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 Post subject: May 8th Friday 2009
PostPosted: Sat May 09, 2009 4:34 am 
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Joined: Sat Jan 10, 2009 1:06 pm
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Location: Canada
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=184

My Trading Performance: +10.75 Emini ES points

"I reached my profit goal for the day and then just took it easy for the remainder of the trading day due to exhaustion after only getting a few hours of sleep.

With that said, I spent most of the trading day monitoring and learning new trading instruments (FAZ and FAS) after finding out several of my clients have been applying profitably WRB Analysis, APAOR and VTR strategies to those trading instruments that are bear market and bull market exchange traded funds (ETF).

http://www.direxionshares.com/etfs

Those particular trading instruments are part of the Direxionshares family ETFs"


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

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

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

Wall Street Extends The Rally
Stocks advance on the day and week after April's job losses are not as bad as expected and stress test results are finally released.
By Alexandra Twin, CNNMoney.com senior writer
Last Updated: May 8, 2009: 5:40 PM ET

NEW YORK (CNNMoney.com) -- Stocks surged Friday, extending the two-month rally, after a government report showed employers cut fewer jobs than expected last month. The release of the long-awaited bank stress test results also gave the market a boost.

The Dow Jones industrial average (INDU) gained 165 points, or 2%, ending at the highest point since Jan. 9th. The S&P 500 (SPX) index rose 22 points or 2.4%, ending at the highest point since Jan. 6. The Nasdaq composite (COMP) added 23 points, or 1.3%.

The major gauges ended higher for the week as well. The Nasdaq has now ended higher for 9 weeks straight. The Dow and S&P 500 have now ended higher for 8 of the last 9 weeks.

Stocks have been rallying since early March, as investors have bet that the worst for the economy and financial sector has already happened. The S&P has jumped 36% since hitting a more than 12-year low on March 9th.

Although the jobs report was not positive, it could have been worse, said Jim Dunigan, chief investment officer at PNC Wealth Management. That appeared to be sufficient reason to get investors back into the market.

"We seem to be turning a corner here with the pace of the contraction in both employment and the overall economy," he said.

After the close, Warren Buffett's Berkshire Hathaway (BRK.B) reported a steep drop in first-quarter profit that beat forecasts on a per-share basis.

Employment report: Employers cut 539,000 jobs from their payrolls in April, the Labor Department reported Friday morning, surprising economists who were looking for job cuts of around 600,000. Employers cut a revised 699,000 jobs from their payrolls in March.

It was the smallest number of job cuts since last October, when the economy lost 380,000 jobs. However, it brings the total numbers of jobs lost to 5.7 million since January 2008. The recession is considered to have started the month before that, in December 2007.

The unemployment rate, generated by a separate survey, rose to 8.9%, as expected, from 8.5% in March, the worst reading since September 1983.

"In absolute terms it was a pretty poor report," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc.

He said it wasn't as bad as the ones that preceded it, but that it was helped partly by short-term factors such as a big increase in government jobs added to conduct the 2010 census.

"The overall employment picture is still bad, but I think people are looking at leading indicators such as weekly jobless claims, which have been declining," he said. "That could mean a better payrolls report in May."

In other economic news, wholesale inventories shrank for the seventh consecutive month in March, falling to $411.7 billion, the lowest level in 16 months.

Financials: The government released the results of the stress tests late Thursday, saying that 10 of the 19 banks tested will need to raise almost $75 billion in anticipation of a deeper recession.

Leading the list was Dow component Bank of America (BAC, Fortune 500), which needs to raise nearly $34 billion. Wells Fargo (WFC, Fortune 500) needs $13.7 billion and Citigroup (C, Fortune 500) needs $5 billion.

JPMorgan Chase (JPM, Fortune 500), American Express (AXP, Fortune 500) and Goldman Sachs (GS, Fortune 500) were among the banks that won't need to raise any additional money.

The stocks rallied as investors breathed a sigh of relief that the results weren't worse.

The KBW Bank (BKX) sector index added 12.1%.

"The dollar amounts are in ranges that had either been leaked or suspected and there seems to be a pretty orderly resolution to the outcome," Dunigan said. "The other part is that investors are just happy to have it behind them."

