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 Post subject: March 30th Monday 2009
PostPosted: Tue Mar 31, 2009 1:33 am 
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Today's trades that were posted in real-time in #FuturesTrades chat room via my IRC user name NihabaAshi. You can review each trade from entry to exit along with commentary and an occasional trading tip because its all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=20&t=154

My Trading Performance: +17.25 Emini ES points

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Stocks' 2nd day in Reverse
Wall Street retreats again as auto and bank woes spark a selloff after the rally.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: March 30, 2009: 6:03 PM ET

NEW YORK (CNNMoney.com) -- Stocks slumped Monday, falling for a second straight session, as worries about the auto and bank industries sent investors running after the recent rally.

The Dow Jones industrial average (INDU) fell 254 points, or 3.3%. It was the biggest one-day point loss since March 5. The S&P 500 (SPX) index lost 28 points, or 3.5%. The Nasdaq composite (COMP) lost 43 points, or 2.8%.

"I think we would have had a selloff anyway, and it was made worse by the autos," said Scott Armiger, portfolio manager at Christiana Bank & Trust Company

The three major gauges had surged over 20% in less than three weeks on optimism that the economy is closer to stabilizing. After such a run, a retreat was not unexpected, analysts said.

"We had a nice 23% rally, a classic bear market rally, and then we hit resistance," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

He said stocks are bound to continue retreating when the earnings reporting period gets underway.

"Everyone knows the earnings will be terrible, but they want to hear from companies things are starting to look less terrible going forward," Rovelli said. "The problem is I don't think they are going to hear it."

Tuesday brings reports on consumer confidence, home prices and manufacturing in the Midwest.

Investors were also gearing up for the G-20 meeting of the world's biggest economies Thursday in London. President Obama is expected to address worries about some of the United States' policies and also push for greater financial regulation.

Autos: The Obama administration rejected General Motors' and Chrysler's turnaround plans, saying that a massive overhaul is needed for the companies to become viable and get more taxpayer money.

As part of the directive, GM CEO Rick Wagoner stepped down at the behest of the White House.

Armiger said that the firing of Wagoner was probably unnerving investors more than anything else.

"I don't think the market is reacting to the administration rejecting the recovery plans, but rather to the intrusion of the government into the private sector," Armiger said. "The government firing CEOs is concerning."

GM was given 60 days to come up with a better turnaround plan if it wants to receive more taxpayer money.

Chrysler was given 30 days to finish a deal with Fiat in order for the government to lend the company another $6 billion. On Monday afternoon, the automaker said that it now has a "framework" for a global alliance with Fiat, with the help of the U.S. Treasury.

Speaking Monday, President Obama said both companies need a fresh start to put their restructuring plans into play. "That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger," he said.

GM said it has a strong preference to completing restructuring out of bankruptcy, Reuters reported. But worries that one of the two might have to declare bankruptcy dragged on the auto sector and broader market.

GM (GM, Fortune 500) shares fell 25%, Ford Motor (F, Fortune 500) lost 2.8%, Toyota Motor (TM) lost 3%. Chrysler is privately held.

President Obama also announced that the federal government will honor new warranties on cars bought from GM or Chrysler.

Financials: Treasury Secretary Tim Geithner said Sunday that the government has about $135 billion left to bail out banks. He left the door open on whether he'll ask Congress for more money.

Shares of Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) were among decliners.

An exception was Fifth Third Bancorp (FITB, Fortune 500), which rallied 5% on news that it is selling its payments processing business to Advent International for $561 million. Shares gained 5%.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by almost 8 to 1 on volume of 1.51 billion shares. On the Nasdaq, decliners topped advancers by over 3 to 1 on volume of 2.06 billion shares.

Bonds: Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.71% from 2.76% Friday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate fell to 1.21% from 1.22% Friday, according to Bloomberg.com. The overnight Libor rate rose to 0.29% from 0.28%. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets ended lower and European markets tumbled in afternoon trading.

In currency trading, the dollar gained against the euro and fell against the yen.

U.S. light crude oil for May delivery settled down $3.97 to settle at $48.41 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $7.60 to settle at $917.70 an ounce.

Yahoo! Finance

4:30 pm : The possibility that General Motors and Chrysler may be facing bankruptcy along with renewed concerns that banks may need more federal financing provided market participants with two good reasons to sell stocks Monday. The downward move was underscored by broad-based weakness, which took the S&P 500 to a 3.5% loss. The S&P 500 has fallen more than 5% during the course of the last two sessions.

