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 Post subject: May 4th Monday 2009
PostPosted: Mon May 04, 2009 5:48 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=178

My Trading Performance: +13.25 Emini ES points

"Same as usual...one good trade, a few trade errors in a difficult price action after the initial run-up to the upside. However, trading is a little easier in comparison to the early part of the 1st quarter of the year."

http://www.thestrategylab.com/WRBAnalysisTutorials.htm

http://www.thestrategylab.com/TradingReports.htm

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

Stocks Surge On Recovery Hopes
Better-than-expected pending home sales report sends Nasdaq to a 6-month high, Dow and S&P 500 to almost 4-month highs.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: May 4, 2009: 5:36 PM ET

NEW YORK (CNNMoney.com) -- Wall Street rose Monday, pushing the major gauges to multi-month highs, as a better-than-expected housing market report intensified hopes that the economy is closer to stabilizing.

The Dow Jones industrial average (INDU) gained 214 points, or 2.6%, ending at the highest point since Jan. 13. The S&P 500 (SPX) index added nearly 30 points or 3.4%, ending above 900 for the first time since Jan. 8 and turning higher for the year.

The Nasdaq composite (COMP) rose 44 points, or 2.6% and ended at the highest point since Nov. 4.

Stocks have been surging -- since bottoming on March 9 -- on bets that the worst for the economy is over. Those bets were furthered Monday by the day's economic news.

The March pending home sales index from the National Association of Realtors jumped 3.2% from February, surprising economists who were looking for the index to hold steady.

"If you subscribe to the theory that the global economic crisis started with the U.S. housing market and will end there, you're going to be encouraged by reports like this that suggest housing is bottoming," said Kevin D. Mahn, managing director at Hennion & Walsh.

Another report, from the government, showed construction spending rose 0.3% versus forecasts for a decline of 1.6%. Spending fell 1% in February.

Mahn said investors were also responding well to weekend comments from Berkshire Hathaway (BRK.A)'s Warren Buffett, who said he sees the recession ending soon and predicts that no big bank will fail. He also talked up Wells Fargo (WFC, Fortune 500), one of Berkshire's largest holdings.

Speaking at the company's annual meeting, Buffett also said Berkshire will post a first-quarter operating profit.

Stocks are coming off a strong April, in which the S&P 500 spiked 9.4%, the Dow gained 7.3% and the Nasdaq jumped 12.3%. The S&P 500 and Dow have gained for seven of the past eight weeks; the Nasdaq has jumped eight weeks in a row.

While the move has been positive and has coincided with some improved results, there are still enough roadblocks for the market that analysts are wary to say the bear market is over.

"The rally has been encouraging and we certainly have a lot of the ingredients for a bull market, but we need another big push for that to happen," said Jack Ablin, chief investment officer at Harris Private Bank.

Tuesday brings readings on the services sector of the economy and a profit report from Walt Disney. Also Tuesday: Federal Reserve Chairman Ben Bernanke gives his economic outlook before the Joint Economic Committee.

Banks: Financial shares are likely to be choppy ahead of the release of the government's "stress tests" on Thursday. The government will release details on the 19 individual companies tested as well as the broad group of corporations.

The results are expected to include estimated loan losses in the event that the economy deteriorates further, along with an estimate of how much more capital banks would need to raise in such an environment.

Citigroup (C, Fortune 500) is reportedly among the banks that will need to generate more money to stay afloat. The bank may have to raise another $10 billion, according to the Wall Street Journal.

Bank of America (BAC, Fortune 500) shot down reports in the Financial Times that it has been told by the government that it needs to raise $10 billion in fresh capital.

Wells Fargo has reportedly been asked to raise additional money as the result of preliminary stress tests.

However, shares of the three companies rallied, along with the rest of the bank sector, as investors took the news in stride. The KBW Bank (BKX) sector index gained 14.7%.

Corporate news: Sprint Nextel (S, Fortune 500) reported a quarterly profit, excluding items, surprising analysts who were looking for a quarterly loss. Shares gained 8%.

Gains were broad based with 27 of 30 Dow stocks rising, led by IBM (IBM, Fortune 500), Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500) and Johnson & Johnson (JNJ, Fortune 500).

Market breadth was positive. On the New York Stock Exchange, winners topped losers four to one on volume of 1.10 billion shares. On the Nasdaq, advancers topped decliners three to one on volume of 2.07 billion shares.

Bonds: Treasury prices were little changed, with the yield on the benchmark 10-year note at 3.15%, little changed from Friday. Treasury prices and yields move in opposite directions.

