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 Post subject: February 19th Wednesday Trade Results - Profit $1,110.00
PostPosted: Thu Feb 20, 2014 12:01 am 
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Joined: Sat Jan 10, 2009 2:06 pm
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Location: Canada
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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 @ $1,110.00 dollars or +11.10 points, Emini ES ($ES_F) futures @ $0.00 dollars or +0.00 points, Light Crude Oil CL ($CL_F) futures @ $0.00 dollars or +0.00 points, Gold GC ($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 @ $1,110.00 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=127&t=1725

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 or you do not document (journal) your own thoughts from trade to trade...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=232&t=2209

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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 Stay In Red After Fed Minutes

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

NEW YORK (CNNMoney)
Stocks ended lower Wednesday, as investors digested minutes from the Federal Reserve's last meeting and grappled with disappointing economic data.

The Dow and S&P 500 shed more than 0.5%, and the Nasdaq lost 0.9%. Tech stocks have been hot lately though. The Nasdaq has gained for the past eight days.

The Fed released minutes from its January meeting in which it decided to further reduce, or taper, its monthly bond purchases. Though last month's decision to continue to cut back on its stimulus measures was unanimous among the Fed's 10 voting members, investors looked for hints of how the Fed might act in the future.

To that end, the Federal Reserve indicated that it may scrap its 6.5% unemployment rate target for raising the key federal funds rate since the jobless rate is quickly approaching that threshold despite weak gains in hiring.

Additionally, the minutes indicated that there were some Fed officials who debated the possibility of raising interest rates sooner than anticipated as the economy improves. The Fed has otherwise maintained that it intends to hold down interest rates for the foreseeable future until the economy is stronger.

On the economic front, housing starts fell sharply in January, as bad winter weather took a hit on construction.

Some analysts say markets should brace themselves for greater volatility this year after a bumpy start to 2014.

"Sentiment may still be fragile after the big gains in equities over the past year and a half," noted Gary Thayer, chief macro strategist at Wells Fargo Advisors. "Further price volatility is likely in the weeks and months ahead."

What's moving: The broader market was down. But some prominent stocks moved higher. Shares of Zale (ZLC) surged about 40% after Signet Jewelers (SIG) unveiled a deal to acquire the Dallas-based jewelry retailer for $21 a share. Signet shares soared 18%. The deal was a popular topic among traders on StockTwits.

"$ZLC Wow. $ZLC longs now have enough $ to buy a piece of jewelry for every friend & family member," said LukeKramer. "Heck even the mailman gets a diamond."

Trader ibex thought the deal was a good sign for the broader stock market.

"When a jewelry company $ZLC sells for 41% premium, tells me the bull is still here for a while longer!" he said.

Tesla (TSLA) shares rose sharply following the closing bell after the electric car marker's earnings topped expectations. Tesla said it sold a record 6,892 of its Model S sedans in the fourth quarter, and that it expects to deliver more than 35,000 of them this year. Investors are hoping for more news from CEO Elon Musk about plans to expand in China and introduce new models.

GPS device maker Garmin (GRMN) reported an increase in quarterly earnings on a slight drop in revenue, sending shares up 10%.

Spirit Airlines (SAVE) shares gained ground after the discount airline said that it more than doubled its adjusted net income for the quarter.

On the downside, Herbalife (HLF) shares slipped even after the controversial seller of nutrition products, reported a double-digit percentage jump in quarterly profit, fueled by sales in China. Hedge fund manager Bill Ackman has been claiming that Herbalife is a pyramid scheme and has been betting against the company for over a year.

StockTwits traders noted that the company went after the hedge fund manager during its conference call with analysts.

"$HLF had mentioned "short seller Bill Ackman" 3 times already," said bbolan1. "Calls him reckless, gambler...."

Another trader joked that Ackman rival Carl Icahn, who is a big investor in Herbalife, should become a corporate pitchman.

"$HLF They should recruit Icahn to sell some products," Lincoln777 said.

Meanwhile, shares of Facebook (FB, Fortune 500) rose to an all-time high of $69.08, bringing the company's value to more than $176 billion.

"Facebook is now bigger than Bank of America $FB $BAC," said TopstepTrader. Bank of America's (BAC, Fortune 500) market cap is around $172 billion.

The stock is the biggest gainer in CNNMoney's Tech 30 index this year. Traders seemed optimistic that Facebook will continue to climb higher.

"$FB nothing is guaranteed in life except death and taxes but this looks like a high possibility of closing @ 69!" said ScalpingWS. "And tomorrow 70! glta longs. Bullish."

And LynnHoggan predicted shares could rise another 40%: "$FB continues going up. $100 this year..."

European markets ended with modest gains. In Ukraine, the currency was under pressure as more than 20 people died during anti-government protests.