Stocks were under pressure for the entire session. Pessimism was provoked by news the U.S. government's auto task force determined that neither General Motors (GM 2.70, -0.92) nor privately held Chrysler submitted viable restructuring plans. The task force also indicated bankruptcy may be required for the two companies. Shares of GM lost one quarter of their market cap as a result.

In a statement, GM indicated it will address the issues to improve its long-term viability, including restructuring financial obligations.

Though automakers (-8.3%) and autoparts and equipment companies (-5.9%) displayed marked weakness for the entire session, financial stocks weighed the most on trading. Financials fell 9.4% after Treasury Secretary Geithner stated this last weekend that banks may need more bailout funds. The news weighed most heavily on diversified banks (-13.5%) and diversified financial services companies (-12.0%).

Consumer finance companies (-12.9%) also showed weakness, but their decline was more closely related to an article in The Wall Street Journal indicating an accounting rule change could block capital for certain credit card issuers.

Gains among financials were few and far between, but Fifth Third Bancorp (FITB 2.48, +0.13) was able to trade higher after announcing it will sell a majority stake in its processing business to Advent for $561 million in cash. The two companies will operate the business as a joint venture.

Though all 10 sectors in the S&P 500 closed lower, health care (-0.7%) was the only one able finish with a loss of less than 1%. Abbott Labs (ABT 47.89, +1.29) provided support to the sector, thanks to favorable reports about one of the company's stents, and separate reports late in the session that indicated Abbott held preliminary talks with Wyeth (WYE 43.00, -0.11), which suggest the company is open to ride the sector's recent merger wave.

The session's broad sense of pessimism prompted a broad-based selling effort, in which more than 90% of the companies in the S&P 500 closed with losses. Still, stocks were able to pare a portion of their losses heading into the close as the S&P 500 found support at a key technical support level around 781.

Participants return to Tuesday's trading without many market-moving earnings or economic reports to digest. There are no earnings reports of consequence heading into tomorrow's open, and the only noteworthy items on the day's economic calendar include the S&P/Case-Shiller Home Price Index for January and the Consumer Confidence Index for March. However, investors are heading into quarter-end, which could lead to additional volatility in the coming session.DJ30 -254.16 NASDAQ -43.40 NQ100 -2.5% R2K -3.0% SP400 -3.5% SP500 -28.41 NASDAQ Dec/Adv/Vol 2045/619/2.04 bln NYSE Dec/Adv/Vol 2740/356/1.51 bln

3:30 pm : Several key commodities closed pit trading with sizable losses. Their weakness was partly owed to a stronger dollar, which was up 0.9% against a basket of major foreign currencies, while a broader sense of pessimism accounted for the remainder of weakness.

Crude oil contracts traded with weakness since the start of pit trading. Oil prices managed to stay above the $50 level for much of the session, but inevitably closed pit trading near session lows at $48.41 per barrel, reflecting a loss of 7.6%.

Natural gas contracts were able to reverse early declines to log a gain, however. Natural gas for May delivery closed the session at $3.75 per contract, up fractionally.

Both gold and silver were unable to put together a sustainable advance as they retreated from early gains to close with a loss. Gold contracts ended pit trading pricing the yellow metal at $915.50 per ounce, down 0.8%. Silver prices were quoted 1.7% lower at $13.03 per ounce upon the session's close.

Meanwhile, the Baltic Dry Index fell for the twelfth consecutive session, dropping 1.9%. All subindices lost ground, but the Panamax Index registered the steepest loss of the group by falling 3.9% this session. DJ30 -273.36 NASDAQ -46.93 SP500 -29.62 NASDAQ Dec/Adv/Vol 2105/566/1.62 bln NYSE Dec/Adv/Vol 2770/315/975 mln

3:00 pm : Losses in all three headline indices remain deep and broad-based. Though weakness is widespread, financials are leading the decline as they fall 8.2% to their session low.

Within the S&P 500 financial sector, less than 3% of components are trading with a gain. Fifth Third (FITB 2.45, +0.10) is one of the few names to attract positive attention; the company's shares are up after it announced it is selling a majority stake in its processing business to Advent for $561 million in cash.DJ30 -330.86 NASDAQ -58.89 SP500 -35.97 NASDAQ Dec/Adv/Vol 2156/494/1.47 bln NYSE Dec/Adv/Vol 2810/257/861 mln

2:30 pm : The major indices trade slightly above session lows. Losses are substantial.

All ten sectors trade with a loss, ranging from -1.2% (healthcare) to -7.9% (financials).DJ30 -294.86 NASDAQ -49.78 SP500 -31.32 NASDAQ Dec/Adv/Vol 2118/514/1.34 bln NYSE Dec/Adv/Vol 2763/291/776 mln

2:00 pm : The Dow and S&P 500 fall to a fresh session low in broad-based weakness. The S&P 500 is now down 4%. The Nasdaq remains modestly above its worst level.

