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 Post subject: May 5th Tuesday 2009
PostPosted: Tue May 05, 2009 7:17 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=179

My Trading Performance: +20.75 Emini ES points

"The first and last trades exploited a commonly known concept about trading trends regardless how small or large the trends are...lower highs (downtrend) or higher lows (uptrend). This is one of the advantages with WRB Analysis and the Volatility Trading Report (VTR) is that they can identify lower highs or higher lows as they are occurring and not via hindsight analysis."

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

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

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

Stocks Wilt After The Surge
Wall Street retreats after the previous day's big runup. Bernanke's speech, profit reports and bank stress tests in focus.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: May 5, 2009: 5:43 PM ET

NEW YORK (CNNMoney.com) -- Stocks slumped Tuesday as investors retreated after pushing the major gauges to multi-month highs in the previous session.

After the close, Walt Disney (DIS, Fortune 500) reported weaker earnings that topped estimates on weaker revenue that missed estimates. Shares gained in extended-hours trading.

The Dow Jones industrial average (INDU) lost 16 points, or 0.2%. The S&P 500 (SPX) index lost 3 points, or 0.4%. The Nasdaq composite (COMP) fell 9 points, or 0.4%.

Stocks slumped as investors pulled back after a strong start to the week. On Monday, the Nasdaq ended at a six-month high and the Dow and S&P 500 ended at nearly 4-month highs.

Expectations that the worst is over for the economy have lifted stocks over the last two months, with the Nasdaq rising 8 straight weeks after falling to a 6-year low. The Dow and S&P 500 have risen for 7 of 8 weeks, after falling to more than 12-year lows.

The rally propelled the S&P 500 by 34% since March 9. After such a run, investors were a little uncertain of what to do next, said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

"The momentum is still to the upside, but we've had a very big move up and so people are hesitating a little," he said.

Wednesday brings the private sector employment report from payroll services firm ADP, a precursor to the government's non-farm payrolls report due Friday. Employers are expected to have cut 643,000 jobs from their payrolls after cutting 742,000 in the prior month.

Bernanke: The economy will bottom and start to rebound later this year, but the recovery process will be slow and choppy, Federal Reserve Chairman Ben Bernanke told the Joint Economic Committee. His comments essentially reiterated the statement from the last Fed policy meeting.

"The macroeconomic picture is still for recovery at the end of the year, something Bernanke talked about today," Rovelli said. "But if we don't see signs of that on the way in the economic news by the summer, you're going to see a big selloff."

Banks: At least 10 of the 19 big banks under review by the government may need to boost their capital, the Wall Street Journal reported. The government has been testing the banks' viability in case the economic slowdown accelerates in the coming months. The results of the "stress tests" are due late Thursday.

Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and Wells Fargo (WFC, Fortune 500) have all been mentioned over the last few days as companies that will potentially need to raise more capital.

AIG (AIG, Fortune 500) is expected to report a quarterly loss when it releases results late Thursday. However, the company is not expected to need more money from the U.S. government, Reuters reported. Shares rallied 14% Tuesday.

In other financial news, Swiss bank UBS (UBS) reported a steep quarterly loss and said it expects loan losses to keep climbing in the months ahead.

Bank shares slipped, sending the KBW Bank (BKX) sector index down by 1.6%.

Company news: Dow component Kraft Foods (KFT, Fortune 500) reported higher quarterly earnings that topped estimates. But revenue fell as the stronger dollar hurt sales overseas. Kraft shares rallied 4%.

A variety of influential technology shares slipped, dragging on the Nasdaq, including Intel (INTC, Fortune 500), Dell (DELL, Fortune 500), Microsoft (MSFT, Fortune 500) and Applied Materials (AMAT, Fortune 500).

Market breadth was negative. On the New York Stock Exchange, losers topped winners by eight to seven on volume of 1.53 billion shares. On the Nasdaq, decliners topped advancers five to four on volume of 2.57 billion shares.

Economy: The Institute for Supply Management's index on the services sector of the economy rose to 43.7 in April from 40.8 in March. Economists surveyed by Briefing.com thought it would rise to 42.2.

Any reading below 50 still indicates contraction, but the improvement suggests the pace of the slowdown is easing.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note up to 3.16% from 3.15% Monday. Treasury prices and yields move in opposite directions.

Borrowing costs improved. The 3-month Libor rate, a key bank lending rate, fell to 0.99% Tuesday, its lowest point on record. The overnight Libor rate held steady at 0.24%.