Other markets: In global trading, Asian markets ended higher and European markets mostly ended higher.

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

U.S. light crude oil for June delivery rose $1.27 to settle at $54.77 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $14 to settle at $902.20 an ounce.

Image

Yahoo! Finance

4:35 pm : Stocks are now sporting a modest year-to-date gain after a strong session in which strength in foreign markets, better-than-expected economic data, and leadership from bank shares helped the S&P 500 ascend to its best level since January.

Monday's gains were broad-based amid relatively high trading volume, which had showed signs of tapering off late last week. More than 1.7 billion shares traded hands on the NYSE this session.

Buyers took early cues from overseas markets, where Asian stocks marched higher following word that several Asian finance ministers ordered an emergency liquidity fund of $120 billion to be pooled. News that China's second quarter GDP is expected to outpace that of the first quarter, and a better-than-expected April PMI report, provided additional support.

European bourses fed off the good news, shrugging off news that the European Commission expects the European Union economy to shrink 4% this year, which is down from the 1.8% contraction that it had previously forecast, according to The Wall Street Journal. Germany's DAX gained 2.8% and France's CAC advanced 2.5%. Britain's FTSE was closed for holiday observance.

The upbeat tone abroad helped support a positive sentiment heading into the U.S. open. Optimism was further bolstered by news that pending home sales for March advanced by a better-than-expected 3.2% month-over-month. Though the news feeds into the housing recovery argument, it threatens to stall a housing recovery since interest rates could respond by moving higher.

Construction spending in March increased 0.3% month-over-month, exceeding the 1.6% decrease that was expected. In turn, the March report will likely be an incremental positive when contemplating first quarter GDP revisions.

The better-than-expected data helped propel the major indices markedly higher in a broad-based advance, but financials garnered the most interest. Led by diversified bank stocks (+20.5%), the financial sector gained 10.1%.

Despite what seemed to be a vote of confidence in banks, participants expect that several banks may need additional capital to satisfy the government's bank stress tests, which are scheduled to be released on May 7. In fact, an AP report said that regulators told Wells Fargo (WFC 24.25, +4.64) to shore up its balance sheet since the bank would have trouble surviving a deeper recession. Earlier in the morning, billionaire investor Warren Buffett indicated in a CNBC interview that Wells Fargo and US Bancorp (USB 20.34, +2.38) would be fine if macro conditions deteriorated further. US Bancorp was actually put on watch negative by Standard & Poor's, according to Dow Jones.

Participants' determination to bid financial stocks higher supported buying in the broader market. All 10 major sectors in the S&P 500 finished with gains of at least 1.5%, helping the S&P 500 cross the 900 level for the first time in months.

The positive tone in equity markets lent itself to the commodities trade, helping the CRB Commodity Index climb 1.5%. June crude oil contracts closed at $54.43 per barrel, up 2.3%. Gold futures shot above $900 per ounce to close 1.6% higher at $902.00 per ounce.

Meanwhile, the U.S. dollar slid 0.7% against a basket of major foreign currencies.DJ30 +214.33 NASDAQ +44.36 NQ100 +2.2% R2K +4.1% SP400 +4.2% SP500 +29.72 NASDAQ Adv/Vol/Dec 2108/2.54 bln/630 NYSE Adv/Vol/Dec 2618/1.71 bln/455

3:30 pm : The buying in the equity markets this session has been paired with interest in commodities as well. The CRB Commodity Index is currently up 1.5%.

June crude oil contracts traded at session highs within $0.11 of their 2009 March 26th high to close at $54.43 per barrel, up 2.3%.

June natural gas also followed the trend this session. The contracts closed an impressive 6.8% higher at $3.72 per contract.

June gold futures contracts shot threw the $900 level this session. The contracts were able to close 1.6% higher at $902.00 per ounce, off its session highs of $908.30 per ounce.

July silver saw similar moves to gold contracts in its trade. The contracts were able to spike significantly higher this session and closed 4.9% higher at $13.11 per ounce.DJ30 +172.43 NASDAQ +31.69 SP500 +23.21 NASDAQ Adv/Vol/Dec 7985/2.07 bln/723 NYSE Adv/Vol/Dec 2469/1.11 bln/559

2:55 pm : The S&P 500 is stuck near the 900 level.