Selling interest is widespread, with decliners outpacing advancers by more than 10-to-1 on the NYSE and 5-to-1 on the Nasdaq.DJ30 -305.37 NASDAQ -53.76 SP500 -32.99 NASDAQ Dec/Adv/Vol 2128/486/1.24 bln NYSE Dec/Adv/Vol 2783/257/705 mln

1:30 pm : Losses continue to weigh on the broader market. Health care has managed to hold up relatively well against the session's selling effort, though.

The health care sector is currently down 0.8%, which is less than any other major sector in the S&P 500. Health care's relative strength comes from gains by Bristol-Myers Squibb (BMY 21.12, +0.46) and Abbott Labs (ABT 47.80, +1.20). During the weekend reports indicated one of the Abbott's stents showed safety advantages over a primary stent marketed by Boston Scientific (BSX 8.02, -0.18).

Though not a primary leader in the health care sector, Johnson & Johnson (JNJ 52.90, +0.07) is also trading higher. It is currently the only stock in the Dow Jones Industrial Average to trade higher.DJ30 -258.30 NASDAQ -47.66 SP500 -27.79 NASDAQ Dec/Adv/Vol 2082/510/1.15 bln NYSE Dec/Adv/Vol 2722/298/656 mln

1:05 pm : Stocks are being pummeled as market participants opt to lock in gains by selling. This session's downturn carries over from losses seen Friday, which means stocks are now down more than 5% for the past two sessions. Leading up to the recent two-session sell-off, stocks had climbed almost 25% since reaching their March low.

Financials continue to underpin the direction of the broader market. Financials led gains from the March lows by soaring 60% until the recent back-to-back selling effort. Financials have dropped almost 10% in the past two sessions, including this session's 6.5% downturn.

The most recent move against financials comes after Treasury Secretary Geithner indicated banks may need more bailout funds. Geithner also indicated roughly $135 billion will be left in available bailout funds after some funds are returned by banks, but did not indicate whether additional funds will be requested.

Diversified banks (-5.6%), diversified financial services companies (-8.6%), and consumer finance companies (-9.3%) are among the financial sector's worst performing industry groups this session.

European bank shares have also been hit with selling pressure, though their weakness is more closely linked to news that the Spanish central bank has taken over the operations of a savings bank, and the Bank of England has announced the transfer of certain assets of a building society, which has rekindled fears of bank nationalization.

Automakers (-6.3%) and autoparts and equipment makers (-6.7%) are seeing selling pressure after the U.S. government's auto task force determined that neither General Motors (GM 2.87, -0.75) nor privately held Chrysler had submitted viable restructuring plans, and also indicated bankruptcy may be required for the flagging auto companies.

President Obama stated in a press conference that the Treasury will provide working capital financing for GM for 60 days while GM completes a more accelerated and aggressive restructuring. Some contend the 60 days of capital seems like a lifeline long enough for GM to ready itself for a prepackaged bankruptcy.

GM indicated it will address the issues to improve the long-term viability of the company, including the restructuring of the financial obligations to the bond holders, unions, and other stakeholders.

The negative news items have prompted a broad-based selling effort, in which more than 90% of the companies in the S&P 500 are trading with losses.DJ30 -276.94 NASDAQ -50.42 SP500 -29.26 NASDAQ Dec/Adv/Vol 2096/480/1.08 bln NYSE Dec/Adv/Vol 2744/271/612 mln

12:30 pm : Stocks are pulling up from their session lows. The upward move has been slower in the making for the Dow and the S&P 500 than it has been for the Nasdaq Composite.

The Nasdaq Composite was down 3.9% at its session low, but has retraced more than 20% of this session's loss. The Nasdaq's loss is also less steep than that of the Dow or S&P 500.DJ30 -252.41 NASDAQ -46.09 SP500 -26.16 NASDAQ Dec/Adv/Vol 2064/479/982 mln NYSE Dec/Adv/Vol 2709/283/558 mln

12:00 pm : Stocks continue to trade with marked weakness. Declines specific to large-cap tech stocks have taken the Nasdaq 100 to a year-to-date loss.

