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 Post subject: November 3rd Monday Trade Results - Profit $3190.00
PostPosted: Tue Nov 04, 2014 1:49 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 @ $3,190.00 dollars or +31.90 points, Emini ES ($ES_F) futures @ $0.00 dollars or +00.00 points, Light Crude Oil CL ($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 @ $3,190.00 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

Trade Log: All of my trades were posted real-time in the timestamp ##TheStrategyLab chat room. You can read today's price action trading information about my trades (e.g. time, price entry, contract size, price exit) as the trade traversed to its completion. Also, sometimes I'll post real-time trading tips involving WRBs, WRB Hidden GAPs, Key Market Events (KME), Tutorial Chapters 2 & 3, WRB Zones, Reaction Highs/Lows, Contracting Volatility or Expanding Volatility. Its all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=136&t=1926

Quote:
If any of my real-time posted trades are via key concepts discussed in the WRB Analysis free study guide or the Fading Volatility Breakout (FVB) free trade signal strategy...I will discuss the reasons (trade strategy) behind those trades if/when a user of ##TheStrategyLab chat room ask questions about the trades. In contrast, real-time posted trades that are via the Advance WRB Analysis Tutorial Chapters 4 - 12 or the Volatility Trading Report (VTR) trade signal strategies...I discuss the reasons (trade strategy) behind those trades with fee-base clients in a different private chat room that's designated only for fee-base clients or discuss the strategies with fee-base clients on my Skype contact list.

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) general volatility analysis involving WRB Analysis 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 and I do not have the time/energy/resources to manage a signal calling chat room. Access instructions for chat room @ 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=250&t=2561

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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. Further, most financial websites remove (delete) their archives after a few years to make room for new content. Therefore, I maintain my own archives of the news content so that I have it available for me when financial websites no longer archives their content.

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

4:10 pm: [BRIEFING.COM] The stock market had its issues on Monday, mostly because of what was happening outside the stock market. To that end, the dollar hit a seven-year high against the yen, crude futures slumped below $80/bbl, and economic reports from around the globe were mixed at best. On top of that, market participants were staring straight ahead at political issues wrapped up in election day for the U.S. on Tuesday.

Those items were reason enough not to expect the stock market to do all that well on Monday, never mind that it also had to contend with the thought that it was overbought following a 10.8% gain off the October 15 low and due for a period of consolidation.

That's pretty much what happened, too. The major indices went into a consolidation mode, holding to narrow trading ranges for most of the session and not distancing themselves all that far from the unchanged mark.

The technology (+0.4%) and financial (+0.3%) sectors exhibited relative strength throughout the session and provided an influential measure of support that helped the market avoid steep losses. However, it was the weakness in the energy sector (-1.7%) that collared the market and kept it from running away to the upside.

That weakness was limited for most of the session, yet it grew more pronounced in the afternoon session when oil prices failed to respond enthusiastically to the seemingly bullish news that Saudi Arabia will be raising December crude prices for Asia and Europe. In conjunction with that report, it was also noted that crude prices will be decreased for U.S. customers.

Crude futures pushed above $80.50/bbl following the aforementioned report, but just as quickly rolled over. When they did, weak-handed bulls bailed out and created an air pocket that sucked prices below $80.00/bbl and then $79.00/bbl in a fast retreat. Crude settled the session down $2.20 at $78.34/bbl.

That weakness pulled down the energy sector, which declined 1.7% for the session after being up as much as 0.8% when the Saudi Arabia headline first hit.

The energy sector was the only sector to make a move greater than 1.0% for the session. That was a big reason, along with the relative strength of the financial and technology sectors, why the broader market didn't trade down in a more noticeable manner.

The utilities sector (+0.7%) was actually the biggest percentage gainer on Monday, yet its small weight didn't make as much difference as the heavy weight of the financial and technology sectors did. To that end, a 1.3% gain in Apple (AAPL 109.40, +1.40) was a big driver of the broader market's resilience along with gains in Dow components American Express (AXP 90.85, +0.90), Goldman Sachs (GS 190.83, +0.84), and JPMorgan Chase (JPM 60.88, +0.40) that helped offset weakness in Caterpillar (CAT 100.22, -1.19) and Home Depot (HD 96.09, -1.43).