Asian markets ended mostly with gains, except for Japan's Nikkei, which dipped by 0.5%.

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4:15 pm: [BRIEFING.COM] Equities ended on their lows with the S&P 500 snapping its three-day win streak. The benchmark index fell 0.7% while the Nasdaq (-0.8%) lagged throughout the session.

Stocks began the day with slim losses, but the Dow and S&P 500 were quick to erase the early weakness. For its part, the Nasdaq was unable to make a sustained move into the green.

The S&P 500 climbed through the first hour of action, but the rally stalled with the index less than four points shy of its all-time intraday high of 1850.84. Shortly before midday, equities slumped to lows in a move that coincided with a headline from the International Monetary Fund reminding investors that global growth remains uneven and fragile with persistent downside risks.

While the IMF headline presented a convenient excuse for the swift dive, the stock market was challenged with increasing resistance prior to the release. The Nasdaq was bouncing up against its flat line while influential sectors like consumer discretionary (-0.9%), financials (-1.2%), and industrials (-0.9%) underperformed. Once the headline hit, the earlier underperformers drove the remainder of the market lower.

Eight of ten sectors ended in the red with financials registering the largest decline. Citigroup (C 48.19, -1.19) was the weakest performer among the majors while regional banks also endured significant losses. The SPDR S&P Regional Banking ETF (KRE 37.83, -1.09) fell 2.8%.

Elsewhere, the discretionary sector slumped despite some M&A activity among luxury retailers. Signet Jewelers (SIG 93.65, +14.38) spiked 18.1% after announcing an agreement to acquire Zale (ZLC 20.92, +6.01) for $21 per share, representing a 41.0% premium to Tuesday's closing price.

Also of note, the industrial sector was pressured by transports as The Dow Jones Transportation Average saw its second day of losses. The bellwether complex lost 1.3% and finished the session down 2.3% for the week.

On the upside, energy and telecom services added 0.1% and 0.5%, respectively.

Treasuries finished on their lows (10-yr yield +2 bps at 2.73%) with the bulk of the retreat coming after the release of the FOMC minutes from the January meeting. Although the minutes did not contain any major surprises, they did indicate that some officials said there should be a 'clear presumption' in support of continued tapering in $10 billion increments.

Participation was on the light side with 688 million shares changing hands on the floor of the New York Stock Exchange.

Today's economic data included two reports:
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Housing starts fell 16% in January, from an upwardly revised 1.048 million (from 999,000) in December to 880,000. The Briefing.com consensus expected housing starts to fall to 963,000. There are some questions about how much of a role the adverse weather played in the decline. Surely the 67.7% decline in starts in the Midwest was partially weather driven. However, starts in the South, which was not that affected by the polar vortex, declined 12.5% in January. Furthermore, the hard-hit Northeast saw starts increase 61.9% in January. Normally, an exogenous shock -- such as the weather -- would result in a sizable rebound in the next month or two. However, after looking at all of the regional data, it is difficult to state with assurance that starts will return to the 1.00 million trend that they averaged in November and December.
January PPI increased 0.2% after ticking up 0.1% in December. The Briefing.com consensus expected the PPI to increase 0.2%. The BLS reconstructed the PPI index for January. Instead of using a Stage-of-Processing method, the PPI is now calculated based on a Final Demand-Intermediate Demand system. Beyond the typical manufacturing data, the new index also includes price trends for services, government spending, and exports. Prices of final demand goods increased 0.4% in January after increasing by the same amount in December. Energy price growth softened, up 0.3% in January after increasing 1.5% in December. Much of the gain in the final demand goods index was due to a 2.7% increase in pharmaceutical preparations.

Tomorrow, weekly initial claims and January CPI will be reported at 8:30 ET while January Leading Indicators and the Philadelphia Fed survey for February will both be released at 10:00 ET.

Nasdaq Composite +2.6% YTD
Russell 2000 -1.1% YTD
S&P 500 -1.1% YTD
Dow Jones Industrial Average -3.2% YTD

3:30 pm: [BRIEFING.COM]

Mar natural gas extended yesterday's gains on forecasts calling for frigid weather at the end of Feb and heading into early March. Prices lifted from a session low of $5.83 per MMBtu and rose as high as $6.28 per MMBtu, a new high since Jan 2009 for the continuous contract.
Natural gas pulled back slightly in the last half hour of pit trade and settled with a solid 11.0% gain at $6.15 per MMBtu.
Mar crude oil was higher today despite a slightly stronger dollar index. Prices dipped to a session low of $102.40 per barrel but quickly regained momentum. The energy component pushed to a high of $103.47 per barrel, its highest level since Oct, as it headed into the close and settled at $103.46 per barrel, or 0.9% higher.
Apr gold traded in negative territory ahead of the release of FOMC minutes at 14:00 ET. The yellow metal brushed a session low of $1317.50 per ounce in early afternoon pit trade and settled 0.3% lower at $1320.60 per ounce, booking its first loss in eight sessions.
Mar silver chopped around in the red for most of today's floor trade. It touched a session high of $21.92 per ounce in morning action but quickly slipped back below the unchanged line. It eventually settled at $21.85 per ounce, or 0.2% lower.
Both of the precious metals slipped further into the red in electronic trade following the release of the FOMC minutes. Gold is now down 0.7% at $1314.70 per ounce while silver is down 1.2% at $21.64 per ounce.