Other markets: In global trading, markets in Hong Kong and China ended higher, while markets in Japan, South Korea and Thailand were closed for national holidays. European markets ended mixed.

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

U.S. light crude oil for June delivery fell 63 cents to settle at $53.84 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery settled up $2.10 to $904.30 an ounce.

Image

Yahoo! Finance

4:30 pm : Despite optimistic comments from Fed Chairman Bernanke and another dose of better-than-expected economic data, participants opted to take profits rather than extend the prior session's rally.

Fed Chairman Bernanke stated in his testimony before the Joint Economic Committee that recent data suggest that the pace of contraction may be slowing, and that economic activity is expected to bottom out, then to turn up later this year.

Bernanke's premise seemed to be supported by the April ISM Service Index. Showing continued contraction, the Index came in at 43.7, but that was better than expected and up from the prior reading.

Stocks did see a brief flurry of buying as Bernanke's comments and the ISM data hit news wires, but enthusiasm faded and sellers reclaimed control over the session.

Sellers focused most of their efforts on financial stocks, which finished 1.2% lower. Still, that decline hardly offsets the 10% rally that financials had made in the prior session.

Energy stocks also fell out of favor as crude prices shed 1.2% to close at $53.80 per barrel. That weighed on oil exploration companies, which finished 3.8% lower and dragged the overall energy sector to a 1.3% loss.

Materials stocks lagged for much of the session, but pared losses into the close. The sector ended 0.6% lower. Steel stocks (-1.8%) weighed on the sector after AK Steel (AKS 14.39, -1.27) cut its outlook.

Health care stocks managed to hold up against sellers' efforts by closing 0.8% higher. Health care spent virtually the entire session in the green, thanks to leadership from managed health care (+4.8%) and pharmaceuticals (+1.1%).

Casinos and gaming stocks advanced 10.1% after Las Vegas Sands (LVS 11.34, +1.84) was upgraded by analysts at Bank of America's Merrill Lynch ahead of the company's earnings report (adj. $0.01 vs. expected $0.02 loss announced after close) and MGM Mirage (MGM 12.80, +3.36) posted better-than-expected earnings.

Kraft (KFT 25.22, +0.96) also reported a positive earnings surprise. That helped Kraft advance and provide support to the Dow.

Fellow food processor Archer Daniels Midland (ADM 23.84, -2.33) didn't fare as well, though. The company posted disappointing earnings for its fiscal third quarter.

Earnings remain in focus tomorrow morning, but most attention will be fixed on the ADP Employment report (8:15 AM ET), which will provide a glimpse into Friday's official jobs report.DJ30 -16.09 NASDAQ -9.44 NQ100 -0.3% R2K -0.8% SP400 -0.8% SP500 -3.44 NASDAQ Adv/Vol/Dec 1202/2.54 bln/1492 NYSE Adv/Vol/Dec 1354/1.53 bln/1672

3:35 pm : Energy commodities lagged the Commodity Index this session. The CRB Commodity Index is nearly unchanged, down just 0.2%.

Specifically, natural gas contracts sold off considerably at the open of the pit session. The June contracts hit session lows at $3.57 per contract and closed at $3.61 per contract, down 3.1%.

June crude oil contracts also closed the session lower at $53.80 per barrel, down 1.2%. The Department of Energy will release crude oil inventory data at 10:30 ET tomorrow morning.

On the other hand, July silver futures contracts were able to close 2.4% higher at $13.42 per ounce. The July contracts reached session highs early in the trade at $13.62 per ounce.

June gold futures contracts traded in positive territory for most of the session. After hitting session highs near the open at $916.70 per ounce, the contracts closed at $904.30 per ounce, up fractionally.DJ30 -14.18 NASDAQ -12.09 SP500 -3.30 NASDAQ Adv/Vol/Dec 1105/2.15 bln/1579 NYSE Adv/Vol/Dec 1305/1.16 bln/1711

3:00 pm : Stocks continue to trade in the red. This session's decline has taken the S&P 500 back to a year-to-date loss (-0.4%). However, the S&P 500 remains near the 900 level.