Home Depot was downgraded by Raymond James to Market perform from Outperform.

The S&P 500 set a new all-time high earlier in the day at 2024.54, but slipped back from that record-setting level in afternoon trading.

Consistent with the overall mixed tone of Monday's trading, key economic releases were mixed. The ISM Index for October hit a three-year high at 59.0 while final October PMI readings for China, Germany, and the eurozone were revised slightly lower.

The Construction Spending report for September revealed a disappointing 0.4% decline and pointed to the prospect of a downward revision to the third quarter GDP report as the results for July were revised sharply lower from the original report (to +0.3% from +1.2%).

Tuesday's economic calendar will feature the Trade Balance report for September (Briefing.com consensus -$40.2 bln) and the Factory Orders report for September (Briefing.com consensus -0.5%).

Dow Jones Industrial Average +4.8% YTD
Nasdaq Composite +11.1% YTD
S&P 500 +9.2% YTD
Russell 2000 +0.4% YTD

3:35 pm: [BRIEFING.COM]

Crude oil and natural gas were big movers today
Natural gas rose almost 5% by early morning trade on a colder than usual weather forecast in the U.S.
By the time floor trading closed, nat gas finished 4.4% higher at $4.04/MMBtu
Crude was fairly range-bound throughout today's session until the last several minutes, where it has tanked lower, falling as low at $78.14/barrel at around 2:55pm EST.
The Dec contract ended the floor trading session down 2.2% at $78.75/barrel
Dec gold fell 0.2% to $1168.80/oz, while Dec silver gained 0.9% to $16.21/oz

3:00 pm: [BRIEFING.COM] Seeing a broad pullback that coincides with a sharp decline in oil prices that followed a break of $80/bbl.

Ostensibly, crude oil had a reason to rally with Saudi Arabia saying it will raise December crude prices for Asia and Europe. Crude futures did get a brief pop, yet the price action was weak on the rebound effort. The lack of a more concerted response to a seemingly bullish piece of news shook out weak-handed bulls and led to quick, and sharp, selling of the commodity, which is now down $2.16 at $78.38/bbl.

The big downturn in crude prices extracted a toll on the energy sector, which is now down 1.7% after being up as much as 0.8% following the aforementioned headline.

The indices have been dragged down by the energy stocks and profit taking elsewhere. At the same time, bonds have trimmed their losses. The 10-yr note, down as many as 11 ticks earlier, is now down just one tick with its yield unchanged at 2.34%.

2:25 pm: [BRIEFING.COM] Market still locked in its mixed demeanor, rolling back a bit since the last update along with oil prices.

Crude prices have whipped around today, lending some volatility to the energy sector.

Sure enough, a rebound attempt following the headline that Saudi Arabia will raise December crude prices for Asia and Europe, and decrease prices for U.S. customers, has run into resistance in the oil pits. West Texas Intermediate prices have been above and below $80/bbl today. They are currently below $80 ($79.98, -0.56).

The slide in oil prices has pushed the energy sector (-0.6%) to new lows for the session, which has weighed on the broader market.

2:00 pm: [BRIEFING.COM] Modest gains are seen across the board for the major indices. Considering how far the major indices have come since mid-October, however, those small gains are larger than they appear.

Sellers have been unable to wrest control of the market away from buyers. An added measure of support today has been provided by the understanding that November is often a good month for the stock market and even more so, generally speaking, in a midterm election year.

The modest gains today, though, are simply adding to the belief that the market is overbought and due for a period of consolidation. That mentality might be manifesting itself in the CBOE Volatility Index (VIX 14.33, +0.30), which is up 2.1% today as the stock market continues to hold up.

Some participants, apparently, are hedging against a possible turn lower by the market.

1:25 pm: [BRIEFING.COM] The major indices popped to new session highs in the past half hour following a headline that said Saudi Arabia is going to increase December crude prices to Asia.

