well as BNP Paribas and Credit Agricole display gains close to 1.5% apiece.
Great Britain's FTSE holds a loss of 0.3% as staple stocks lag. Imperial Tobacco, Tate & Lyle, and Tesco are all down between 2.1% and 2.8%.

8:29 am: [BRIEFING.COM] S&P futures vs fair value: -4.50. Nasdaq futures vs fair value: -6.80. The S&P 500 futures trade less than five points below fair value.

According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 238K in December. This was above the increase of 203K expected by the Briefing.com consensus.

The market viewed this report as a signal suggesting the labor market remains strong enough for the Federal Reserve to continue reducing the pace of its monthly asset purchases.

The dollar strengthened following the report, sending the Dollar Index (+0.23, 81.07) to a fresh session high. Furthermore, Treasuries sold off, pushing the benchmark 10-yr yield to a session high (+4 bps, 2.98%).

7:58 am: [BRIEFING.COM] S&P futures vs fair value: -2.80. Nasdaq futures vs fair value: -4.30. U.S. equity futures hold modest losses with the S&P 500 futures trading three points below fair value.

Reviewing overnight developments:

Asian markets ended mixed. China's Shanghai Composite -0.2%, Hong Kong's Hang Seng +1.3%, and Japan's Nikkei +1.9%.
Economic data was limited:
Australia's AIG Construction Index fell to 50.8 from 55.2.
In news:
China's Bank of Communications said it expects the country's 2014 GDP to come in at 7.8% with exports expected to grow at 8.5%.
Money market rates in China eased once again with the one-month SHIBOR falling 27.5 basis points to 5.65%.

Major European indices hover near their lows. France's CAC -0.1%, Germany's DAX -0.2%, and Great Britain's FTSE -0.4%.
Participants received several economic data points:
Eurozone retail sales increased 1.4% month-over-month (0.2% expected, -0.4% last) while the year-over-year reading rose 1.6% (0.3% forecast, -0.3% prior). Separately, the unemployment rate held steady at 12.1%, as expected.
Germany's trade surplus expanded to EUR17.80 billion from EUR16.70 billion (EUR18.00 billion forecast) and factory orders rose 2.1% month-over-month (1.5% expected, -2.1% prior).
Great Britain's Halifax House Price Index fell 0.6% month-over-month (+0.6% expected, 0.9% prior) while the year-over-year reading increased 7.5% (8.2% forecast, 7.7% previous).
Italy's monthly unemployment rate increased to 12.7% from 12.5% (12.5% expected).
Norway's Manufacturing Production slipped 0.2% month-over-month (0.5% forecast, -0.6% last).
Among news of note:
According to press reports, the International Monetary Fund plans to upgrade its forecast for global growth.

In U.S. corporate news:

Forest Laboratories (FRX 63.08, +4.32): +7.4% after announcing it will acquire privately-held Aptalis for $2.90 billion in cash.
Micron (MU 23.70, +1.97): +9.1% after beating on earnings and revenue.
The Container Store (TCS 40.42, -5.37): -11.7% after reporting a bottom-line beat and guiding full-year results below consensus estimates.
Transocean (RIG 48.85, -0.25): -0.5% after RBC Capital Markets downgraded the stock to 'Sector Perform.'

The weekly MBA Mortgage Applications Index increased 2.6% to follow the prior week's decline of 4.2%.

December ADP Employment Change will be reported at 8:15 ET. Later in the afternoon, the FOMC minutes from the December meeting will be released at 14:00 ET and the Consumer Credit report will cross the wires at 15:00 ET.

6:21 am: [BRIEFING.COM] S&P futures vs fair value: -2.50. Nasdaq futures vs fair value: -6.00.

6:21 am: [BRIEFING.COM] Nikkei...16121.45...+307.10...+1.90%. Hang Seng...22996.59...+283.80...+1.30%.

6:21 am: [BRIEFING.COM] FTSE...6728.28...-27.30...-0.40%. DAX...9487.32...-18.90...-0.20%.

Fed Officials Saw Declining Benefits From QE: Minutes

By Joshua Zumbrun and Craig Torres Jan 8, 2014 3:19 PM ET

Federal Reserve officials saw diminishing economic benefits from their bond-buying program and voiced concern about future risks to financial stability during their last meeting, when they began to cut the pace of purchases.

“A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue,” the record of the Federal Open Market Committee’s Dec. 17-18 meeting showed. Participants also were “concerned about the marginal cost of additional asset purchases arising from risks to financial stability,” citing the potential for “excessive risk-taking in the financial sector.”