3:00 pm: [BRIEFING.COM] The S&P 500 trades lower by 0.2% with one hour remaining in today's session. Sector standing remains little changed from our recent updates as consumer discretionary (-0.5%) and financials (-0.6%) display noteworthy losses while the energy sector (+0.6%) outperforms.

The financial sector lags amid broad pressure, but multinational financials have shown considerable weakness. The SPDR S&P International Financial Sector ETF (IPF 22.33, -0.49) trades lower by 2.1%.

Meanwhile, the discretionary space has had to contend with the underperformance of Amazon.com (AMZN 347.83, -5.82), which trades lower by 1.7%.

2:35 pm: [BRIEFING.COM] The S&P 500 trades just above its session low after making a brief appearance in positive territory. The flat line has acted as resistance for the benchmark index ever since the late morning retreat took place.

Three influential sectors-consumer discretionary (-0.4%), financials (-0.6%), and industrials (-0.4%)-continue to weigh while energy (+0.8%) remains in the lead. Also of note, health care and technology underperformed during the early afternoon, but now trade in-line with the S&P 500.

Elsewhere, Treasuries dropped to lows after the release of FOMC minutes. The 10-yr note is now lower by seven ticks with its yield up two basis points at 2.73%.

2:10 pm: [BRIEFING.COM] The S&P 500 held its ground in reaction to the FOMC minutes from the January meeting.

The minutes were not expected to contain too many surprises, and that expectation was largely fulfilled. According to the minutes, members of the Committee agreed that tapering should continue unless the outlook changes. In addition, some officials said there should be a 'clear presumption' in support of continued tapering in $10 billion increments.

Also of note, participants determined that the 6.5% unemployment threshold will need to be replaced with other forms of forward guidance since the unemployment rate has declined to 6.6%.

1:25 pm: [BRIEFING.COM] Following a skittish sell-off just before 12:00 p.m. ET, the major indices have calmed down and are making an effort to pare their losses in front of the release of the FOMC Minutes for the January meeting at the top of the hour.

The minutes will be studied carefully, but arguably, Fed Chair Janet Yellen provided the overview of that meeting (and the tenor of that meeting) with her more recent testimony before the House Financial Services Committee. Additionally, several Fed officials have implied since the January meeting that the bar to stop tapering the Fed's asset purchases remains very high.

To that last point, Atlanta Fed President Lockhart noted a little over an hour ago that he thinks it is likely that the asset purchase program will be completely wound down by the fourth quarter. That remark probably stood out for some as a profit-taking catalyst, knowing that the stock market has been drawing some support of late from the idea that the disappointing economic data could be a marker the Fed uses to stop its tapering for a bit.

In any event, the buy-the-dip inclination wasn't squashed with the mid-day sell-off as evidenced by the rebound attempt currently being made by the stock market.

1:00 pm: [BRIEFING.COM] At midday, the major averages hover near their lows with the Nasdaq (-0.5%) pacing the retreat.

Equity indices began the session just below their flat lines, but the opening dip was erased almost immediately. Following the initial rebound, the S&P 500 came within three points of its all-time high, but was met with a swift rejection that knocked the index to a fresh session low.

The quick dive came about after the International Monetary Fund reminded investors that global growth leaves much to be desired. Although the headline itself did not cause the selling, it came about at a time when several influential sectors lagged and made the S&P 500 susceptible to a noteworthy drop. Most notably, the financial sector, which hovered just below its flat line ahead of the IMF headline, now trades lower by 0.7%.

Similarly, the largest S&P 500 sector, technology, was among the early underperformers, and now trades lower by 0.3%.

With the major averages on lows, the energy sector (+0.9%) is the only group that continues trading in the green. On a related note, crude oil trades up 0.4% at $102.47 per barrel.

Also of note, the retreat has invited some demand for volatility protection as the CBOE Volatility Index (VIX 15.08, +1.21) trades up 8.8%.