Company news: Fannie Mae (FNM, Fortune 500) reported a loss of $23.2 billion in the first quarter, or $4.09 per share, worse than a year ago. The mortgage finance company also said it needs an additional $19 billion from the government.

After the close Thursday, AIG (AIG, Fortune 500) reported a quarterly loss of 97 cents per share versus a loss of $1.41 a year ago. Analysts thought AIG would report a loss of 6 cents per share. The stock inched higher Friday.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than five to one on volume of 1.9 billion shares. On the Nasdaq, advancers topped decliners three to one on volume of 3.08 billion shares.

Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.28% from 3.32% Thursday. Treasury prices and yields move in opposite directions.

Lending rates continued to fall. The three-month Libor rate fell to an all-time low of 0.94% from 0.96% Thursday, according to Bloomberg.com. The overnight Libor rate fell to 0.23% from 0.24%. Libor is a bank lending rate.

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

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

U.S. light crude oil for June delivery rose $1.92 to settle at $58.63 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell 60 cents to settle at $914.90 an ounce.

Image

Yahoo! Finance

4:35 pm : The major indices settled with solid gains on Friday, as financial institutions rallied after the government released the results of its stress test. Meanwhile, the number of job losses in April slowed, another indication that the pace of economic contraction is decelerating.

Eight of the ten economic sectors posted a gain. Financials led the way, surging 8.3%. The energy sector also had a strong showing, climbing 4.2%, after crude prices rose 3.1% to $58.47. Defensive sectors underperformed, with telecom (-0.4%) falling into the red after shares of AT&T (T 25.25, -0.20) slid on reports that the company is near a deal to buy $2.5 billion in Alltel assets from Verizon (VZ 29.85, -0.01).

The strength in financials came after the close Thursday when the government announced the findings of its much anticipated stress test on 19 major financial institutions. The government has instructed 10 financial institutions to raise more capital by June 8. The $75 billion in new capital requirements includes: Bank of America (BAC 14.17, +0.66), $33.9 billion; Wells Fargo (WFC 28.18, +3.42), $13.7 billion; GMAC, $11.5 billion; Citigroup (C 4.02, +0.21), $5.5 billion and Morgan Stanley (MS 28.20, +1.06), $1.8 billion.

The remaining five banks that need more capital are regional banks: Regions Financial (RF 6.53, +1.30), $2.5 billion; SunTrust Banks (STI 20.77, +2.25), $2.2 billion; KeyCorp (KEY 6.97, +0.19), $1.8 billion, Fifth Third Bancorp (FITB 8.49, +3.14), $1.1 billion; PNC Financial Services (PNC 53.08, +8.61), $600 million.

The companies are utilizing several ways to increase their common equity ratios, including common stock offerings, converting preferred shares and selling assets.

BofA plans to raise $17 billion in a common stock issue, with the remaining coming from preferred stock to equity conversion and asset sales. Wells Fargo is issuing common stock (~$7.5 bln announced this morning), retaining earnings and utilizing other internally generated sources. Citigroup will expand its previously announced conversion of preferred to common. GMAC said it may issue new common equity, issue mandatory convertible preferred shares or convert existing equity into a form of Tier 1 common equity. In addition, Morgan Stanley, which was directed to raise $1.8 billion by the government, priced 146 million shares of its stock, and a 21.9 million over-allotment, at $24 per share.

In other notable corporate news, shares of McDonald's (MCD 54.94, +1.55) rose 2.9% after the fast food giant reported that April same-store sales rose 6.9%, the 72nd consecutive monthly increase. In economic news, released at 10:00 ET, wholesale inventories dropped 1.6% in March, after falling 1.7% in February. The decline was worse than the consensus estimate that called for a 1.0% decline. The major indices gave up some gains after the release, but the market managed to trend higher throughout the session, eventually climbing above pre-release levels.

