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 Post subject: April 7th Tuesday 2009
PostPosted: Tue Apr 07, 2009 11:18 pm 
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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=160

My Trading Performance: +8.75 Emini ES points

---------------------------------



Stocks Take A Second Step Back
Wall Street continues its slide after a four-week advance as investors brace for quarterly results. Alcoa reports a wider-than-expected loss.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: April 7, 2009: 6:18 PM ET

NEW YORK (CNNMoney.com) -- Stocks fell Tuesday, retreating for a second straight session after a four-week advance, on worries about banks and autos and the start of the quarterly reporting period.

The Dow Jones industrial average (INDU) lost 186 points, or 2.3%. The S&P 500 (SPX) index dipped 20 points, or 2.4%. The Nasdaq composite (COMP) fell 45 points, or 2.8%.

After the close, Alcoa (AA, Fortune 500) reported a first-quarter loss of 59 cents per share, wider than the 56 cents per share loss analysts surveyed by Thomson Reuters were expecting. The aluminum maker earned 44 cents a year earlier.

Revenue fell to $4.1 billion from $7.375 billion a year ago, versus forecasts for a steeper drop to $4.077 billion. Alcoa is typically the first Dow component and major company to report results. Shares fell 3% in extended-hours trading after rising just after the release of the report.

Alcoa is just the start of what is going to be a poor earnings reporting period, with results set to slump at least 35% versus a year ago, said Ram Kolluri, director and chief investment officer at ICICI Group Global Private Clients.

Stocks have been retreating this week in the aftermath of a swift rally that propelled the major gauges more than 20% off multi-year lows.

"We had this rally on optimism that the banking system is stabilizing, but the advance was somewhat premature," Kolluri said. "Now the reality of the earnings is going to hit us."

Tuesday's market: General Motors is preparing for the possibility of filing for bankruptcy, if it can't meet the government's reorganizing deadline of June 1, according to a source familiar with the company's plans. The news dragged on investor sentiment and sent GM (GM, Fortune 500) shares down by 12%. Healthier rival Ford Motor (F, Fortune 500) lost 7.5%.

Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500) and other oil services stocks slipped along with the price of oil, which closed below $50 a barrel.

Meanwhile, a number of bank stocks weakened for a second straight session. The KBW Bank (BKX) index lost 3.5%.

Beyond the corporate news, stocks were vulnerable to a pull back anyway, following a big four-week rally that saw all three major gauges jump at least 20%.

Since bottoming at a 12-year low on March 9, the Dow has rallied 21%, its best four-week run since 1933, when it added 31%. The advance was driven in part by optimism that the economy and financial sector are close to stabilizing.

But after such a run, a turnaround was fairly typical, said Tom Schrader, managing director at Stifel Nicolaus. He said stocks could even go back to "retest" those March lows, before making a bigger move higher.

"I think the lows will hold this time," he said, noting that the outlook was a lot more grim in the fall during previous attempts at finding a floor.

"The doomsday scenario has gone by the wayside," he said. "There's still a long way to go, in terms of the economy, the housing market, the banks, but there's definitely more optimism in the market than in those previous attempts."

On Monday, a breakdown in merger talks between IBM and Sun Microsystems weighed on techs. Bank shares were bludgeoned after an influential analyst said the default rate on loans will approach the percentages seen during the Great Depression.

GM prepares for bankruptcy: As GM struggles to meet the government's June 1 restructuring deadline, it is also preparing for bankruptcy, a source told CNNMoney.com.

The company is still trying to get concessions from its unions and creditors ahead of the Obama administration deadline, but it is also in "intense and earnest" preparations for a possible filing, the source said.

GM and privately-held Chrysler have both received billions in government aid. (Full story)

Separately, GM said that it has paired with Segway to create a two-wheeled, two-seat, electrically powered vehicle for city navigation. Project P.U.M.A. - Personal Urban Mobility and Accessibility - was unveiled Tuesday in New York.