Market breadth is positive, with advancers outpacing decliners by roughly 5-to-1 on the NYSE and by 3-to-1 on the Nasdaq. Volume is about average.DJ30 +174.35 NASDAQ +29.90 SP500 +22.06 NASDAQ Adv/Vol/Dec 1977/1.85 bln/720 NYSE Adv/Vol/Dec 2489/970 mln/555

2:35 pm : The S&P 500 continues to rally, breaking the 900 level. The financial sector is leading the way, now up 6.3%.

The S&P 500 is down just 0.3% year-to-date.DJ30 +193.51 NASDAQ +32.51 SP500 +23.10 NASDAQ Adv/Vol/Dec 1991/1.74 bln/686 NYSE Adv/Vol/Dec 2476/898 mln/561

2:00 pm : Gains remain broad-based as buyers continue to hold control over the action.

Buyers have also been bidding commodities higher. The CRB Commodity Index is currently up 0.7%.

Treasuries are out of favor, though. The 10-year Note is currently down 4 ticks. Its weakness in recent sessions has lifted its yield up to nearly 3.2%.DJ30 +180.56 NASDAQ +30.22 SP500 +20.94 NASDAQ Adv/Vol/Dec 1972/1.57 bln/706 NYSE Adv/Vol/Dec 2431/805 mln/592

1:30 pm : The financial sector is pushing to fresh session highs; it is now up 4.2%.

Energy stocks are also at fresh session highs; the sector is up 2.9%. Energy's ascent is being helped along by a sense of optimism in the broader market, along with a 1.0% rise in crude oil prices. Crude was recently quoted at $53.75 per barrel.DJ30 +172.12 NASDAQ +29.60 SP500 +19.85 NASDAQ Adv/Vol/Dec 1949/1.41 bln/712 NYSE Adv/Vol/Dec 2413/731 mln/596

1:05 pm : Stocks started the session on solid footing with help from strength in foreign markets, then a batch of better-than-expected economic data helped stocks move even higher.

While gains are broad-based, banks are providing some of the most support, despite uncertainty regarding their capital bases.

Several Asian markets zoomed higher after investors received word that Asian finance ministers ordered $120 billion to be put into an emergency liquidity pool, and that China's second quarter GDP is expected to outpace that of the first quarter. A better-than-expected April PMI provided additional support.

European bourses fed off the good news as Germany's DAX gained 2.8% and France's CAC advanced 2.5%. Britain's FTSE was closed for holiday observance. The gains came in the face of dour economic prospects. The European Commission expects the European Union economy to shrink 4% this year, which is down from the 1.8% contraction it had previously forecast, according to The Wall Street Journal.

According to the latest batch of U.S. economic data, pending home sales for March advanced a better-than-expected 3.2% month-over-month. While the news feeds into the housing recovery argument, it helps force rates higher, which lowers affordability and threatens to retard the recovery process.

As for construction spending in March, it increased 0.3% month-over-month, exceeding the 1.6% decrease that was expected. In turn, the March report will likely make an incrementally positive contribution to first quarter GDP revisions.

Financial stocks are up 3.6% amid strength in bank stocks. The buying comes ahead of the government's bank stress test results, which are scheduled for May 7.

Results of the tests are still highly uncertain. In turn, reports have claimed that some banks may be in need of much more capital. According to Reuters, Bank of America (BAC 9.17, +0.47) is not planning to raise any equity at this time, despite the fact that early reports suggested so. However, that could change once bank regulators make their findings public. Meanwhile, an AP report said that regulators have told Wells Fargo (WFC 21.69, +2.08) to shore up its balance sheet since the bank would have trouble surviving a deeper recession. That assessment seemed to contrast the opinion of Warren Buffett, who indicated in a CNBC interview that Wells Fargo would be fine if macro conditions deteriorated further.

With the help of banks and the broader financial sector (+3.8%), all 10 major sectors are sporting healthy gains.DJ30 +160.97 NASDAQ +25.40 SP500 +17.89 NASDAQ Adv/Vol/Dec 1933/1.31 bln/708 NYSE Adv/Vol/Dec 2383/680 mln/623

12:30 pm : Financial stocks (+3.0%) pulled back a bit following AP report that said regulators have told Wells Fargo (WFC 21.21, +1.60) to shore up its balance sheet. According to the report, regulators believe the bank would have trouble surviving a deeper recession, even though this morning Warren Buffett indicated in a CNBC interview that Wells Fargo would be fine if macro conditions deteriorated further.