Separately, the April employment report was released at 8:30 ET. The April decline in payrolls of 539,000 was better than the expected decline of 600,000, but still represents bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, compared to the sharp drop in the private sector, including a 149,000 decline in manufacturing and 110,000 in construction. Also on the negative side, several prior months were revised lower, and the unemployment rate jumped to 8.9% from 8.5%, as expected. The stock market had a relatively muted response in premarket trade compared to the typical response to this release. For the week, the Dow, Nasdaq, S&P 500 rose 4.4%, 1.2% and 5.9%, respectively. Financials spiked 23% on the week.DJ30 +164.80 NASDAQ +22.76 SP500 +21.84 NASDAQ Adv/Vol/Dec 2112/3.20 bln/704 NYSE Adv/Vol/Dec 2645/1.90 bln/431

3:30 pm : Energy commodities continued their recent strong performance this session.

Natural gas rose significantly and closed at $4.29 per contract, up 4.7%. The natural gas contracts have ended the session higher everyday so far this month; they are now up over 27% over that time period.

Crude oil finished near session highs. The June contracts netted a 2% gain to close at $57.85 per barrel. The June futures contracts are now up ~14% for the month.

Precious metals finished modestly lower.

June gold futures contracts hit lows in the morning at $905.50 per ounce. The contracts were able to recover, however, and finished down just a fraction at $914.90 per ounce.

July silver also hit session lows in the morning. The contracts traded in negative territory for most of the session and closed down a modest 0.6% at $13.96 per ounce.DJ30 +149.74 NASDAQ +21.55 SP500 +19.83 NASDAQ Adv/Vol/Dec 1998/2.6 bln/726 NYSE Adv/Vol/Dec 2604/1.3 bln/466

3:00 pm : The major indices pick up some momentum going into the final hour of the trading week. The Dow and S&P are extending their advance, while the Nasdaq is climbing toward session highs.DJ30 +170.53 NASDAQ +24.34 SP500 +21.98 NASDAQ Adv/Vol/Dec 1989/2.15 bln/716 NYSE Adv/Vol/Dec 2632/1.18 bln/426

2:30 pm : The Dow and S&P edged past the afternoon range to establish fresh session highs. The S&P 500 is now up more than 2%.

Dow Jones reports that Richmond Fed President Lacker expects the rate of job loss to keep diminishing.DJ30 +144.41 NASDAQ +17.54 SP500 +18.42 NASDAQ Adv/Vol/Dec 1956/2.15 bln/733 NYSE Adv/Vol/Dec 2575/1.10 bln/466

1:55 pm : The major indices trade in a tight range near session highs.

Though the consumer staples sector (-0.5%) is underperforming on a relative basis, shares of McDonald's (MCD 54.73, +1.30) are outperforming the broader market after the fast food giant reported that April same-store sales rose 6.9%, the 72nd consecutive monthly increase.DJ30 +116.69 NASDAQ +11.26 SP500 +15.72 NASDAQ Adv/Vol/Dec 1863/2.08 bln/807 NYSE Adv/Vol/Dec 2491/1.00 bln/543

1:30 pm : The Dow and S&P 500 are near session highs, but are unable to extend gains.

The dollar has come under some selling pressure, now down 1.3%. Meanwhile, Treasuries have given up some of their gains, with the 10-year up only eight ticks.DJ30 +119.32 NASDAQ +13.89 SP500 +16.50 NASDAQ Adv/Vol/Dec 1899/1.95 bln/772 NYSE Adv/Vol/Dec 2513/935 mln/524

1:05 pm : After some choppy trade, stocks are posting solid gains at midday, led by financial stocks following the release of stress test details.

Stocks opened higher after the government yesterday evening released the results of its much anticipated stress test on 19 major financial institutions. The government has instructed 10 financial institutions to raise more capital by June 8. Of the $75 billion in new capital requirements, the largest by size are: Bank of America (BAC 14.18, +0.67), $33.9 billion, Wells Fargo (WFC 26.25, +1.49), $13.7 billion, GMAC, $11.5 billion and Citigroup (C 4.12, +0.31) $5.5 billion.

The companies are utilizing several ways to increase their common equity ratios, including common stock offerings, converting preferred shares and selling assets.

BofA plans to raise $17 billion in a common stock issue, with the remaining coming from preferred stock to equity conversion and asset sales. Wells Fargo is issuing common stock (~$7.5 bln announced this morning), retaining earnings and utilizing other internally generated sources. Citigroup will expand its previously announced conversion of preferred to common. GMAC said it may issue new common equity, issue mandatory convertible preferred shares or convert existing equity into a form of Tier 1 common equity. In addition, Morgan Stanley (MS 27.39, +0.25), which was directed to raise $1.8 billion by the government, priced 146 million shares of its stock, and a 21.9 million over-allotment, at $24 per share.