Economic news: Borrowing costs slipped, following a one-month advance, the Federal Reserve said Tuesday. Consumer credit fell 3.5% in February after rising 1.8% in January. Economists surveyed by Briefing.com thought it would fall 1.5%.

Bonds: Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.75% from 2.87% Monday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate fell to 1.15% from 1.16% Monday, according to Bloomberg.com. The overnight Libor rate inched higher to 0.28% from 0.27% Monday. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian and European markets tumbled.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for May delivery fell $1.90 to settle at $49.15 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $10.50 to settle at $883.30 an ounce.

Yahoo! Finance

4:30 pm : There weren't any major headlines to digest Tuesday, leaving market participants to prepare for earnings season, which unofficially starts this evening when Dow component Alcoa (AA 7.79, -0.12) reports its latest quarterly results.

With what is expected to be another downbeat earnings season on the horizon, participants moved to take profits for the second straight session. The decision to hedge against further disappointment has led participants to send stocks 3.2% lower during the course of the past two sessions. The selling effort has also helped lock in gains registered in recent weeks; stocks are still up 22% from their March lows.

This session's losses were broad-based as more than 90% of the companies in the S&P 500 closed lower. Losses ranged from telecom's 3.7% drop to health care's 0.8% decline.

Health care's relative resilience was largely owed to strength in shares of managed health care providers (+4.3%). The group was able to rebound from weakness in prior sessions after 2010 Medicare Advantage rates turned out to be better than initially feared.

Financial stocks performed in-line with much of the broader market for almost the entire session, but a late selling effort forced the sector to close at its session low with a 3.2% loss. REITs were some of the worst performing holdings in the financial sector. Industrial REITs lost 13.2%, diversified REITs fell 11.5%, and residential REITs sank 10.5%.

The influence of financials caused the broader market to close in weak fashion.

Banks and financial services companies were at the center of weakness in Europe, where Britain's FTSE fell 1.6%, Germany's DAX declined 0.6%, and France's CAC closed 0.9% lower.

Royal Bank of Scotland (RBS 7.72, -1.16) announced the United Kingdom government will take a 70% stake in RBS. The bank is also cutting 9,000 jobs during the next couple of years, according to reports.

Financial giants Mitsubishi UFJ (MTU 4.94, -0.12) and Mizuho Financial (MFG 3.86, -0.08) undercut Japan's Nikkei, which closed 0.3% lower. Hong Kong's Hang Seng slipped 0.5%.

Commodities trading was mixed as crude oil futures contracts faced selling pressure throughout the session and closed at $49.28 per barrel, down 3.5%. In contrast, June gold futures contracts closed 1.2% higher to close at $883.30 per ounce, just below its session high.DJ30 -186.29 NASDAQ -45.10 NQ100 -2.9% R2K -3.5% SP400 -3.3% SP500 -19.93 NASDAQ Adv/Vol/Dec 649/1.88 bln/2033 NYSE Adv/Vol/Dec 647/1.26 bln/2368

3:35 pm : Crude oil and natural gas futures traded down for the entire session, but precious metals were a bright spot.

May crude oil futures contracts faced selling pressure throughout the session and closed at $49.28 per barrel, down 3.5%.

May natural gas futures contracts closed down 4.5% at $3.57 per contract, just $0.01 above the low for the session.

In contrast, June gold futures contracts closed 1.2% higher to close at $883.30 per ounce, not far below its session high of $886.90 per ounce.

May silver futures contracts also finished higher on the session. Aside from a midday dip to $12.11 per ounce, the futures contracts traded in positive territory for most of the session, and closed at $12.21, higher by less than 0.8%.DJ30 -178.17 NASDAQ -41.01 SP500 -16.73 NASDAQ Adv/Vol/Dec 691/1.5 bln/1987 NYSE Adv/Vol/Dec 662/850 mln/2335

2:30 pm : Retailers are down 3.0%, underperforming the broader market by a fair margin. The group's downturn comes largely as a result of this session's broad, negative bias.

