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 Post subject: May 21st Thursday 2009
PostPosted: Thu May 21, 2009 4:35 pm 
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Key WRB Price Action

3min Regular Session Chart - The 0833am est interval the key change in supply/demand after the key economic report release and the market never recover to challenge that price area.

It also setup a few short signals between 0953am - 1015am est.

FYI - The above discussion is about one key WRB price action even though there were other key WRB price actions that occurred during the trading day that could be used to confirm entry signals, exit signals, profit targets et cetera.

Simply, knowledge of different types of key WRB's is what results in a complete understanding of the price action being traded as it is occurring in real-time.


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

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

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=195

My Trading Performance: +7.75 Emini ES points

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Dow Slump Extends To 3rd Day
Stocks fall as investors worry about the status of the global recovery.
By Ben Rooney, CNNMoney.com staff writer
Last Updated: May 21, 2009: 5:47 PM ET

NEW YORK (CNNMoney.com) -- Stocks closed sharply lower Thursday as optimism about a global economic recovery was tempered by mixed data and a potential downgrade of the United Kingdom's credit rating.

The Dow Jones industrial average (INDU), fell 130 points, or 1.5%, marking the third straight loss for the blue-chip measure. The S&P 500 (SPX) index dropped 15 points to close 1.7% lower and the Nasdaq composite (COMP) lost 1.9%.

Oil prices fell 1.6% but remained near 6-month highs. Bond prices fell, while the dollar lost ground against the euro and the pound.

The tone on Wall Street turned bleak late Wednesday after the Federal Reserve trimmed its 2009 economic growth targets and raised its unemployment forecast. The gloom was exacerbated Wednesday morning after ratings agency Standard & Poor's lowered its outlook for the U.K.

Thursday's selloff gained momentum as jobless data and a worse-than-expected regional manufacturing report raised doubts about the prospects for an economic recovery later in the year.

Stocks have gained some 30% over the last few months amid signs the pace of the recession has slowed. But Wall Street has become bearish in recent sessions as investors look for more concrete signs of economic recovery.

Todd Salamone, director of trading at Schaffer's Investment Research, said the market is no longer impressed with the "less bad" economic data that helped lift stocks off the 12-year lows hit March 9.

"We're in a period now where the market gets less of a positive surprise from less bad economic news," he said. "Unless we get even better less bad numbers, it may be difficult for the market to rally."

With economic jitters returning to the forefront, a closely watched gauge of investor fear, the CBOE Volatility Index, or VIX, rose to 32.7 after falling below 30 for the first time since September earlier this week.

No major economic reports or corporate results are due Friday. U.S. trading is expected to be quiet Friday with many market participants absent ahead of the Memorial Day holiday. The bond market will close early at 2 p.m. ET.

U.K. rating: Standard & Poor's affirmed the United Kingdom's top-tier credit rating but lowered its outlook for the country to "negative" from "stable."

S&P said its revision was based on the possibility that the U.K.'s debt burden could reach 100% of its gross domestic product, despite the British government's "further fiscal tightening."

The news raised concerns that other major economies that have borrowed heavily to fund economic stimulus efforts, including the United States, could face similar downgrades.

"The downgrade of Great Britain by S&P certainly damped enthusiasm," said Peter Cardillo, chief market economist at Avalon Partners.

Economy: The Labor Department reported that initial jobless claims declined by 12,000 in the week ending May 16.

The number of people filing for first-time jobless benefits totaled 631,000 last week, slightly more than expected. But those filing claims on an ongoing basis rose to 6.6 million, an all-time high.

Separately, the Conference Board's reading of leading economic indicators, which predicts economic conditions six to nine months in the future, rose 1% in April -- slightly better than the 0.8% analysts expected.

The Federal Reserve Bank of Philadelphia said its index of manufacturing activity in the mid-Atlantic region improved to negative 22.6 in May from negative 24.4 in April. Economists surveyed by Briefing.com had expected the index to improve to negative 18.

"We're starting to see numbers that aren't quite as damaging," said Ron Kiddoo, chief investment officer at Cozad Asset Management "But I don't think the market will trade to the upside until you start to see real growth."

Companies: Auto finance firm GMAC is poised to receive a second bailout from the Treasury, according to the Detroit News. The newspaper said the company is due to receive $7.5 billion more in aid.