That headline helped stoke a reversal in oil prices ($80.50, -0.04), which had been trading under $80.00/bbl. In turn, the energy stocks garnered some renewed buying interest that helped drive the energy sector (+0.1%) from negative territory.

ExxonMobil (XOM 96.70, -0.01) paring larger losses has helped the Dow Jones Industrial Average peak its head in to positive territory.

True to the broader action, several of the Dow's financial sector components -- American Express (AXP 91.05, +1.10), Goldman Sachs (GS 191.19, +1.20), and JPMorgan Chase (JPM 60.94, +0.46) -- are standouts to the upside.

12:55 pm: [BRIEFING.COM] Coming off a big day on Friday and a big week last week, the story today isn't so much that buyers aren't showing much conviction as it is that sellers aren't showing much conviction.

Profit-taking efforts have been limited and stymied in a certain respect by the relative strength seen in the influential technology and financial sectors. They are the two most heavily-weighted sectors in the S&P 500 and they have held up well all day.

There haven't been any real big movers today, however, which has been imbued with a wait-and-see mentality in front of election day on Tuesday.

Today's market can be aptly described as mixed given that there are five sectors trading up and five sectors trading down at the moment. No sector, though, has moved more than 1.0%.

The utilities sector (+0.7%) is the best-performing sector right now while the energy sector (-0.4%) is bringing up the rear as oil prices dip below $80/bbl ($79.99).

The weakness in crude prices has been partly a function of continued strength in the dollar, which has surged to a seven-year high against the yen. The euro, meanwhile, has fallen to a two-year low against the greenback.

Some downward revisions to October PMI data in the eurozone have pressured the euro while the yen has continued to slide following the Bank of Japan's surprise announcement on Friday that it will be increasing its asset purchase program.

Notably, the October ISM Index out of the U.S. was strong at 59.0 (Briefing.com consensus 56.6), which is a three-year high. A healthy boost in the new orders index to 65.8 from 60.0 helped drive the uptick from September and should ensure that the production index stays elevated over the next few months.

The Construction Spending report for September, however, was a disappointment. It showed a 0.4% decline in spending on the heels of a 0.5% decline in August.

The drop in construction spending was definitely a surprise. According to the advance estimate for Q3 2014 GDP, the BEA assumed a sizable rebound in spending in September. Not only did the September rebound not occur, the revisions to July (+0.3% from +1.2%) were significantly negative. Overall, the data was completely opposite of what the BEA expected, which will likely lead to a downward revision to GDP in the second estimate.

Today's economic news then has fit the overall tone, which is to say it is mixed.

Remarks in the past hour from Dallas Fed President Fisher, who said he voted in favor of the October directive because of a more hawkish tilt in its sentiment, have been tolerated well. The S&P 500 is gliding by session highs at the moment, which also coincide with a new all-time high.

12:25 pm: [BRIEFING.COM] Steady as she goes with neither buyers nor sellers showing much conviction.

Tuesday is election day, so it stands to reason that there is some wait-and-see thinking slowing things down a bit from Friday's fevered pace. Market participants -- and non-market participants for that matter -- are waiting to see if the GOP wins control of both the House and Senate.

Some think a GOP majority in the House and Senate will clear a path toward corporate tax reform that would help boost corporate profits. That thinking, we suspect, was a contributing factor to the rally seen in the back half of October.

Sector action reflects the mixed market as five sectors are up and five sectors are down at the moment. None, though, have moved more than 0.6% in either direction.

12:00 pm: [BRIEFING.COM] A pretty narrow trading range for the stock market today as participants wrestle with the notion that the stock market is probably due for a period of consolidation after such a big run in a short amount of time.

A development today that has kept selling efforts in check, though, is the recognition that the technology (+0.5%) and financial (+0.4%) sectors are outperforming. If they are not bending to profit-taking efforts, the broader market seems unlikely to break.

Will be interssting to see how the market responds over the course of the next hour, which will feature a speech from Dallas Fed President Fisher at 12:40 p.m. ET on the topic of "Preparing to Normalize Monetary Policy."