The remaining five banks that need more capital are regional banks: Regions Financial (RF 6.31, +1.08), $2.5 billion; SunTrust Banks (STI 20.32, +1.80), $2.2 billion; KeyCorp (KEY 7.69, +0.91), $1.8 billion; Fifth Third Bancorp (FITB 8.36, +3.01), $1.1 billion; PNC Financial Services (PNC 52.29, +7.82), $600 million.

In economic news, released at 10:00 ET, wholesale inventories dropped 1.6% in March, after falling 1.7% in February. The decline was worse than the consensus estimate that called for a 1.0% decline. The major indices gave up some gains after the release, but have since trended higher, with the Dow and S&P 500 near the best level of the session that was reached shortly after the opening bell.

Separately, the April employment report was released at 8:30 ET. The April decline in payrolls of 539,000 was better than the expected decline of 600,000, but still represents bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, compared to the sharp drop in the private sector, including a 149,000 decline in manufacturing and 110,000 in construction. The stock market had a relatively muted response in premarket trade compared to the typical response to this release.

Eight of the ten economic sectors are trading higher. Financials are leading the gains this session with an advance of 5.8%, recently hitting session highs. The energy sector is up 4.0% as the front month crude futures contract advances 2.3% to $58.01. Tech (-0.3%) under some selling pressure, which is resulting in the Nasdaq underperforming the other major indices.DJ30 +124.02 NASDAQ +15.99 SP500 +16.77 NASDAQ Adv/Vol/Dec 1899/1.84 bln/758 NYSE Adv/Vol/Dec 1508/886 mln/521

12:30 pm : The major indices continue to trade with gains, with the Dow and S&P 500 almost hitting fresh session highs.DJ30 +117.72 NASDAQ +10.09 SP500 +14.78 NASDAQ Adv/Vol/Dec 1806/1.64 bln/813 NYSE Adv/Vol/Dec 2437/782 mln/563

12:00 pm : Morgan Stanley (MS 26.94, -0.20) announced it exercised an over-allotment option to purchase an additional 21.9 million shares of its common stock at $24 per share. The company priced 146 million shares of its stock earlier today, and expected to gross proceeds of roughly $8 billion. The government required Morgan to raise $1.8 billion in fresh capital following the results of the stress test.

Meanwhile, representative Barney Frank said most banks will not need another infusion of government capital, according to Reuters.

The financial sector, +3.8%, is near session highs.

The major indices are making a modest upward move.DJ30 +105.06 NASDAQ +4.15 SP500 +12.51 NASDAQ Adv/Vol/Dec 1691/1.45 bln/881 NYSE Adv/Vol/Dec 2341/689 mln/625

11:30 am : The major indices recover some gains, but have run into some selling resistance.

The government told 10 of the 19 financial institutions it stress tested to raise more capital. Of the $75 billion in new capital requirements, the largest by size are: Bank of America (BAC 13.73, +0.22), $33.9 billion, Wells Fargo (WFC 25.21, +1.8%), $13.7 billion, GMAC, $11.5 billion and Citigroup (C 4.05, +0.24) $5.5 billion.

To meet these requirements, BofA plans to raise $17 billion in a common stock issue, with the remaining coming from preferred stock to equity conversion and asset sales. Wells Fargo is issuing common stock (~$7.5 bln announced this morning), retaining earnings and utilizing other internally generated sources. Citigroup will expand its previously announced conversion of preferred to common. GMAC said it may issue new common equity, issue mandatory convertible preferred shares or convert existing equity into a form of Tier 1 common equity.

Note shares of Citi are outperforming peers as some previous reports indicated the company would need roughly twice as much capital.DJ30 +81.01 NASDAQ +2.12 SP500 +9.50 NASDAQ Adv/Vol/Dec 1624/1.27 bln/897 NYSE Adv/Vol/Dec 2274/604 mln/665

11:00 am : News flow has slowed, as the major indices stick to a relatively tight range near session lows. Large-cap tech is underperforming, with the Nasdaq 100 down 0.7%.