In other auto news, the United Auto Workers union reached a deal Thursday with the Treasury Department and General Motors (GM, Fortune 500) on changing its labor contract with the troubled automaker. The accord removes a major hurdle in GM's bid to avoid bankruptcy. GM shares rose more than 30%.

In one of the first Nasdaq initial public offerings of the year, OpenTable, which operates a restaurant reservation system, raised $60 million, one of the deal's underwriters told Reuters. The company priced its shares at $20 each, which was higher than expected, and rose 59% to $31.89.

Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.36% from 3.19% Wednesday. Treasury prices and yields move in opposite directions.

The U.S. government announced more than $100 billion worth of new issuance Wednesday, raising concerns that supply will weigh on bond prices.

Other markets: Investors around the world were in a downbeat mood. In Asia, most shares finished lower. Major indexes in Europe tumbled about 2.7%.

In currency trading, the dollar fell versus major international currencies, including the euro, the yen and the British pound.

Oil slipped from its six-month high, but still continued to trade above $60 a barrel. The price of oil dropped 99 cents to settle at $61.05 a barrel.

COMEX gold for June delivery rose $13.80 to settle at $951.20 an ounce.

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Yahoo! Finance

4:15 pm : Emboldened by economic concerns, sellers took control of stocks and handed the major indices a marked loss. Though declines were deep and broad, stocks still finished off of their session lows.

A sharp pullback by the U.S. dollar helped gold prices close 1.5% higher at $951.20 per ounce and oil prices pare their losses to settle pit trading with a 1.6% loss at $61.02 per barrel. The greenback's 0.8% slide took the dollar index to a four-month low and came as global investors showed concern about the U.S. economic outlook in the wake of Standard & Poor's decision to lower its outlook for the United Kingdom. Just yesterday the Fed lowered its outlook for U.S. economic growth.

Worse-than-expected jobless claims supported the premise that economic conditions remain tenuous. Initial claims for the week ending May 16 totaled 631,000, while continuing claims climbed to a new record of 6.66 million.

Treasuries took a pounding amid the economic concerns. The benchmark 10-year Note fell 43 ticks, which pushed its yield near 2009 highs. Disappointing buybacks by the Fed also provided a catalyst for the downward move by Treasuries; investors have expected that the Fed will be expanding the size of such repurchases.

Participants largely dismissed a 1.0% increase in leading economic indicators for April even though the data was better than expected and marked the first increase in ten months.

Financials (+0.2%) attempted to provide support to the broader market. They oscillated between positive and negative ground before finishing as the only sector to log a gain. Regional banks (-4.5%) were a heavy drag on the financial sector as Fifth Third (FITB 6.95, -0.76) became the latest bank to come to market looking to raise capital in the wake of the government's stress tests. Fifth Third filed a $750 million common stock offering. Meanwhile, Regions Financial (RF 4.15, -0.74) disappointed investors by pricing its previously announced offering markedly below recent averages.

Losses were broad-based for the entire session. In the end, roughly 85% of the companies listed in the S&P 500 closed in the red. The S&P 500 did find some technical support as it encountered last week's lows.

General Motors (GM 1.91, +0.46) was one of only a handful of Dow components to log a gain. GM was supported by news the company has reached a labor contract deal with the United Auto Workers Union (UAW) and the Treasury, along with more reports indicating that GM's finance arm, GMAC, will receive $7 billion from the Treasury. Including this session's spike, shares of GM are up 77% week-to-date.DJ30 -129.91 NASDAQ -32.59 NQ100 -1.9% R2K -1.7% SP400 -1.8% SP500 -15.14 NASDAQ Adv/Vol/Dec 779/2.15 bln/1912 NYSE Adv/Vol/Dec 808/1.44 bln/2214

3:30 pm : July crude oil contracts traded below $60 per barrel at their session lows. A four-month low in the U.S. dollar, however, gave the oil futures traction. The crude oil futures rallied as high as $61.50 per barrel in the afternoon before closing at $61.02 per barrel, down 1.6%.

A weak dollar wasn't enough to provide support for natural gas futures, however. Bearish inventory data released this morning sent the futures prices sharply lower. The June contract continued its decline throughout the session and closed at $3.60 per contract, down 9.3%.

Precious metals were a bright spot in the market this session. Both gold and silver saw substantial runs as the dollar folded.