While the Fed has taken a step toward normalization with the end of QE, the Bank of Japan took a giant leap away from it on Friday when it surprised markets with its decision to increase its asset purchase program. Mr. Fisher is an FOMC voter this year and a well-known hawk.

11:30 am: [BRIEFING.COM] No real change in the overall action in the stock market. The area everyone has been watching with keen interest is the currency market.

The dollar-yen cross hit a 7-yr high earlier at 114.20 before backing off some; the euro-dollar cross, meanwhile, hit a two-year low at 1.244 before bouncing a bit.

Weakness in the yen and euro is leading to strength in the dollar. The U.S. Dollar Index (87.33, +0.41) is at a four-year high.

The strength of the greenback continues to act as a headwind for dollar-denominated commodity prices and it will present some comparability challenges for U.S. multinational companies reporting fourth quarter results should it persist.

11:00 am: [BRIEFING.COM] The stock market continues to trade in a mixed state with the Dow (-0.2%) and S&P 500 (flat) underperforming the Nasdaq (+0.4%) and Russell 2000 (+0.1%).

Home Depot (HD 96.07, -1.45) is the biggest laggard in the Dow after being downgraded by Raymond James to Market Perform from Outperform. It is followed by Chevron (CVX 119.00, -0.95), which is following oil prices lower.

The ongoing weakness in oil prices is weighing on the energy sector (-0.4%), although the broader market has found some influential support in the relative strength of the technology (+0.4%) and financial (+0.1%) sectors -- its two most heavily-weighted sectors in the S&P 500.

If those two sectors continue to hold form, the broader market should manage to avoid steep losses today. Separately, the 10-yr note has not held form. It has relinquished modest overnight gains and is now down nine ticks with its yield up three basis points to 2.37%.

10:35 am: [BRIEFING.COM]

Natural gas futures rallied above the $4/MMBtu level this morning, rising almost 5% to as high as $4.06/MMBtu, as a cold outlook rises expectations of higher demand.
About 50% of U.S. households use natural gas for heating
WTI crude oil sold off this morning to as low as $79.65/barrel, from near $81/barrel. Dec crude, however, is showing some recovery and is back above $80/barrel
In current trade:
Dec natural gas futures are now +3.8% at $4.02/MMBtu
Dec crude oil is -0.5 at $80.13/barrel
Dec gold -0.3% at $1160.60/oz
Dec silver -0.3% at $16.07/oz
Dec copper +0.4% at $3.06/lb
Dollar index +0.4% at 87.25

10:00 am: [BRIEFING.COM] The stock market is trying to find its way in an overall mixed trade that has featured the outperformance of the technology sector (+0.5%). The semiconductor stocks are leading the way there once again, evidenced by a 1.0% gain in the Philadelphia Semiconductor Index.

Including today's gain, the SOX Index is up 18% from its closing level on October 13.

Separately, September construction spending declined 0.4% month-over-month, while the Briefing.com consensus expected an increase of 0.7%. The ISM Index for October rose to 59.0 from 56.6, while the Briefing.com consensus expected the reading to slip to 56.2.

9:45 am: [BRIEFING.COM] Not a whole lot of conviction at the start of trading, yet the broader market pushed up slightly in a move that eclipsed the prior all-time high of 2019.26. That move was quickly met with some resistance and now the indices have started to backtrack.

The idea that the market is overbought and due for a period of consolidation will be pitted today against the realization that November is typically a good month for the stock market and even more so in midterm years. To that end, the Stock Trader's Almanac shows the average gain for the S&P 500 in a midterm year has been 2.7%. It's even better for the Nasdaq and Russell 2000, up 3.8% and 3.9%, respectively.

The utilities sector (+0.4%) has jumped out as the upside leader while the energy sector (-0.5%) is bringing up the rear as crude oil ($80.25/bbl, -$0.29) has coughed up an earlier gain.