This session's selling effort has also taken the Small Cap Russell 2000 to a year-to-date loss. The Russell 2000 is down 1.6% this session, but now down 0.1% for the year.DJ30 -39.51 NASDAQ -23.22 SP500 -7.51 NASDAQ Adv/Vol/Dec 987/1.96 bln/1671 NYSE Adv/Vol/Dec 1153/1.04 bln/1854

2:30 pm : Stocks make a quick drop to session lows as Reuters reports that "financial professionals, academic experts and the U.S. broker-dealer watchdog agree the SEC should not reinstate its old uptick rule to regulate short selling but disagreed on what other measures would be effective." According to the report, the SEC is considering five proposals, including reinstating the uptick rule.

Meanwhile, Reuters also reports that the White House said it is likely that "several hundred thousand" jobs were lost in April. This should not come as a surprise given the level of new weekly jobless claims seen in April.DJ30 -58.94 NASDAQ -26.93 SP500 -9.45 NASDAQ Adv/Vol/Dec 975/1.77 bln/1675 NYSE Adv/Vol/Dec 1106/946 mln/1897

2:00 pm : Microsoft (MSFT 19.77, -0.42), Intel (INTC 16.07, -0.45), and Oracle (ORCL 18.79, -0.95) are weighing on the Nasdaq Composite, causing it to underperform the other headline indices. The general downturn among large-cap tech stocks has the Nasdaq 100 trading with a 0.9% loss.DJ30 -37.04 NASDAQ -20.25 SP500 -6.42 NASDAQ Adv/Vol/Dec 998/1.65 bln/1643 NYSE Adv/Vol/Dec 1150/879 mln/1845

1:30 pm : Trading has turned a bit choppy and losses persist. The Dow has actually retreated back to earlier lows.

Within the Dow, decliners outnumber advancing issues by nearly 2-to-1. There are also twice as many decliners as there are advancing issues in the S&P 500.DJ30 -48.19 NASDAQ -24.42 SP500 -8.02 NASDAQ Adv/Vol/Dec 953/1.54 bln/1680 NYSE Adv/Vol/Dec 1098/817 mln/1878

1:00 pm : Participants are taking profits in the wake of the prior session's robust run, keeping stocks in the red.

Losses are broad-based, but energy stocks are seeing the steepest losses this session. The sector is down 2.0%, hindered partly by a 1.2% decline in crude prices. Crude was last quoted at $53.80 per barrel.

Materials stocks are also contending with considerable selling pressure. After climbing nearly 17% during the 10 sessions leading up to today, materials stocks are down 1.4%.

Within the materials sector, steel stocks are down 3.2% following reduced guidance from AK Steel (AKS 14.00, -1.66).

Materials stocks had benefited in recent sessions from investors looking to play early cycle stocks.

Fed Chairman Bernanke fed hope that an economic turnaround may be in the back half of this year by indicating during his testimony before the Joint Economic Committee that recent data suggest that the pace of contraction may be slowing, and that economic activity is expected to bottom out, then to turn up later this year.

To that point, the April ISM Service Index showed continued contraction, but at a lesser rate by coming in at 43.7, which is up from the prior reading and better than expected.

Though the comments from Bernanke and the ISM data can be viewed with optimism, participants are shrugging off the news since it is generally already known.

There have been a few spots of relative strength this session. Health care is up 0.4% and is the only major sector in the green.

Casinos and gaming stocks are having a strong session after MGM Mirage (MGM 12.23, +2.79) posted better-than-expected earnings and Las Vegas Sands (LVS 11.30, +1.80) was upgraded.

Kraft (KFT 25.59, +1.33) is making gains and helping the Dow limit losses. The company reported a positive earnings surprise and reaffirmed its outlook for fiscal 2009.

Diversified banks are also extending the prior session's advance. The group is up 0.9%, while the rest of the financial sector is down 0.5%.DJ30 -28.91 NASDAQ -21.41 SP500 -6.19 NASDAQ Adv/Vol/Dec 981/1.44 bln/1626 NYSE Adv/Vol/Dec 1120/757 mln/1847

12:30 pm : The broader market's recent upturn has stalled and stocks are now trading sideways. However, financial stocks (+0.1%) have managed to climb into positive territory after being down more than 2% earlier in the session.

The renewed interest in financial stocks is focused on diversified financial services companies. The group is up 1.7%, building on its 12.6% gain in the prior session. Bank of America (BAC 11.02, +0.64) and Citigroup (C 3.38, +0.18) are standouts.DJ30 -21.27 NASDAQ -17.74 SP500 -4.68 NASDAQ Adv/Vol/Dec 987/1.32 bln/1598 NYSE Adv/Vol/Dec 1113/691 mln/1835

12:05 pm : Stocks are paring their losses. The Dow is coming within close range of the neutral line as it outperforms its counterparts.