June gold futures contracts rallied from nearly unchanged late in the morning to close at $951.20 per ounce, up 1.5%.

Silver futures contracts, expiring in July, rallied from negative territory in the late morning to close at $14.45 per ounce, up 1.2%. DJ30 -180.24 NASDAQ -43.39 SP500 -21.64 NASDAQ Adv/Vol/Dec 661/1.84 bln/2023 NYSE Adv/Vol/Dec 617/992 mln/2421

3:00 pm : Stocks are moving sideways as the S&P 500 aligns with last week's lows. Losses remain broad-based as the stock market puts together its worst percentage decline in just over one week.

Trading volume remains low, which is generally expected with the long Memorial Day weekend quickly approaching.DJ30 -187.09 NASDAQ -47.84 SP500 -22.99 NASDAQ Adv/Vol/Dec 618/1.69 bln/2040 NYSE Adv/Vol/Dec 595/899 mln/2425

2:30 pm : The S&P 500 has moved another leg lower, but is receiving some technical support at the 879/880 level, which coincides with last week's lows. The S&P 500 has already fallen below its 20-day moving average.

More than 90% of the companies listed in the S&P 500 are trading with losses as the market trades at session lows.DJ30 -180.00 NASDAQ -45.94 SP500 -21.38 NASDAQ Adv/Vol/Dec 615/1.56 bln/2016 NYSE Adv/Vol/Dec 616/826 mln/2388

2:00 pm : Financial stocks have joined the rest of the market in negative territory as they trade with a 0.5% loss. All 10 major sectors are now in negative territory.

Though stocks are showing considerable weaknes, Treasuries aren't attracting any support. The benchmark 10-year Note is now near session lows as it slips 40 ticks, pushing its yield up to 3.34%.DJ30 -149.50 NASDAQ -38.28 SP500 -17.20 NASDAQ Adv/Vol/Dec 669/1.42 bln/1939 NYSE Adv/Vol/Dec 727/746 mln/2269

1:30 pm : After some choppy trading that followed a modest rebound, stocks are on the downturn once again. The move lower has brought the S&P 500 in close contact with its session low, and also placed it below its 20-day simple moving average, which is being treated as a key technical level.DJ30 -156.83 NASDAQ -39.85 SP500 -17.91 NASDAQ Adv/Vol/Dec 666/1.33 bln/1932 NYSE Adv/Vol/Dec 715/693 mln/2235

1:05 pm : The major indices have been under pressure since the opening bell as participants move to take profits from materials and energy stocks amid a pullback in commodity prices. However, financial stocks are showing resilience and helping limit the broader market's losses.

Losses are broad-based this session. Decliners outnumber advancing issues in the S&P 500 by 6-to-1. Materials stocks (-2.0%) and energy stocks (-2.3%) are among the weakest performers. Their downward move comes as participants lock in gains from recent sessions and commodity traders send the CRB Commodity Index 1.6% lower, which comes amid a 1.5% drop in crude oil prices ($61.10 per barrel). Crude had been down more than 3% earlier.

Gold has also rebounded, and now trades with a 1.0% gain. The upward move comes as the U.S. dollar goes on the retreat; the dollar index is currently down 0.8% after initially showing strength as the British pound came under pressure amid news that Standard & Poor's lowered its outlook for the United Kingdom.

Selling this session has been further supported by another round of worse-than-expected jobless claims data. Initial claims for the week ending May 16 totaled 631,000, while continuing claims climbed to 6.66 million.

The first increase in leading economic indicators in ten months had little effect on trading. According to the data, leading indicators for April increased 1.0%, which topped the 0.8% increase that was expected.

Though the broader market has been trading with widespread weakness, financial stocks are trading with strength. The sector is currently up 0.6%. However, regional banks (-4.5%) are weighing on the sector as banks continue flooding the market with dilutive equity offerings that are aimed at quelling concern about capital levels.DJ30 -126.08 NASDAQ -32.86 SP500 -13.52 NASDAQ Adv/Vol/Dec 673/1.24 bln/1900 NYSE Adv/Vol/Dec 791/650 mln/2145

12:30 pm : According to Reuters, General Motors (GM 1.60, +0.15) and the United Auto Workers Union (UAW) have reached a deal with the Treasury that includes modifications to certain trusts and labor contracts. The news follows reports that GM's finance arm, GMAC, will receive $7 billion from the Treasury.