Policy makers will gather Jan. 28-29 to consider the next step in their strategy of gradually reducing the pace of bond buying as the economy strengthens. The minutes didn’t describe a set schedule for reductions, although “a few” officials mentioned the need for a “more deterministic path.”

Related: Yellen Fed’s Vacancies Prompt Push for Community Banker

“A lot of people in the market think asset purchases have had declining benefits over time, and this is the first time I can recall the committee as a whole has really come out and agreed with that sentiment,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

“The economy seems to be able to stand more on its own now,” Feroli said.

‘Substantial Improvement’

Some Fed officials “expressed the view that the criterion of substantial improvement in the outlook for the labor market was likely to be met in the coming year if the economy evolved as expected,” the minutes said.

At the same time, “several” officials noted that “a range of other indicators had shown less progress toward levels consistent with a full recovery in the labor market, and that the projected pickup in economic growth was not assured.”

The committee cut monthly purchases to $75 billion in December, from $85 billion, citing improvement in the labor market that pushed the jobless rate down to a five-year low of 7 percent.

The yield on the benchmark 10-year Treasury note rose 0.05 percentage point to 2.99 percent at 2:52 p.m. in New York, while the Standard & Poor’s 500 Index fell 0.1 percent to 1,836.41.

Recent progress on jobs, manufacturing and housing has affirmed the FOMC’s view that the economy is improving enough to take the first step toward exiting stimulus that has swelled the Fed balance sheet to more than $4 trillion.

‘Measured Reduction’

Fed Chairman Ben S. Bernanke on Dec. 18 said the Fed will “continue to do probably at each meeting a measured reduction” in the pace of purchases. The FOMC will probably taper buying in $10 billion increments over the next seven meetings before ending them in December, according to a Dec. 19 Bloomberg News survey of economists.

The minutes said “many participants expressed concern about the deceleration in consumer prices over the past year.” The personal consumption expenditures price index rose 0.9 percent for the 12 months ending November, more than a percentage point below the Fed’s 2 percent target. Some participants said inflation was unlikely to slow further.

The FOMC lowered its target interest rate to near zero in December 2008 and says it will stay there as long as the unemployment rate remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.

Longer-Run Goal

The committee strengthened that pledge last month, saying it “likely will be appropriate” to hold the main interest rate near zero “well past the time that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below the committee’s 2 percent longer-run goal.”

Fed staff reported that tests of the reverse-repurchase agreement mechanism had “proceeded smoothly,” and that the program probably would be extended beyond January to gather more information on demand for the facility and gauge its “efficacy in putting a floor on money market rates,” according to the minutes.

The Federal Reserve Bank of New York said last month it increased how much money counterparties can post to the repurchase mechanism to $3 billion from $1 billion. Under the agreements, the Fed lends securities for a set period to temporarily remove cash from the banking system.

Unprecedented Easing

Policy makers met in the final weeks of Bernanke’s eight-year tenure, which ends Jan. 31. Vice Chairman Janet Yellen, an architect of the unprecedented easing, was confirmed this week by the Senate to succeed Bernanke.

Interest rates climbed after the Fed’s Dec. 18 tapering announcement, with the yield on the 10-year Treasury note rising to 3.03 percent on Dec. 31, a more than two-year high. The average 30-year fixed-rate mortgage rose to 4.53 percent last week from as low as 3.35 percent in May, according to Freddie Mac data.

Officials discussed and rejected the idea of lowering the unemployment threshold, opting instead to “provide qualitative guidance regarding the committee’s likely behavior after a threshold was crossed.”

Bernanke has said bond buying by the Fed helped bolster the recovery, reducing unemployment in November to a five-year low of 7 percent. Monetary stimulus last year helped push up the Standard & Poor’s 500 Index 30 percent to a record 1,848.36 on Dec. 31.

Bernanke said in a Jan. 3 speech that the country may be poised for faster growth.

Less Restraint

“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” he said in Philadelphia.

Recent economic reports have reinforced Bernanke’s outlook.

Companies added more workers than projected in December as U.S. employers grew more optimistic about the prospects for demand, a private report based on payrolls showed today.

The 238,000 increase in employment was the biggest since November 2012 and followed a revised 229,000 gain in November that was stronger than initially estimated, according to the ADP Research Institute in Roseland, New Jersey.

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

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Image@ http://twitter.com/wrbtrader Image@ http://stocktwits.com/wrbtrader

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