Today's economic data included two reports:

Housing starts fell 16% in January, from an upwardly revised 1.048 million (from 999,000) in December to 880,000. The Briefing.com consensus expected housing starts to fall to 963,000. There are some questions about how much of a role the adverse weather played in the decline. Surely the 67.7% decline in starts in the Midwest was partially weather driven. However, starts in the South, which was not that affected by the polar vortex, declined 12.5% in January. Furthermore, the hard-hit Northeast saw starts increase 61.9% in January. Normally, an exogenous shock -- such as the weather -- would result in a sizable rebound in the next month or two. However, after looking at all of the regional data, it is difficult to state with assurance that starts will return to the 1.00 million trend that they averaged in November and December.
January PPI increased 0.2% after ticking up 0.1% in December. The Briefing.com consensus expected the PPI to increase 0.2%. The BLS reconstructed the PPI index for January. Instead of using a Stage-of-Processing method, the PPI is now calculated based on a Final Demand-Intermediate Demand system. Beyond the typical manufacturing data, the new index also includes price trends for services, government spending, and exports. Prices of final demand goods increased 0.4% in January after increasing by the same amount in December. Energy price growth softened, up 0.3% in January after increasing 1.5% in December. Much of the gain in the final demand goods index was due to a 2.7% increase in pharmaceutical preparations.

At 14:00 ET, the Federal Reserve will release the minutes from its January meeting. Although the minutes are not expected to contain any groundbreaking developments, they are likely to provide some insight into the discussion surrounding the latest tapering decision. In addition, some will look to see whether the minutes include any commentary regarding emerging markets.

12:30 pm: [BRIEFING.COM] The S&P 500 has returned to its opening low after spending about an hour just below the 1845 level. The benchmark index saw a quick six-point dive from that level after the International Monetary Fund reminded investors that global growth remains shaky.

Although stocks slumped right after the headline hit, the market was ripe for a pullback as several influential sectors lagged even before comments from the IMF crossed the wires. Most notably, the financial sector, which held a modest loss throughout the morning, now trades lower by 0.7%.

Consumer discretionary (-0.5%) and technology (-0.5%) also lag while the energy sector (+0.8%) remains atop the leaderboard.

Elsewhere, Treasuries strengthened during the retreat in equities, but the 10-yr note remains below its session high (10-yr yield -2 bps at 2.69%).

12:05 pm: [BRIEFING.COM] The S&P 500 has slipped from its recent level in a move that saw a retreat across all sectors. The drop coincided with a headline from the International Monetary Fund, which said that global growth remains uneven and fragile with persistent downside risks. While the comments from the IMF should not have been all that surprising, the headline crossed at a time when a handful of underperforming sectors were in position to send the market lower.

Most notably, consumer discretionary (-0.4%), financials (-0.4%), industrials (-0.3%), and technology (-0.3%) widened their losses following the news from the IMF.

11:35 am: [BRIEFING.COM] The major averages continue trading near their recent levels with the S&P 500 up 0.2%. Despite its modest gain, the benchmark index is contending with mixed performance among top-weighted sectors as health care (+0.4%) outperforms while consumer discretionary (-0.1%), financials (-0.1%), and technology (+0.1%) lag.

The three underperforming sectors bear watching into the afternoon as their performance is likely to factor into determining the direction of the broader market.

Elsewhere, the dollar/yen pair also deserves attention given its close correlation to the S&P 500, which stems from the popularity of the yen-based carry trade. The pair trades near 102.35 after climbing steadily since notching a session low just under 101.90.

11:00 am: [BRIEFING.COM] The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.2%) have built on their early gains while the Nasdaq (-0.1%) remains in the red.

The tech-heavy index lags amid weakness in some of its top components. On that note, Apple (AAPL 542.23, -3.76), Google (GOOG 1205.89, -4.99), and Intel (INTC 24.65, -0.11) display losses between 0.4% and 0.7%. Biotechnology has also factored into the underperformance as the iShares Nasdaq Biotechnology ETF (IBB 263.41, -0.83) trades lower by 0.3%.

Elsewhere, all ten S&P 500 sectors are now trading in the green. Energy (+0.9%) and materials (+0.7%) remain in the lead while consumer discretionary (unch) and consumer staples (unch) round out the leaderboard.

10:35 am: [BRIEFING.COM]

Natural gas futures rallied overnight and just hit $6/MMBtu a moment ago as forecasters are now expecting frigid weather at the end of February and heading into early March.
In current trade, Mar natural gas is +7.7% at $5.98/MMBtu
Crude oil futures rose overnight, rising as high as $102.88/barrel. Just ahead of floor trading began, crude sold off and momentarily moved into negative territory
Mar crude is now +0.5% at $102.90/barrel
Precious metals remain in the red... Apr gold is now -0.3% at $1320.60/oz, while Mar silver is -0.2% at $21.85/oz. Mar copper is +0.3% at $3.30/lb
Dollar index is +0.1% at 80.08, just under its session high

10:00 am: [BRIEFING.COM] The S&P 500 has joined the Dow Jones Industrial Average (+0.2%) in the green while the Nasdaq (-0.3%) remains in the red.