Kraft (KFT 25.83, +1.57) continues to provide leadership to the Dow. The company posted this morning better-than-expected earnings results for its latest quarter.

Meanwhile, Exxon Mobil (XOM 67.50, -0.70) and Chevron (CVX 65.83, -0.85) are weighing on the Dow. The two are being hampered by lower oil prices; crude oil futures are currently down 1.2% to $53.80 per barrel.DJ30 -19.83 NASDAQ -19.71 SP500 -5.28 NASDAQ Adv/Vol/Dec 965/1.19 bln/1602 NYSE Adv/Vol/Dec 1080/624 mln/1842

11:30 am : Materials stocks are making a considerable pullback after registering strong gains in recent weeks. The sector is currently off by 1.7%, worse than the broader market.

Part of the downturn comes as participants move to take profits after watching the sector climb nearly 17% during the 10 sessions leading up to today.

Weakness in steel stocks is also undercutting the sector. Following a lowered outlook from AK Steel (AKS 14.06, -1.60), steel stocks are down 3.0%.DJ30 -24.05 NASDAQ -21.55 SP500 -6.47 NASDAQ Adv/Vol/Dec 904/1.03 bln/1632 NYSE Adv/Vol/Dec 965/546 mln/1933

11:00 am : Stocks have fallen to fresh session lows. Weakness is widespread.

Health care is the only major sector still in the green. It's sporting an enviable gain of 0.3%. Big pharma stocks are currently helping drive the sector's advance amid news that Eli Lilly (LLY 34.36, +0.55) and Alkermes (ALKS 9.07, +1.22) have together announced a new drug application. DJ30 -40.94 NASDAQ -25.02 SP500 -8.41 NASDAQ Adv/Vol/Dec 829/876 mln/1671 NYSE Adv/Vol/Dec 878/569 mln/1997

10:30 am : Gold prices are extending the prior session's rally by advancing 1.0% this session. Gold is now trading hands at $911.00 per ounce.

Silver is also garnering interest. It is currently up 2.6% to $13.46 per ounce.

The rise in precious metals prices is helping shares of Yamana Gold (AUY 8.56, +0.10) and Newmont Mining (NEM 41.14, +0.19) outperform the broader market.

Energy stocks are under considerable pressure, though. The sector is down 1.7% and leading losses amid lower energy prices. Crude futures contracts currently price oil at $54.00 per barrel, down 0.8%. Natural gas is off by 2.4% to $3.64 per contract.

The balance between declines in energy prices and advances in precious metals prices has the CRB Commodity Index trading flat.DJ30 -18.64 NASDAQ -17.48 SP500 -4.46 NASDAQ Adv/Vol/Dec 959/638 mln/1455 NYSE Adv/Vol/Dec 1059/357 mln/1758

10:00 am : Just hitting news wires, the April ISM Service Index registered a reading of 43.7, which indicates activity is still contracting although at a lesser rate -- the prior reading came in at 40.8. Nonetheless, April's reading was better than the consensus forecast, which called for a reading of 42.2.

According to prepared remarks for his Joint Economic Committee testimony, Fed Chairman Bernanke stated that the U.S. economy is moving to resume growth later this year, according to Dow Jones. However, Bernanke also stated that further sizable job losses are likely, according to Reuters.

Stocks made a quick upward turn as participants received the news, but the momentum behind the move has faded a bit.DJ30 -7.41 NASDAQ -13.79 SP500 -2.16 NASDAQ Adv/Vol/Dec 968/373 mln/1326 NYSE Adv/Vol/Dec 1003/237 mln/1687

09:45 am : Stocks started the session with modest losses, but are now trading in mixed fashion. Blue chips like Kraft (KFT 25.83, +1.57) have helped the Dow make its way into positive ground, but weakness in large-cap tech is weighing on the Nasdaq.

Fed Chairman Bernanke is scheduled to begin his testimony before the Joint Economic Committee at the top of the hour. The ISM Service Index for April is also due at that time.

Though Bernanke's speech is expected to remain in-line with the Fed's latest policy statement, which would suggest that Bernanke's assessment and outlook for the economy is already known, participants could show a knee-jerk reaction to the comments.