9:21 am: [BRIEFING.COM] S&P futures vs fair value: +1.50. Nasdaq futures vs fair value: +5.00. There hasn't been any major corporate announcement or encouraging piece of economic data released in the past few hours, yet the S&P futures have been working their way higher from overnight lows. They are now up a little less than four points, which leaves them floating about three points above fair value.

The translation is that the cash market should start the day modestly higher and that an underlying bullish bias still persists.

The ISM Index for October (Briefing.com consensus 56.2; prior 56.6) will be released at the top of the hour and has the potential to be a market mover given that some final October PMI readings for China, the eurozone, and Germany were revised slightly lower.

The ISM Index kicks off an important week of economic reporting that features the October employment report on Friday.

8:59 am: [BRIEFING.COM] S&P futures vs fair value: -0.60. Nasdaq futures vs fair value: +2.00. The S&P futures trade two points below fair value.

Markets finished mixed across Asia.

In economic data:
China's Manufacturing PMI (50.8 actual v. 51.1 expected, 51.1 previous) missed estimates while Non-Manufacturing PMI (53.8 actual v. 54.0 previous) dipped and HSBC Final Manufacturing PMI (50.4 actual) was in-line.
Australian building permits tumbled -11.0% MoM (-0.9% MoM expected).
India's HSBF Manufacturing PMI ticked up to 51.6 (51.0 previous).
Indonesia's core inflation rate held at 4.0% YoY.

-----

Japan's Nikkei was closed in observance of Culture Day.
Hong Kong's Hang Seng (-0.3%) gave up its early gains and finished on the lows. Energy names led to the downside with PetroChina shedding 1.5% and China Shenhua Energy giving up 2.5%.
China's Shanghai Composite (+0.4%) gained for a fifth straight session to finish at its best level since February 2013. Brokerage firms rallied across the board with Industrial Securities Co tacking on 5.1% to pace the sector's advance.

Major European bourses trade lower across the board.

Data out overnight included:
Britain's Manufacturing PMI (53.2 actual v. 51.5 expected, 51.5 previous) outpaced expectations.
Spanish Manufacturing PMI (52.6 actual v. 52.4 expected, 52.6 previous) topped estimates.
Italian Manufacturing PMI (49.0 actual v. 50.6 expected, 50.7 previous) slipped back into contraction following a positive reading in October.

-----

Great Britain's FTSE is lower by 0.7%. Financials lead to the downside with Royal Bank of Scotland and HSBC Holding off 2.0% and 1.8%, respectively.
Germany's DAX holds a loss of 0.6%. Financials outperform as Commerzbank is up 1.5% and Deutsche Bank is higher by 0.2%
France's CAC trades down 0.6%. Utilities are weak as GDF Suez and Electricite de France are lower by 2.6% and 2.4%, respectively.

8:32 am: [BRIEFING.COM] S&P futures vs fair value: -2.50. Nasdaq futures vs fair value: -2.00. There isn't a lot of conviction in the early going. The S&P futures held in a pretty narrow range throughout the overnight action and that range continues to be honored as the U.S. wakes up. Currently, the S&P futures are trading about three points below fair value.

Some early efforts to take some money off the table would be understandable in light of the very strong gains of late, yet the fear of missing out on further recovery gains going into what has been a typically good period for stocks (November-April) has fostered a bit of a wait-and see attitude at the moment.

The M&A news of note this morning included Publicis (PUBGY 17.33) buying Sapient (SAPE 17.32) for approximately $3.7 bln, or $25.00 per share, in cash, and Laboratory Corp. (LH 109.29) acquiring Covance (CVD 79.90) in a cash-and-stock deal valued at $105.12 per share or an enterprise value of approximately $5.6 bln.

In other developments, market participants will be attuned to remarks from Dallas Fed President Fisher, who will be speaking at 09:30 a.m. ET on the topic of "Preparing to Normalize Monetary Policy." Mr. Fisher is an FOMC voter this year.