Home improvement retailers Lowes (LOW 18.60, -0.80) and Home Depot (HD 24.21, -0.64) are leading the decline by retailers. Even TJX Companies (TJX 25.75, -0.19) is trading lower despite the fact the company announced it is increasing its quarterly dividend by 9% to $0.12 per share.

Gains among retailers are relatively isolated. American Apparel (APP 3.43, +0.33) is one of the few retailers to log a gain this session. There is no specific catalyst accounting for APP's advance, though.DJ30 -197.12 NASDAQ -45.59 SP500 -19.64 NASDAQ Adv/Vol/Dec 648/1.24 bln/1988 NYSE Adv/Vol/Dec 605/711 mln/2366

2:00 pm : Weakness is persistent. Losses in the Nasdaq continue to outpace those being experienced by blue chips in the Dow and the broader S&P 500.

This session's downturn has actually resulted in a year-to-date loss for the Nasdaq; the Nasdaq is now down 0.8% for the year.DJ30 -190.12 NASDAQ -41.33 SP500 -18.48 NASDAQ Adv/Vol/Dec 682/1.14 bln/1931 NYSE Adv/Vol/Dec 635/649 mln/2338

1:30 pm : The major indices are trading at fresh session lows. The downward move by the S&P 500 and the Dow have been rather gradual, but the Nasdaq's decline has been more precipitous.

The Nasdaq's drop comes as losses mount among large-cap tech names Cisco (CSCO 16.68, -0.85), Apple (AAPL 114.32, -4.13), and Google (GOOG 355.57, -12.67).DJ30 -199.59 NASDAQ -44.88 SP500 -19.45 NASDAQ Adv/Vol/Dec 648/1.04 bln/1927 NYSE Adv/Vol/Dec 607/604 mln/2339

1:00 pm : Stocks have been contending with a concerted selling effort since the opening bell. The resulting losses have been broad-based.

Health care (-0.1%) has been relatively resilient to this session's weakness. Support is coming from managed health care providers (+5.8%), which are gaining ground after the final 2010 Medicare Advantage rates turned out to be better initially feared.

Biotech and drug outfit Immucor (BLUD 22.85, -1.21) initially provided support to the health care sector, but has since faltered to trade with a loss. The stock's decline comes despite better-than-expected quarterly earnings results and upside guidance.

Immucor's report comes ahead of earnings season's unofficial start. Earnings season unofficially begins when Dow component Alcoa (AA 7.77, -0.14) reports after this session's close.

Overall news flow has been slow for the second straight session. Traders are reacting to the lack of headlines by taking profits. The move to take money off of the table isn't terribly surprising, however. In the four session's leading up to this week, the stock market had advanced nearly 7%. Financials led the way by climbing more than 17% during that same time frame, thanks to hope that the banking industry may be improving. That notion was put in check yesterday, though.

Despite last week's advance by financials, the sector isn't necessarily at the center of the recent selling effort. Financials are currently down 0.8%, while the broader market shows greater losses. DJ30 -150.69 NASDAQ -28.76 SP500 -13.17 NASDAQ Adv/Vol/Dec 779/919 mln/1770 NYSE Adv/Vol/Dec 763/544 mln/2153

12:30 pm : Managed health care stocks (+4.1%) are sporting solid gains this session, helping limit the health care sector's loss to 0.4%. The strength in the industry comes after the final 2010 Medicare Advantage rates were released. Medicare Advantage rates will decline next year by roughly 3%, but the reduction will be less than initially feared, giving way to a bit of relief trade in the group.

Separately, shares of General Motors (GM 2.02, -0.25) have fallen to fresh session lows amid ongoing fear that the company may be facing bankruptcy. According to Reuters.com source, GM is in intense and earnest preparations for a possible bankruptcy filing. The report indicated that a plan to separate the company's most successful units from its less-profitable units is gaining momentum as the company's best configuration for the future. Automakers are down 8.1%.DJ30 -168.65 NASDAQ -30.86 SP500 -14.82 NASDAQ Adv/Vol/Dec 733/827 mln/1782 NYSE Adv/Vol/Dec 703/494 mln/2199

12:00 pm : Losses remain broad-based as 85% of the companies in the S&P 500 trade in negative ground.