In a speech about the financial crisis, Kansas City Fed President Hoenig stated that despite signs of improvement, markets remain under stress and the economic outlook is uncertain, according to Reuters. Hoenig also stated that it will be some time before markets can be functional without government aid, according to Dow Jones.DJ30 +141.45 NASDAQ +24.53 SP500 +16.41 NASDAQ Adv/Vol/Dec 1898/1.19 bln/715 NYSE Adv/Vol/Dec 2345/622 mln/652

12:00 pm : Stocks continue to trade with broad-based gains; nearly 85% of the companies listed in the S&P 500 are in the green, while all 30 Dow components are moving higher. On the NYSE big board, advancing issues outnumber decliners by more than 4-to-1.DJ30 +165.66 NASDAQ +26.31 SP500 +17.75 NASDAQ Adv/Vol/Dec 1930/1.04 bln/662 NYSE Adv/Vol/Dec 2407/548 mln/569

11:30 am : Bank stocks are helping propel the financial sector higher. Shares of diversified banks are up 8.2% and regional bank stocks are up 5.4%, helping drive the KBW Banking Index to a 5.6% gain. Meanwhile, the broader financial sector is up 3.6%.

Given the financial sector's 1.7% slide last Friday, financials are up 1.8% for the month of May. The sector logged a 30.4% gain for April.DJ30 +184.80 NASDAQ +29.30 SP500 +19.72 NASDAQ Adv/Vol/Dec 1968/911 mln/599 NYSE Adv/Vol/Dec 2430/484 mln/510

11:00 am : Stocks continue sporting impressive gains as the S&P 500 and the Dow trade more than 2% higher near their session highs. The Nasdaq has pulled back a bit to trail its counterparts, but it is still holding on to a solid advance.

Participants are still showing some of the strongest interest in materials stocks. The sector is currently up 4.1%, building on last week's 2.7% advance, which outpaced the broader market's weekly advance of 1.3%.

Investor interest in materials stocks remains rooted in the notion that the sector will be the first among those to recover when economic conditions revive. DJ30 +169.41 NASDAQ +26.76 SP500 +17.81 NASDAQ Adv/Vol/Dec 1941/733 mln/570 NYSE Adv/Vol/Dec 2401/394 mln/518

10:30 am : Gold prices are reversing last week's slide by bounding to a 1.8% gain, which puts gold prices back above the $900 per ounce mark. Gold was last quoted at $904.00 per ounce, its best level in one week.

Silver prices are also seeing solid support. Silver was recently quoted at $12.96 per ounce, up 3.6%.

In energy trading, oil futures contracts are pricing crude oil 1.1% higher at $53.80 per barrel. Natural gas futures is being priced at $3.59 per contract, up 1.3%.

The upturn in commodities prices comes amid a downturn in the U.S. dollar. The greenback is off by 0.4% against a basket of major foreign currencies.DJ30 +171.16 NASDAQ +32.15 SP500 +19.05 NASDAQ Adv/Vol/Dec 1945/555 mln/488 NYSE Adv/Vol/Dec 2413/311 mln/454

10:00 am : Stocks have spiked to build on their initial gains. The upward push has been driven by a batch of better-than-expected data from the housing sector.

Pending home sales for March advanced 3.2% month-over-month, which is a better than what was expected. The consensus called for pending sales to be unchanged month-over-month, following a downwardly revised 2.0% monthly increase for February. February's increase followed a sharp 7.7% drop in January.

Meanwhile, construction spending for March increased 0.3% month-over-month, which is better than the 1.6% decrease that was expected. Construction spending fell 1.0% in February; that was revised modestly lower from the 0.9% decrease that was initially reported.

DJ30 +142.57 NASDAQ +20.56 SP500 +15.12 NASDAQ Adv/Vol/Dec 1783/330 mln/541 NYSE Adv/Vol/Dec 2299/202 mln/464

09:45 am : Stocks have started the session with solid gains. All 10 major sectors in the S&P 500 are in the green.

Materials stocks are showing the best gains by advancing 2.9%. Financial stocks are close behind with a 2.4% gain.