The early underperformance of the Nasdaq comes after the tech-heavy index paced much of the recent rally. Despite today's modest loss, the index is higher by 2.1% in 2014 versus a 0.3% decline for the S&P 500.

Energy (+0.7%) and materials (+0.3%) remain in the lead while consumer discretionary (-0.2%) and financials (-0.1%) have yet to climb out of the red.

9:40 am: [BRIEFING.COM] The major averages began the trading day on a modestly lower note. The S&P 500 holds an early loss of 0.1% with eight of ten sectors trading in the red. Consumer staples (-0.3%), financials (-0.3%), and utilities (-0.3%) paced the early slide while the remaining decliners saw opening losses of no more than 0.2%.

On the upside, the energy sector is higher by 0.2% while crude oil trades up 0.1% at $102.16/bbl. Elsewhere, the materials space (+0.1%) also trades just ahead of the broader market.

Treasuries remain near their best levels of the session with the benchmark 10-yr yield down two basis points at 2.69%.

9:16 am: [BRIEFING.COM] S&P futures vs fair value: -5.70. Nasdaq futures vs fair value: -8.30. Equity indices are set to begin today's session on the defensive as index futures hover not far from their overnight lows. The S&P 500 futures trade nearly six points below fair value with the bulk of the decline coming after the start of the European session. It should be noted the retreat in futures has been accompanied by a strengthening yen, which has once again fueled concerns about potential carry trade unwinds weighing on global equities. Currently, the dollar/yen pair hovers right above the 102.00 level after notching a low just under 101.90.

Elsewhere, Treasuries have continued their climb from yesterday. The 10-yr note is higher by six ticks with its yield at 2.69%.

Today's economic data featured the January Housing Starts report, which missed expectations. Housing starts fell 16% from December's upwardly revised 1.048 million (from 999,000) to 880,000. The Briefing.com consensus expected the reading to fall to 963,000. There are some questions about how much of a role the adverse weather played in the decline. Surely the 67.7% decline in starts in the Midwest was partially weather driven. However, starts in the South, which was not that affected by the polar vortex, declined 12.5% in January. Furthermore, the hard-hit Northeast saw starts increase 61.9% in January.

Normally, an exogenous shock--such as the weather--would result in a sizable rebound in the next month or two. However, after looking at all of the regional data, it is difficult to state with assurance that starts will return to the 1.00 million trend that they averaged in November and December in the near future.

The minutes from the January FOMC meeting will be released at 14:00 ET.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: -4.60. Nasdaq futures vs fair value: -6.30. The S&P 500 futures have climbed off their lows, but remain almost five points below fair value.

Markets across Asia ended mostly higher. In China, SHIBOR slid to its lowest levels since May as rates continued normalizing following the Lunar New Year. Elsewhere, Australia released the latest CB Leading Index (0.8% month-over-month, 0.2% previous) and Wage Price Index (0.7% quarter-over-quarter versus 0.7% expected) readings. Also of note, Malaysia's inflation rate ticked up to 3.4% year-over-year (3.2% previous).

Japan's Nikkei fell 0.5% amid some profit-taking as the yen strengthened. Real estate stocks were pressured as Sumitomo Realty & Development lost 2.4% and Mitsui Fudosan shed 0.7%.
Hong Kong's Hang Seng eked out a small gain of 0.3%. Financials led as Bank of East Asia jumped 4.8% after announcing record profit.
China's Shanghai Composite climbed 1.1% to its best level in nine weeks. Coal-based China Shenhua Energy rallied 1.4% after announcing an 18% year-over-year rise in coal production.

Major European indices trade lower across the board with Italy's MIB (-0.6%) seeing the largest loss. Participants received several economic data points. Great Britain's claimant count fell 27,600 (-20,000 forecast, -27,700 prior) and the unemployment rate ticked up to 7.2% from 7.1% (7.1% expected). Separately, average earnings index + bonus increased 1.1% (1.0% consensus, 0.9% previous). Elsewhere, Spain's trade deficit narrowed to EUR1.83 billion from EUR1.76 billion (deficit of EUR1.20 billion expected) and Swiss ZEW Expectations fell to 28.7 from 36.4 (40.0 expected).

In news, European Central Bank member Ewald Nowoty said the ECB is nearing an agreement to terminate sterilizing bond purchases completed under the Securities Markets Program.