The dollar is trading with a 0.7% loss, though it is off the worst levels of the session when it was down 0.9%.DJ30 +63.17 NASDAQ -2.33 SP500 +7.22 NASDAQ Adv/Vol/Dec 1652/1.08 bln/842 NYSE Adv/Vol/Dec 2169/510 mln/732

10:35 am : Stocks go on the retreat, with notable selling pressure within tech (-1.4%) and retail (-1.9%). The Nasdaq is now posting a slight loss.

The major indices were running into some resistance, with downward pressure accelerating following the weak wholesale inventories report at 10:30ET.

In commodity trading, June crude oil ($57.59 +$0.73) gave up some gains following the open of pit trade. Once again, crude oil looked at the equity market for direction, slipping a bit as stocks gave up some of their advance. June natural gas ($4.303 +$0.106) is also trading higher, managing to extend its gains following the open of pit trade. In metals, June gold ($913.80 -$0.80) spent the overnight session chopping around the flat line. It managed to trade to its best levels ahead of the jobs data, but dropped into negative territory following the release of that data.DJ30 +57.91 NASDAQ -2.03 SP500 +7.19 NASDAQ Adv/Vol/Dec 1537/884 mln/892 NYSE Adv/Vol/Dec 2062/416 mln/788

10:00 am : Just hitting the wires, March wholesale inventories declined 1.6% after falling 1.7% in February. The decline was worse than the consensus estimate of -1.0%.

The major indices extend their gains, and then pull back a bit as the data is released. All ten sectors are posting a gain.DJ30 +112.51 NASDAQ +20.10 SP500 +13.89 NASDAQ Adv/Vol/Dec 1885/436 mln/406 NYSE Adv/Vol/Dec 2433/233 mln/324

09:40 am : The stock market gets off to a positive start, as futures suggested.

Financials are leading the way higher following the release yesterday evening of the government stress test which showed 10 of 19 banks will require additional capital of $75 billion. Wells Fargo (WFC 23.87, -0.89), which has to raise $13.7 billion, is trading lower, however. The bank priced a 341 million share common stock offering at $22 per share, below yesterday's closing level of $24.76.DJ30 +106.50 NASDAQ +17.11 SP500 +12.05 NASDAQ Adv/Vol/Dec 1628/115 mln/418 NYSE Adv/Vol/Dec 1433/80 mln/215

09:13 am : S&P futures vs fair value: +13.40. Nasdaq futures vs fair value: +15.30.

08:58 am : S&P futures vs fair value: +12.10. Nasdaq futures vs fair value: +14.30. Futures are off their best levels of the session following the employment report, but still suggest a strong start for the stock market.

08:35 am : S&P futures vs fair value: +14.40. Nasdaq futures vs fair value: +18.00. Futures still point to a positive start, and trade a few points from session highs as the April employment report hit the wires. Nonfarm payrolls fell by 539,000, beating the consensus estimate of -600,000. The prior month was revised to a loss of 699,000 from a loss of 663,000. The unemployment rate rose to 8.9% (8.9% consensus) from 8.5%. Separately, Wells Fargo (WFC) priced 272 million shares at $22/ per share, according to Dow Jones. WFC closed at $24.76 yesterday.

08:00 am : S&P futures vs fair value: +15.00. Nasdaq futures vs fair value: +18.00. Equity futures are trading with strong gains following the release of the government's stress test results last night, and ahead of this morning's highly anticipated April Employment report (to be released at 8:30 ET). The results of the widely publicized stress test, which showed 10 of the 19 banks that were subject to the test will be required to raise additional capital buffers totalling ~$75 billion, were largely taken to be better than expected. Overnight, stocks traded higher in European and Asian markets, and this morning most of the financial companies that were subject to the stress test are trading higher in the pre-market. This week marks the end of the Q1 earnings reporting season.

06:29 am : S&P futures vs fair value: +12.20. Nasdaq futures vs fair value: +11.80.

06:29 am : Nikkei...3432.83...+47.10...+0.50%. Hang Seng...17389.87...+172.00...+1.00%.

06:29 am : FTSE...4454.94...+56.30...+1.30%. DAX...4916.58...+112.70...+2.30%.

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