Utilities are advancing the least. Nonetheless, the sector is up 0.2% as Entergy (ETR 69.39, +2.48) and Public Services Enterprise Group (PEG 31.60, +0.45) show leadership. This morning, Entergy actually announced quarterly earnings results that fell short of analysts' consensus estimate, but PSEG bested analysts' earnings expectations. Both companies issued in-line forecasts, though.DJ30 +87.05 NASDAQ +18.40 SP500 +10.53 NASDAQ Adv/Vol/Dec 1700/204 mln/520 NYSE Adv/Vol/Dec 2144/134 bln/549

09:15 am : S&P futures vs fair value: +5.60. Nasdaq futures vs fair value: +12.00. Broader-market stock futures point to a slightly higher start for the week's first trading session, despite a lack of major news items or trading catalysts to stimulate buying. However, supportive comments about Wells Fargo (WFC) and US Bancorp from Warren Buffett have helped garner support for financials in premarket action. Still, the vote of confidence hasn't completely reassured participants that the results of the government's bank stress tests will be decidedly positive. According to Reuters, Bank of America (BAC) is not planning to raise any equity since it doesn't yet know how much it will be required to raise by the government. However, according to The Wall Street Journal, Citigroup (C) may need up to $10 billion. As for economic data, March pending home sales data and March construction spending data are due at 10:00 AM ET. Today's economic speakers include Kansas City Fed President Hoenig (12:30 PM ET) and Richmond Fed President Lacker (2:00 PM ET).

09:00 am : S&P futures vs fair value: +5.50. Nasdaq futures vs fair value: +12.00. Shares of bank stocks are garnering support in premarket trading. In particular, Wells Fargo (WFC) and US Bancorp (USB) are up 3.7% and 3.8%, respectively. Their upward move follows comments from billionaire investment guru Warren Buffet during a CNBC interview indicating that the two banks would come through any further macro deterioration just fine. Just announced, a Bank of America spokesman stated that Bank of America (BAC) is not working on plans to raise $10 billion in common equity since the Fed has not given the bank a final figure required to satisfy the government's bank stress test, according to Reuters. Shares of BAC are up 2.3% in premarket action.

08:35 am : S&P futures vs fair value: +3.50. Nasdaq futures vs fair value: +8.80. While Britain's FTSE is closed for holiday observance, Germany's DAX and France's CAC are open and trading with respective gains of 1.5% and 1.1%. Germany's gains are being led by strength engineering giant Siemens (SI) and financial services company Allianz (AZ). Deutsche Telekom is trading as a primary laggard, however. In France, BNP Paribas is showing strength, as are shares of metal and mining giant ArcelorMittal (MT) and energy giant Total (TOT). However, Sanofi-Aventis (SNY) is weighing on the CAC. Gains in the broader market come after reports indicate that the European Union's economy has entered its worst recession in decades. As such, the European Commission is slashing its economic forecasts and raising its outlook for unemployment, according to The Wall Street Journal. The commission now expects the economies of the 27-state EU and the group of 16 countries that share the euro to shrink 4% this year. In January, it had predicted a 1.8% contraction in the EU and a 1.9% fall in the euro zone, according to the article. In Asia, Hong Kong's Hang Seng spiked 5.5% amid news that several Asian finance ministers have ordered that $120 billion be pooled in order to establish an emergency liquidity fund. News that China's April PMI was a better-than-expected 53.5 also helped. China Mobile was a primary leader on the Hang Seng; HSBC (HBC) and China Construction Bank also provided support.

08:00 am : S&P futures vs fair value: +5.80. Nasdaq futures vs fair value: +13.00. Stock futures are up a bit in the absence of any market-moving earnings announcements. However, according to reports, Bank of America (BAC) is planning to raise $10 billion in capital, while The Wall Street Journal reports that Citigroup (C) may need to raise as much as $10 billion in capital. The news stories follow word from last week that indicated the two companies may need to raise billions of dollars in order to satisfy the government's bank stress tests. The results of those stress tests are expected to be released May 7. Shares of BAC and C are trading in mixed fashion during premarket action. Pending home sales data for March is due at 10:00 AM ET, along with March construction spending data. The announcements should provide a dose of leading and lagging data, respectively, for the housing sector. Even later, Kansas City Fed President Hoenig is speaking about the financial crisis at 12:30 PM ET, and Richmond Fed President Lacker speaks about the economic outlook at 2:00 PM ET. In overseas action, France's CAC and Germany's DAX are trading with solid gains; Britain's FTSE is closed for holiday observance. In Asia, Japan's Nikkei is also closed for holiday observance, but Hong Kong's Hang Seng spiked 5.5% following news from The Wall Street Journal that Asian governments have pooled $120 billion for an emergency liquidity fund.

06:19 am : S&P futures vs fair value: +6.60. Nasdaq futures vs fair value: +12.50.

06:19 am : Nikkei...Holiday......... Hang Seng...16381.05...+860.10...+5.50%.

06:19 am : FTSE...Holiday......... DAX...4850.57...+81.00...+1.70%.

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