In France, the CAC is lower by 0.1%. Steelmaker Vallourec leads the decline with a loss of 4.7%. On the upside, utilities Electricite de France GDF Suez outperform with respective gains of 0.6% and 0.9%.
Germany's DAX trades down 0.2% with financials showing weakness. Deutsche Bank and Commerzbank are lower by 0.8% and 2.7%, respectively. Similar to France, utilities are showing strength with RWE trading higher by 1.0%.
Great Britain's FTSE holds a loss of 0.4% with health care displaying weakness. AstraZeneca and GlaxoSmithKline are lower by 3.5% and 1.3%, respectively. Rolls Royce Holdings outperforms, trading higher by 2.4%.
Italy's MIB sports a loss of 0.6% amid broad weakness. Banco Popolare is lower by 2.9% and UniCredit trades down 1.4%.

8:33 am: [BRIEFING.COM] S&P futures vs fair value: -6.00. Nasdaq futures vs fair value: -8.80. The S&P 500 futures trade six points below fair value.

Housing starts hit an annualized rate of 880,000 units during January, which was below the 963,000 expected by the Briefing.com consensus. December starts were revised up to reflect an annualized rate of 1,049,000 starts (from 999,000). As for building permits, they fell to 937,000 from the prior month's revised rate of 991,000 (from 986,000). That was below the pace of 980,000 that had been expected among economists polled by Briefing.com.

January producer prices rose 0.2%, which met the Briefing.com consensus expectations. Core producer prices rose 0.2% while the consensus expected an uptick of 0.1%.

7:55 am: [BRIEFING.COM] S&P futures vs fair value: -7.00. Nasdaq futures vs fair value: -11.00. U.S. equity futures hover near their pre-market lows amid cautious overseas action. The S&P 500 futures trade seven points below fair value.

Reviewing overnight developments:

Asian markets ended mixed. Hong Kong's Hang Seng +0.3%, China's Shanghai Composite +1.1%, and Japan's Nikkei -0.5%.
In economic data:
Japan's All Industries Activity Index slipped 0.1% month-over-month (0.2% consensus, 0.4% prior).
Australia's wage price index rose 0.7% quarter-over-quarter (0.6% consensus, 0.5% prior) while the year-over-year reading increased 2.6% (2.6% forecast, 2.7% consensus). Separately, MI Leading Index slipped 0.2% month-over-month (0.1% prior) and CB Leading Index increased 0.8% month-over-month (0.2% previous).
Among news of note:
After spending yesterday's session in a steady climb off its lows, the Japanese yen continued strengthening overnight, pressuring the dollar/yen pair below 102.00, where it currently trades.

Major European indices trade lower across the board. France's CAC -0.3%, Great Britain's FTSE -0.4%, and Germany's DAX -0.5%. Elsewhere, Spain's IBEX -0.6% and Italy's MIB -0.8%.
Participants received several economic data points:
Great Britain's claimant count fell 27,600 (-20,000 forecast, -27,700 prior) and the unemployment rate ticked up to 7.2% from 7.1% (7.1% expected). Separately, average earnings index + bonus increased 1.1% (1.0% consensus, 0.9% previous).
Spain's trade deficit expanded to EUR1.83 billion from EUR1.76 billion (deficit of EUR1.20 billion expected).
Swiss ZEW Expectations fell to 28.7 from 36.4 (40.0 expected).
In news:
European Central Bank member Ewald Nowoty said the ECB is nearing an agreement to terminate sterilizing bond purchases completed under the Securities Markets Program.

In U.S. corporate news:

Herbalife (HLF 70.00, +1.07): +1.6% after beating on revenue and guiding first quarter results below consensus.
Lumber Liquidators (LL 99.00, +3.40): +3.6% after beating on earnings and revenue.
Nabors Industries (NBR 1.05, +0.39): +2.1% following its revenue beat.
Panera Bread (PNRA 170.11, -3.07): -1.8% after beating earnings estimates by two cents and guiding first quarter earnings below consensus.
Sunedison (SUNE 15.00, -0.18): -1.2% after missing revenue estimates.
Zale (ZLC 20.76, +5.85): +39.2% after announcing it will be acquired by Signet Jewelers (SIG 89.00, +9.74) for $21 per share, representing a 41.0% premium to Tuesday's closing price.

The weekly MBA Mortgage Index fell 4.1% to follow last week's decrease of 2.0%.

January Housing Starts, Building Permits, and PPI will all be reported at 8:30 ET while the latest minutes from the January FOMC meeting will cross the wires at 14:00 ET.

6:24 am: [BRIEFING.COM] S&P futures vs fair value: -5.00. Nasdaq futures vs fair value: -6.00.

6:24 am: [BRIEFING.COM] Nikkei...14766.53...-76.70...-0.50%. Hang Seng...22664.52...+76.80...+0.30%.