8:05 am: [BRIEFING.COM] S&P futures vs fair value: -2.80. Nasdaq futures vs fair value: -3.50. The S&P futures are trading approximately three points below fair value, suggesting the cash market is on track for a modestly lower opening. Some slight downward revisions to final PMI readings for China, Germany, and the eurozone, as well as a sense the stock market is overbought and due for some consolidation after a two-week run that saw the S&P 500 gain 8.4%, have acted as some early headwinds. Even so, the futures market is still exhibiting some pretty good resilience to selling efforts. Some offsetting influences include M&A activity and an awareness that the first trading day of a new month often invites new inflows.

The Construction Spending report for September (Briefing.com consensus +0.7%) will be released at 10:00 a.m. ET alongside the ISM Index for October (Briefing.com consensus 56.2).

In corporate news:

Laboratory Corp. (LH 109.29): acquiring Covance (CVD 79.90) in stock and cash deal valued at $105.12 per share or an enterprise value of approximately $5.6 bln
Procter & Gamble (PG 87.27): Argentina accuses company of tax fraud and suspends its operations
Facebook (FB 75.25, +0.26): Up modetly after Morgan Stanley starts coverage with Overweight rating
Sysco Corp. (SYY 38.54): reports fiscal Q1 profit of $0.52 per share that was a penny ahead of estimates

Reviewing overnight developments:

Asian markets ended mixed. Japan's Nikkei was closed for Culture Day. China's Shanghai Composite +0.4%. Hong Kong's Hang Seng -0.3%. South Korea's KOSPI -0.6%.
In economic data:
China's Manufacturing PMI ticked down to 50.8 from 51.1 (expected 51.2) while Non-Manufacturing PMI decreased to 53.8 from 54.0. Also of note, the HSBC Final Manufacturing PMI held steady at 50.4
Hong Kong's Retail Sales came in at 4.8% year-over-year (prior 3.4%)
HSBC Final Manufacturing PMI for South Korea fell to 48.7 from 48.8
Australia's AIG Manufacturing Index increased to 49.4 from 46.5 while Building Approvals declined 11% (consensus -1.0%; last 3.4%)
In news:
Japanese yen continued to weaken after Friday's surprise announcement by Bank of Japan that it will be increasing its asset purchases. Dollar-yen cross up 1.2% at 113.67, marking the highest level since 2007.
Kia's president Lee Sam-woong steps aside following wage strikes by Kia's union
Major European indices trade mostly lower. Germany's DAX Index -0.6%. France's CAC-40 -0.5%. UK's FTSE 100 -0.6%.
Participants received several data points:
Eurozone Final Manufacturing PMI fell to 50.6 from 50.7 (expected 50.7)
Germany's Final Manufacturing PMI decreased to 51.4 from 51.8 (consensus 51.8)
Great Britain's Final Manufacturing PMI improved to 53.2 from 51.5 (forecast 51.2)
French Final Manufacturing PMI ticked up to 48.5 from 47.3 (expected 47.3)
Among news of note:
EUR/USD slips below 1.25, now at 1.2495 and at its lowest level in more than two years ahead of Thursday's ECB meeting
Discount operator Ryanair raised its full-year guidance, citing higher passenger count and falling unit costs
Publicis (PUBGY) acquiring Sapient (SAPE) for approximately $3.7 bln, or $25.00 per share, in cash

7:06 am: [BRIEFING.COM] S&P futures vs fair value: -3.00. Nasdaq futures vs fair value: -2.00.

7:06 am: [BRIEFING.COM] Nikkei...Holiday......... Hang Seng...23,915.97...-82.10...-0.30%.

7:06 am: [BRIEFING.COM] FTSE...6,519.19...-27.30...-0.40%. DAX...9,289.51...-37.20...-0.40%.

Dollar Strengthens on Prospects for Policy Divergence

By Rachel Evans and Andrea Wong Nov 3, 2014 5:19 PM ET

The dollar rose to the strongest in almost seven years against the yen as the Federal Reserve moves toward interest-rate increases while the Bank of Japan adds to monetary stimulus.

The U.S. currency appreciated versus all of its 16 major counterparts as a measure of manufacturing rose more than estimated. The euro fell to a two-year low against the greenback before the European Central Bank meets this week. Australia’s dollar had its biggest decline in more than two weeks before policy makers discuss monetary policy. Brazil’s real and Canada’s dollar slid.