For several weeks the Nasdaq 100 had been sporting a gain for the year, while the Dow Jones Industrial Average (-14.5% ytd), Nasdaq Composite (-5.3% ytd), S&P 500 (-12.8% ytd), S&P 400 Mid-Cap Index (-10.8% ytd), and Russell 2000 Small-Cap Index (-17.2% ytd) all traded with year-to-date losses. The Nasdaq 100 has now joined their ranks as it trades with a fractional year-to-date loss upon shedding 3.2% in the current session.DJ30 -277.66 NASDAQ -53.28 SP500 -28.74 NASDAQ Dec/Adv/Vol 2098/392/570 mln NYSE Dec/Adv/Vol 2725/244/491 mln

11:30 am : President Obama recently concluded a speech regarding assistance to get automakers through their current challenges. Obama indicated the auto industry will not vanish after the auto task force decided the restructuring plans submitted by General Motors (GM 2.94, -0.68) privately held Chrysler were not viable, and that the use of bankruptcy may be required.

Obama also indicated during his speech that bankruptcy may be used as a mechanism to help automakers quickly restructure and emerge stronger. Use of bankcruptcy could make it easier to clear away old debts that are weighing the companies down. DJ30 -283.23 NASDAQ -56.31 SP500 -29.57 NASDAQ Dec/Adv/Vol 2094/372/779 mln NYSE Dec/Adv/Vol 2739/214/452 mln

11:00 am : Losses remain considerable as sellers move against stocks in virtually indiscriminate fashion; more than 97% of the companies in the S&P 500 are trading with losses.

Each of the major indices are near session lows.

Materials stocks (-4.4%) are seeing some of the most intense selling pressure. Steel stocks are down 7% amid select earnings revisions by analysts, while metals and mining companies like Alcoa (AA 6.84, -0.96) are seeing continued weakness. DJ30 -270.73 NASDAQ -56.03 SP500 -28.43 NASDAQ Dec/Adv/Vol 2069/336/649 mln NYSE Dec/Adv/Vol 2722/198/388 mln

10:30 am : Stocks continue to trade with deep losses. Commodities are generally weaker, too, but there are some spots of relative strength.

Crude oil futures prices are down 4.1% to $50.21 per barrel. Crude prices actually dipped below the $50 per barrel level earlier in the session. That was the first time in roughly eight sessions that crude was so low.

Natural gas prices are also down. Futures contracts for natural gas are down 0.4% to $3.72 each.

Gold contracts have overcome early weakness to trade with a gain. Gold prices were down modestly, but are now up 0.5% to trade at $927.80 per ounce.

Silver is still down, though. Silver prices were recently quoted 0.4% lower at $13.26 per ounce.

The CRB Commodity Index is down 1.4%, which extends its two-session slide to 3.7%.DJ30 -264.51 NASDAQ -55.44 SP500 -27.15 NASDAQ Dec/Adv/Vol 2007/343/492 mln NYSE Dec/Adv/Vol 2701/179/326 mln

10:00 am : Stocks are putting together their worst two-session performance by percent in roughly one month. With Friday's 2.0% drop, stocks are now down 4.8% during the last two sessions.

The downward push comes as market participants move to take profits. Given the lack of improvement in the broader economy, many investors believe it is prudent to take some money off the table after watching stocks climb roughly 8% since the beginning of the month. Fears of bankruptcy for General Motors (GM 2.70, -0.92) and concern that banks may need more federal financing is helping influence that decision this session.

Early movers: Trading up: TWX +114.4%, SPRD +30.7%, PRSC +28.2%, FAZ +15.7%, FXP +11.5%, ROSE +7.3%. Trading down: GM -29.3%, LNC -27.4%, ARNA -27.1%, MTW -23.9%, NCS -22.9%, DRYS -17.2%, F -15.9%, NCR -15.2%, BCS -14.9%, FAS -14.8%, EXM -14.7%, AGO -14.5%, CENX -14.2%, TRW -14%, KLIC -13.7%, EDC -13.4%, C -13.4%, CETV -12.9%, ING -12.8%, CTBK -12.7%, PFG -12.4%, PACR -12.3%, ACH -12.1%DJ30 -227.08 NASDAQ -44.30 SP500 -23.00 NASDAQ Dec/Adv/Vol 1919/325/313 mln NYSE Dec/Adv/Vol 2642/176/222 mln

09:45 am : Stocks are dropping amid broad-based weakness. All 10 major sectors in the S&P 500 are down by at least 1%.

Per usual, the financial sector is leading the action; financials are down 5.5% as shares of Citigroup (C 2.30, -0.32) and Bank of America (BAC 6.54, -0.80) are whacked with selling pressure. Their decline follows comments from Treasury Secretary Geithner that indicated banks may need more bailout funds even though some banks are returning the funds. Bank of America recently indicated it plans to soon return the federal aid it received.