6:24 am: [BRIEFING.COM] FTSE...6778.07...-18.40...-0.30%. DAX...9630.70...-29.10...-0.30%.

Stocks Fall With Treasuries as Dollar Gains on Fed, IMF

By Lu Wang and Nick Taborek Feb 19, 2014 4:43 PM ET

U.S. stocks fell with Treasuries while the dollar gained as Federal Reserve meeting minutes indicated stimulus cuts would likely continue in measured steps and the International Monetary Fund warned of risks to global growth. Ukraine’s bonds tumbled while U.S. natural gas jumped.

The Standard & Poor’s 500 Index (SPX) fell 0.7 percent by 4:43 p.m. in New York, after climbing to within one point of a record closing high. Ten-year Treasury yields rose two basis points to 2.73 percent. The Bloomberg Dollar Spot Index gained the most in three weeks. Ukrainian June 2014 bond yields jumped 19 percentage points to a record 42 percent. Natural gas climbed to the highest level since 2008, coffee surged to a 15-month high while silver ended its longest rally since at least 1968.

The Fed said cuts to bond purchases should continue in “the absence of an appreciable change in the economic outlook,” minutes of the January meeting showed. Risks of prolonged market turmoil in emerging markets and deflation in the euro area are threatening the world’s economic prospects, according to the IMF. Reeling from the bloodiest clashes in a three-month standoff with protesters, Ukrainian President Viktor Yanukovych granted sweeping powers to the army and police.

“So far tapering seems to be orderly and they seem to be committed to it,” Erik Davidson, the San Francisco-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone. “While it is data-dependent, it is long-term data dependent, certainly not short-term, noise data-dependent. Investors should recognize that this is the beginning of a very very very long process.”

Jobless Rate

At the meeting, the last under former Chairman Ben S. Bernanke, Fed policy makers reduced the bank’s monthly asset purchases by $10 billion to $65 billion, citing improved economic growth.

Policy makers are seeking to provide clarity on how they plan to proceed with their program of economic support after the unemployment rate dropped last month to 6.6 percent, the lowest level in more than five years. The minutes show Fed officials were divided on how to clarify their guidance.

U.S. equities rallied last week as new Fed Chair Janet Yellen pledged to maintain Bernanke’s polices by scaling back stimulus in “measured steps.” She said that given broad improvement in the job market, only a notable change in the economic outlook would prompt the central bank to slow the pace of tapering.

Ten-year Treasury note yields rose after the release of minutes. They fell earlier in the session, touching 2.67 percent, the lowest level since Feb. 11.

‘Move Forward’

“The Fed remains confident on where we are with the economy and will continue to move forward, which is pressuring rates to go higher,” said Sean Simko, a money manager who oversees $8 billion at SEI Investments Co. in Oaks, Pennsylvania. “Due to all the disruptions and the geopolitical issues taking place now, the expectation was for more of a dovish tone to the comments than what really came out.”

The S&P 500 declined today after approaching its all-time closing high of 1,848.38, reached last month. Three rounds of central bank stimulus have helped push the S&P 500 as much as 173 percent higher from a 12-year low touched in 2009.

U.S. housing starts fell to an 880,000 annualized rate following December’s revised 1.05 million, the Commerce Department reported today in Washington. The decrease was the biggest since February 2011. The median estimate of 84 economists surveyed by Bloomberg called for 950,000.

U.S. Movers

Investors have dismissed weaker-than-forecast economic data including January’s payrolls figures over the past two weeks, helping U.S. stocks recover from their worst start of a year since 2010. The S&P 500 had slumped as much as 5.8 percent since reaching a record Jan. 15 as concern over Fed tapering fueled an exodus in emerging markets. The index has since climbed 5 percent, paring its 2014 loss to 1.1 percent.

U.S. Steel Corp. sank 7 percent today after the Department of Commerce rejected its claim that South Korea is selling steel tubing in the U.S. below cost. JPMorgan Chase & Co. and Bank of America Corp. lost at least 1.6 percent as financial shares led declines.

Nabors Industries Ltd., CF Industries Holdings Inc. and Garmin Ltd. jumped at least 5.1 percent after earnings beat analysts’ estimates. About 75 percent of S&P 500 companies that have posted results for the fourth quarter have beaten estimates for profit and 64 percent have exceeded sales projections, according to data compiled by Bloomberg.

Hedge-fund manager David Einhorn cautioned against betting on the extension of a U.S. stock-market rally that he said was fueled by conditions that are difficult to sustain.

Bets Off

“In 2013, the market rewarded many companies for beating earnings after they had lowered guidance,” Einhorn said today on a conference call discussing results at Greenlight Capital Re Ltd. (GLRE), the Cayman Islands-based reinsurer where he is chairman. “This trend is not likely to continue indefinitely.”