Any meaningful surprises in the ISM Index could also cause a swing in action.DJ30 +2.95 NASDAQ -6.68 SP500 -1.93 NASDAQ Adv/Vol/Dec 949/216 mln/1224 NYSE Adv/Vol/Dec 1111/147 mln/1508

09:15 am : S&P futures vs fair value: -4.70. Nasdaq futures vs fair value: -6.20. According to stock futures, the major indices look as if they will start the session modestly lower. The lower start doesn't necessarily suggest a negative bias, but it does indicate participants are in need of a breather after pushing stocks markedly higher in the prior session, which placed the S&P 500 back above 900 for the first time since January. That feat was largely made possible by support from foreign markets and better-than-expected data, and was underscored by healthy trading volume. However, short-covering likely compounded the move and the volume. This session's action will presumably be guided by more economic data as the ISM Service Index for April is due later this morning (10:00 AM ET) and Fed Chairman Bernanke's testimony before the Joint Economic Committee (10:00 AM ET). As usual, though, the market's reaction to the events will be the best tell of tone.

09:00 am : S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -8.00. After climbing 2.8% in the prior session, Germany's DAX is currently down 0.5%. France's CAC is currently down 0.2% after logging a 2.5% gain Monday. Siemens (SI) is a primary laggard in Germany, while GDF Suez and France Telecom are weighing on the CAC. However, Societe Generale and BNP Paribas are helping to limit losses in the CAC. Meanwhile, Britain's FTSE has reopened after a holiday on Monday, and is making up for the gains it missed. The FTSE is currently up 2.4% amid strong buying in bank shares and financial services stocks. In Asia, the MSCI Asia-Pacific Index advanced 0.7%, while Hong Kong's Hang Seng moved 0.3% ahead. Chinese banks acted as a drag on the Hang Seng. However, oil specialist CNOOC (CEO) climbed following a rise in crude oil prices. Mainland China's Shanghai Composite closed 0.3% higher. Japan's Nikkei remains closed, but will reopen May 7.

08:30 am : S&P futures vs fair value: -6.20. Nasdaq futures vs fair value: -8.80. Shares of electric utilities are trading in mixed fashion in premarket action. Duke Energy (DUK) posted first quarter earnings of $0.28 per share, which is short of the $0.32 per share that was widely expected. Sempra Energy (SE) reported adjusted earnings of $0.33 per share for the first quarter, matching analysts' expectations. Constellation Energy (CEG) topped earnings expectations by bringing in an adjusted $0.74 per share. Progress Energy (PGN) also topped earnings estimates by bringing in an adjusted $0.64 per share. Meanwhile, broader market stock futures continue to point to a moderately lower start for the major indices.

08:05 am : S&P futures vs fair value: -5.30. Nasdaq futures vs fair value: -7.50. Stock futures point to a modestly lower start following the latest dose of earnings. This morning, Teva Pharmaceuticals (TEVA) posted first quarter adjusted earnings of $0.71 per share, which is better than the consensus estimate of $0.68 per share. Shares of TEVA are up roughly 0.9% to $44.50 per share in premarket trading. CVS Caremark (CVS) reported first quarter earnings of $0.55 per share, which topped the consensus estimate of $0.54 per share by one penny. CVS reported that retail same-store sales increased 3.3% during the quarter. CVS is down fractionally ahead of the opening bell. Dow component Kraft (KFT) reported earnings of $0.45 per share for its first quarter. The consensus called for $0.40 per share. Kraft also reaffirmed its outlook for fiscal 2009; the company expects earnings to come in at $1.88 per share, which is on par with Wall Street's current forecast. Shares of KFT are up 3.9% to $25.20 per share ahead of the opening bell. Last evening, MGM Mirage (MGM) posted a first quarter loss of $0.06 per share, excluding certain gains. The consensus called for a loss of $0.07 per share. MGM is up 8.4% to $10.23 per share. Peer Las Vegas Sands (LVS) is also garnering support after being upgraded by analysts at Bank of America's Merrill Lynch. LVS is up 7.9% to $10.23 per share in premarket trading. Foreign markets are trading in mixed fashion, which is providing little support to the morning's overall bias. However, Britain's FTSE has raced ahead by 2.8% as it attempts to make up the gains registered by other major bourses in the prior session; the FTSE was closed Monday for holiday observance.

06:22 am : S&P futures vs fair value: -2.00. Nasdaq futures vs fair value: -4.00.

06:22 am : Nikkei...Holiday......... Hang Seng...16430.08...+49.00...+0.30%.

06:22 am : FTSE...4367.90...+124.70...+2.90%. DAX...4921.46...+19.00...+0.40%.

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