“The environment in the U.S. is very favorable to investment,” Camilla Sutton, chief foreign-exchange strategist at Bank of Nova Scotia in Toronto, said by phone. “The broad trend is one where the U.S. dollar strengthens into year-end and into 2015.”

The dollar rose 1.5 percent to 114.05 yen at 5 p.m. New York time and reached 114.22 yen, the highest since December 2007. The U.S. currency gained 0.3 percent to $1.2482 per euro after appreciating to $1.2440, the strongest level since August 2012. The yen slipped 1.2 percent to 142.35 per euro. Japan’s financial markets were shut for a holiday.

A JPMorgan Chase & Co. gauge of global currency volatility climbed to 8.24 percent, its highest level since Oct. 16.

Real Drops

Brazil’s real fell a second day after a report last week showed the nation’s budget deficit widened to 69.4 billion reais in September, more than twice the median forecast in a Bloomberg survey of six analysts. The shortfall was the biggest since the series of data began in December 2001. The currency lost 0.7 percent to 2.4953.

The Australian dollar slipped versus most of its 31 major peers as traders are pricing in little prospect of an increase in the cash rate in 2015 and no chance Reserve Bank of Australia Governor Glenn Stevens and his board will move the benchmark interest rate from 2.5 percent.

The Aussie fell 1.3 percent to 86.81 U.S. cents.

Pacific Investment Management Co. is “actively overweight” the dollar against the Aussie, the euro and the yen, according to a note to clients on its website.

Dollar Trend

“After a decade of weakness, the U.S. dollar is strengthening,” chief investment officers Scott Mather, Mark Kiesel and Mihir Worah wrote. “The lack of synchronicity in the global economy will create some of the most compelling investment opportunities over the next year.”

Canada’s dollar fell 0.8 percent to C$1.1359 per U.S. dollar, reaching almost the lowest since June 2009. Crude oil, the country’s largest export, slid to the least in two years and the central-bank governor said low interest rates were still needed to drive growth.

Japan’s currency fell against all of its 31 major peers after the central bank said on Oct. 31 it plans to expand the monetary base by 80 trillion yen ($703 billion) a year, up from a previous 60 trillion yen to 70 trillion yen.

“In two days of actions, the yen has depreciated so massively, it’s an indication the market wasn’t positioned for this at all, and is now chasing the trend,” Paresh Upadhyaya, Boston-based director of currency strategy at Pioneer Investment Management Inc., said in a phone interview.

Pension Shift

The same day, Japanese officials unveiled reforms to the Government Pension Investment Fund that increased allocations to stocks and overseas assets by more than expected. Japan’s public retirement-savings manager will put half its holdings in local and foreign stocks and reduce domestic bonds to 35 percent of assets from 60 percent.

The Fed finished a program of bond buying on schedule last month, taking the U.S. closer to its first interest-rate increase in eight years. The central bank highlighted “solid” job gains and a falling unemployment rate in its statement on Oct. 29, while pledging to maintain borrowing costs at a record low for a “considerable time.”

The U.S. Institute for Supply Management’s manufacturing index rose to 59 last month, exceeding forecasts for a decline to 56.1. Readings greater than 50 indicate growth. A report on Nov. 7 is forecast to show the unemployment rate remained at 5.9 percent, the lowest level since July 2008.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose 0.7 percent to 1,088.07, the highest close since April 2009. It advanced 0.9 percent in October, its fourth consecutive monthly gain, the longest stretch since the period through March 2013.

“The U.S. is accelerating while the rest of the world, particularly Japan and the euro zone, is decelerating,” said Mark McCormick, a foreign-exchange strategist in New York at Credit Agricole SA. “Macro investors really are hoping for this divergence story to play out because that’s where relative value can be generated.”

To contact the reporters on this story: Rachel Evans in New York at revans43@bloomberg.net; Andrea Wong in New York at awong268@bloomberg.net

To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Paul Cox, Kenneth Pringle

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)
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