The S&P 500 trades at 17 times reported operating earnings, near the most expensive level since 2010, according to data compiled by Bloomberg. The ratio increased about 20 percent in 2013, the biggest jump in four years, while corporate profits rose 5.6 percent. The S&P 500 rallied 30 percent last year.

A January global growth forecast of 3.7 percent for this year, from 3 percent in 2013, hinges on recent market volatility from Turkey to Brazil being short lived, IMF staff wrote in a note prepared for central bankers and finance ministers from the Group of 20.

Emerging Markets

Rising political tensions from Ukraine to Thailand, China’s slowdown and the Fed’s tapering of its stimulus have resulted in falling stocks and currencies in emerging markets. Less than two months into 2014, global investors pulled more money out of emerging-market stock and bond funds than the total amount they retracted last year.

Ukraine’s benchmark equity gauge slid 3.2 percent today, extending yesterday’s 4.2 percent decline. The hryvnia tumbled 1.2 percent to 8.95 per dollar, the weakest level in five years.

President Yanukovych moved to quell a growing insurgency by granting sweeping powers to the army and police after a region declared independence from his government, risking wider conflict. At least 26 people died and hundreds were injured in clashes, which culminated in a police attempt to clear their main protest camp in central Kiev, which was repelled.

European Union foreign ministers meet tomorrow to weigh “all possible options,” including “restrictive measures against those responsible for repression,” the bloc’s foreign policy chief, Catherine Ashton, said in an e-mailed statement.

Forint, Zloty

Hungary’s forint weakened 1 percent against the euro, extending its two-day drop to 1.7 percent. The central bank yesterday lowered its key rate more than economists predicted. The ruble lost 1.1 percent versus the dollar. Russia canceled a bond auction for the third time in less than a month as the ruble declined and debt yields climbed.

The Polish zloty lost 0.5 percent per euro and South Africa’s rand slid 1.5 percent versus the dollar. The Thai baht capped its biggest two-day loss in two months.

A Bloomberg gauge of 20 developing-nation currencies fell for a second day, losing 0.5 percent. The MSCI Emerging Markets Index of stocks dropped 0.2 percent.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major counterparts, added 0.3 percent to 1,020.16, the steepest increase since Jan. 30. The dollar advanced 0.2 percent to $1.3733 per euro.

The yen was little changed at 102.30 per dollar after dropping 0.4 percent yesterday, and Japan’s currency strengthened 0.2 percent to 140.50 per euro.

Commodities Rally

The S&P GSCI gauge of 24 commodities advanced 0.6 percent, the sixth consecutive increase and the longest rising streak since Aug. 16. U.S. natural gas climbed 11 percent to the highest level since 2008 as forecasts show cold air will cover most of the lower 48 U.S. states from Feb. 24 through March 5. Prices have jumped 45 percent this year as waves of arctic air boosted demand for the heating fuel.

Silver dropped 1.9 percent, after rallying 14 percent over the past 13 days.

The S&P GSCI Agriculture Index of eight commodities climbed 1.1 percent, the eighth straight daily gain and the longest advancing streak since 2011. Drought has scorched fields in Brazil, the world’s largest exporter of soybeans, coffee and sugar. Coffee futures jumped 11 percent.

Gold slipped 1.1 percent in electronic trading on the Comex in New York after the Fed minutes were released. Futures settled 0.3 percent lower in regular trading before the minutes. The metal reached $1,332.40 yesterday, the highest level since Oct. 31.

Asian Futures

West Texas Intermediate crude oil increased to a four-month high on speculation that a report tomorrow will show inventories at Cushing, Oklahoma, dropped for a third week. Futures rose 0.9 percent to $103.31 a barrel.

The Stoxx Europe 600 Index added 0.1 percent, reversing an earlier drop of as much as 0.6 percent in the final 90 minutes of trading. Volume in Europe’s Stoxx 600 was 18 percent less than the 30-day average, according to data compiled by Bloomberg.

Carlsberg A/S (CARLB) climbed 7.1 percent after the world’s fourth-biggest brewer posted earnings that beat analysts’ projections. Steel-pipe maker Tenaris SA fell 6.9 percent and Vallourec SA lost 4.5 percent after the U.S. Commerce Department preliminarily set tariffs on imports of steel tubing from eight countries.

The MSCI Asia Pacific Index was little changed as Japanese stocks and Korean stocks retreated while Hong Kong’s Hang Seng Index gained 0.3 percent. Futures on Japan’s Nikkei 225 Stock Average fell at least 0.4 percent in Osaka and Chicago, while futures on indexes in Australia and South Korea also fell.

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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