Bucking the negative trend, Brinker International (EAT 16.95, +0.70), owner of Chili's Bar & Grill, Ramano's Macaroni Grill, and On The Border Mexican Grill & Cantina, is seeing its stock stage a healthy advance. The positive interest follows the company's upside guidance, which called for fiscal third quarter earnings to range from $0.44 to $0.45 per share. The consensus estimate was pegged at $0.29 per share.DJ30 -161.04 NASDAQ -28.09 SP500 -14.39 NASDAQ Adv/Vol/Dec 758/746 mln/1723 NYSE Adv/Vol/Dec 719/446 mln/2160

11:30 am : Biotech and drug outfit Immucor (BLUD 22.70, -1.36) has reversed early gains to trade with a loss. The selling pressure comes even though the company exceeded the consensus earnings estimate for the latest quarter by posting earnings of $0.27 per share. The company also indicated it expects earnings for 2009 to be at or modestly above $1.02 per share, which is above the $0.99 per share that had been forecast by analysts.

During its conference call, Immucor indicated capital purchases continue to be under pressure due to restrictive hospital budgets. Margins have also been negatively impacted by higher-than-normal manufacturing variances. DJ30 -133.25 NASDAQ -23.30 SP500 -11.37 NASDAQ Adv/Vol/Dec 753/633 mln/1684 NYSE Adv/Vol/Dec 737/388 mln/2109

11:00 am : Stocks have pared their losses, but continue to trade with widespread weakness.

Utilities stocks have actually made their way into positive ground, however. The sector is up just 0.1% with leadership from shares of PG&E (PCG 38.13, +1.34), which were upgraded by analysts at Credit Suisse. Electric utilities giant Duke Energy (DUK 13.87, -0.19) is trading as a laggard among utilities stocks; DUK shares were downgraded by Credit Suisse.DJ30 -135.00 NASDAQ -22.69 SP500 -12.79 NASDAQ Adv/Vol/Dec 802/526 mln/1582 NYSE Adv/Vol/Dec 703/323 mln/2091

10:30 am : Stocks remain stuck in a rut, but commodities are seeing mixed interest.

Crude oil prices are showing continued weakness as the price of oil slips below the $50 per barrel mark. Crude futures contracts were recently pricing oil 2.6% lower at $49.70 per barrel.

Natural gas prices are also under pressure. Natural gas contracts for May delivery were recently quoted at $3.60 each, down 3.6%.

Precious metals traders are attempting to put an end to gold's three-session losing streak by bidding gold prices higher. Gold was recently quoted at $880.90 per ounce, up 1.1%.

Meanwhile, silver prices are also moving higher. Silver was recently trading hands at $12.22 per ounce, up 0.9%.

The CRB Commodity Index is currently down a modest 0.1%.

The Baltic Dry Index shed 1.3%. Among the subindices, the Capesize Index was the sole advancer. It gained 0.6%.DJ30 -145.35 NASDAQ -25.66 SP500 -15.34 NASDAQ Adv/Vol/Dec 615/382 mln/1711 NYSE Adv/Vol/Dec 544/241 mln/2232

10:00 am : The Nasdaq and S&P 500 have made incremental-to-modest improvements from earlier levels, but the Dow has been unable to pare its losses thus far. Within the Dow, 29 of its 30 components are trading with losses.

Microsoft (MSFT 19.05, +0.29) is the only Dow component to sport a gain. Its shares were recently upgraded.DJ30 -157.06 NASDAQ -28.15 SP500 -16.08 NASDAQ Adv/Vol/Dec 502/242 mln/1695 NYSE Adv/Vol/Dec 439/158 mln/2258

09:40 am : Losses in the first few minutes of trading are broad-based; all 10 of the major sectors in the S&P 500 are in the red, and declining issues on the New York Stock Exchange outnumber advancers by more than 7-to-1.