With equities under pressure, Treasuries are garnering interest. The 10-year Note, a benchmark for Treasuries, is currently up 18 ticks.DJ30 -216.41 NASDAQ -46.02 SP500 -23.29 NASDAQ Dec/Adv/Vol 1877/320/210 mln NYSE Dec/Adv/Vol 2605/146/160 mln

09:15 am : S&P futures vs fair value: -18.50. Nasdaq futures vs fair value: -21.50. The U.S. government's auto task force has determined that neither General Motors (GM) nor privately held Chrysler submitted viable restructuring plans, and went on to indicate the use of bankruptcy may be required for GM and Chrysler. The White House is expected to make additional comments regarding automakers today. Shares of GM are trading roughly 20% lower at $2.88 per share in premarket action. Fears of bank nationalization are being rekindled in Europe after the Spanish central bank took control over the operations of a savings bank, and the Bank of England announced the transfer of certain assets of a building society. That, combined with word from Treasury Secretary Geithner that some banks will need more bailout money, is weighing on U.S. bank shares ahead of the opening bell. JPMorgan Chase (JPM) is down nearly 5% to $26.10 per share and Bank of America (BAC) is down almost 9% to $6.71 per share in premarket trading. Citigroup (C) is indicated 13% lower at $2.28 per share ahead of the opening bell. There are no market-moving earnings or economic announcements scheduled for this morning.

09:00 am : S&P futures vs fair value: -16.80. Nasdaq futures vs fair value: -20.00. Asian stocks were hit with a stiff selling effort Monday. The MSCI Asia-Pacific Index fell 3.8% in the wake of reports indicating some U.S. banks will need more government aid, while the U.S. auto task force indicated bankruptcy may be the best option for General Motors and privately held Chrysler. That hampered Honda Motor (HMC) and Toyota Motor (TM), which both closed Asian trading with losses, sending Japan's Nikkei down 4.5%. Mizuho Financial (MFG) and Mitsubishi UFJ Financial (MTU) were primary laggards in the financial space. In economic news, Japanese industrial output slid for the fifth consecutive month. In Hong Kong, the Hang Seng dropped 4.7%. Blue chip stocks were under pressure following earnings reports. Aluminum of China (ACH), better known as Chalco, posted a bigger-than-expected loss in the fourth quarter. Construction Bank slid after missing its fourth quarter earnings forecasts amid increased impairments on bad loans. In mainland China, the Shanghai Composite declined 0.7%.

08:35 am : S&P futures vs fair value: -15.80. Nasdaq futures vs fair value: -19.50. With bankruptcy fears surrounding General Motors (GM) and privately held Chrysler, European automakers are down markedly. Daimler and Volkswagen are primary laggards on Germany's DAX, which is down 3.1%. News that there have been asset takeovers and transfers by Spain's central bank and the Bank of England are weighing on financials. As such, Deutsche Bank (DB) and Allianz (AZ) are trading with weakness. Fear of more government intervention is weighing on HSBC (HBC) and Barclays (BCS), which are leading losses in Britain's FTSE. However, the refusal of Barclays to partake in the government's toxic asset insurance plan is weighing on the stock. The decision comes just days after the company passed a government stress test. The FTSE is down 2.0%. Meanwhile, France's CAC is down 2.1% amid weakness in BNP Paribas and Societe Generale.

08:05 am : S&P futures vs fair value: -15.10. Nasdaq futures vs fair value: -20.00. There are no market-moving earnings or economic announcements scheduled for this morning, but news that the government's auto task force determined that neither General Motors (GM) nor privately held Chrysler had submitted viable restructuring plans has created some rumblings ahead of the opening bell. The task force went on to indicate it doesn't believe that Chrysler is viable as a stand-alone company, and use of bankruptcy may be required for GM and Chrysler. GM's taks force has pushed GM's chief exectutive, Rick Wagoner, out of the company, but indicated it has no intention of replacing Chrysler's Robert Nardelli. Separately, Reuters reported Treasury Secretary Geithner declined to comment about steps to help automakers, which are expected to be announced by the White House Monday. There are reports that the Spanish central bank has taken over the operations of a savings bank, and the Bank of England has announced the transfer of certain assets of a building society. The news has rekindled fears of nationalization in Europe, which is undercutting U.S. bank stocks in premarket trading. Stock futures currently point to a markedly lower start for the U.S. indices.

06:24 am : S&P futures vs fair value: -17.60. Nasdaq futures vs fair value: -27.80.

06:24 am : Nikkei...8236.08...-390.90...-4.50%. Hang Seng...13456.33...-663.20...-4.70%.

06:24 am : FTSE...3807.51...-91.30...-2.30%. DAX...4059.90...-143.60...-3.40%.


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