Early losses are the steepest within the telecom sector. Telecom is currently down 3.4% amid weakness in integrated telecom giants AT&T (T 25.56, -0.62) and Verizon (VZ 31.72, -0.85).

Consumer staples stocks are seeing the least selling pressure. The sector is still down 1.0%, though. Procter & Gamble (PG 49.20, -0.43) is helping to limit some of the downside pressure.DJ30 -146.42 NASDAQ -29.03 SP500 -17.15 NASDAQ Adv/Vol/Dec 406/107 mln/1635 NYSE Adv/Vol/Dec 337/82 mln/2283

09:20 am : S&P futures vs fair value: -16.80. Nasdaq futures vs fair value: -20.30. Stock futures continue to point toward a lower start for the major indices. Selling pressure comes as market participants move to take profits after watching stocks put together a string of solid gains in recent weeks. The decision to sell also comes ahead of what is likely to be another disappointing earnings season, which will put forecasts under sharp focus since investors continue to clamor for signs of a turnaround. For now, though, news remains slow.

09:05 am : S&P futures vs fair value: -15.70. Nasdaq futures vs fair value: -17.50. Diversified banks and diversified financial services companines are showing particular weakness ahead of the opening bell. In premarket trading, shares of JPMorgan Chase (JPM) are down roughly 2.2% to $27.59 per share; shares of Bank of America (BAC) are down 3.3% to $7.23 per share, and Wells Fargo (WFC) shares are down 3.3% to $14.75 per share. Much of their downturn comes as investors and traders move to take profits after watching diversified banks stocks and diversified financial services stocks soar almost 44% and 60%, respectively, during the month leading up to this week. The surge by financials helped drive gains in the broader market, but the broader move was recently characterized as a bear market rally by famed investor George Soros. Soros noted that the economy has yet to turn around. Moreover, weakness in the broader market this morning comes as foreign indices slide; much of their weakness stems from declines among financial stocks as well.

08:35 am : S&P futures vs fair value: -15.20. Nasdaq futures vs fair value: -17.00. The major European bourses are trading with marked weakness this session. Their decline comes largely as a result of falling bank share prices. HSBC (HBC) is a primary laggard on Britain's FTSE, which is down 1.9%. Royal Bank of Scotland (RBS) is also trading lower. The company indicated that the government's stake in the bank's operations will rise to 70%, according to Reuters. Meanwhile, a Dow Jones report indicates the RBS will cut 9,000 jobs in the next two years. Deutsche Bank (DB) is weighing on Germany's DAX, which is down 1.1%. Allianz (AZ) is a primary laggard in the DAX, however. As for France's CAC, which is down 1.3%, BNP Paribas, Societe Generale, and Total (TOT) are leading losses. In Asia, Japan's Nikkei slipped just 0.3%. The Japanese Central Bank said Tuesday that it would accept loans on deeds to municipal goverments as collateral from lenders, and also voted unanimously to leave its benchmark interest rate unchanged at 0.1%. Meanwhile, Hong Kong's Hang Seng shed 0.5%.

08:05 am : S&P futures vs fair value: -16.60. Nasdaq futures vs fair value: -20.50. Despite signs of support heading into the prior session's close, stocks are back under pressure this morning. There isn't much news flow to digest, which could make for some listless trading. However, investors will have plenty of cues when earnings season unofficially begins as Alcoa (AA) reports its latest quarterly results after this session's close. Earnings results are expected to be downbeat across the board, so many investors focusing on guidance for signs of improving conditions.

06:22 am : S&P futures vs fair value: -12.90. Nasdaq futures vs fair value: -16.80.

06:22 am : Nikkei...8832.85...-25.10...-0.30%. Hang Seng...14928.97...-69.10...-0.50%.

06:22 am : FTSE...3947.56...-46.00...-1.20%. DAX...4308.35...-41.50...-1.00%.


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