Shares of GM are up for the fourth straight session, climbing nearly 50% during that time. Meanwhile, the broader market has advanced just 0.6% week-to-date.DJ30 -147.03 NASDAQ -38.41 SP500 -15.50 NASDAQ Adv/Vol/Dec 624/1.11 bln/1922 NYSE Adv/Vol/Dec 716/581 mln/2209

12:00 pm : Stocks continue to rebound after the S&P 500 hit a session low near 884. The upswing is being led by financial stocks, which are now up 1.0% after being down substantially in the early going.

Every other sector in the S&P 500 is still trading with a loss, though. Industrials are down 3.0%, more than any other major sector. General Electric (GE 13.33, -0.44) is a primary laggard in that sector.DJ30 -119.31 NASDAQ -30.29 SP500 -13.07 NASDAQ Adv/Vol/Dec 692/1.00 bln/1823 NYSE Adv/Vol/Dec 783/527 mln/2119

11:30 am : The major indices found some modest support after hitting session lows around 11:00 ET. Though the market has managed to arrest its decline, stocks remain near their worst levels of the session.

Despite the weakness in the stock market, longer-term Treasuries are trading lower, with the 10-year note down nine ticks and the 30-year bond down 21 ticks.

Separately, Treasury Secretary Geithner said he does not believe TARP funds provide a viable solution to challenges faced by California and other states, Reuters reports.DJ30 -148.36 NASDAQ -37.60 SP500 -16.95 NASDAQ Adv/Vol/Dec 595/842 mln/1915 NYSE Adv/Vol/Dec 475/432 mln/2296

11:00 am : Financial stocks are holding up better than the other sectors against this session's selling effort, though the sector is now down 0.9%. Losses in the other sectors range from 1.1% (consumer staples) to 3.5% (energy).

The financial sector's relative strength comes from specialized finance companies (+1.0%) like CME Group (CME 278.11, +4.36), which was upgraded by analysts at Goldman Sachs, according to Reuters. Asset managers and custody banks (+1.0%) like Bank of New York Mellon (BK 27.08, +0.42) are also providing support.

However, a sharp downturn in regional banks (-5.8%) is causing a considerable drag on the financial sector. Weakness among regional banks comes after Regions Financial (RF 4.06, -0.83) priced its previously announced common stock offering at $4 per share, which is nearly 20% below the prior session's closing price. Fifth Third Bancorp (FITB 6.91, -0.80) announced last evening that it is filing a common stock offering, which is expected to bring in $750 million.DJ30 -163.44 NASDAQ -35.81 SP500 -17.95 NASDAQ Adv/Vol/Dec 565/727 mln/1863 NYSE Adv/Vol/Dec 512/394 mln/2336

10:30 am : Weakness remains widespread within the equity markets. Commodities are generally contending with weakness of their own.

The CRB Commodity Index is currently down 0.5%, hampered by a 3.1% decline in crude oil prices. Crude is trading at $60.10 per barrel after closing Wednesday's pit trade just above $62 per barrel, which marked a six-month closing high.

Meanwhile, natural gas prices are down a sharp 6.5% to $3.71 per contract. Inventory data show a build of 103 bcf for the week ending May 15. A build of 95 bcf had been expected.

Precious metals prices are also down. Gold prices were recently quoted fractionally lower at $936.90 per ounce, while silver prices are down 0.8% to $14.16 per ounce.DJ30 -147.03 NASDAQ -28.25 SP500 -16.25 NASDAQ Adv/Vol/Dec 552/580 mln/1812 NYSE Adv/Vol/Dec 521/325 mln/2281

10:05 am : Sellers remain in control of early action. In turn, 90% of the companies in the S&P 500 trade with losses. Materials stocks (-2.5%), energy stocks (-2.5%), and industrial stocks (-2.6%) are among the weakest issues.

Despite the market's weakness, financial stocks showed signs of resilience by recovering from a 1.5% loss back to the unchanged mark. However, the move ultimately succumbed to selling. Financials now trade with a 0.3% loss.

Just released, leading economic indicators for April increased 1.0%, exceeding the 0.8% increase that was expected. The increase is the first in ten months.

Early movers: Trading up -- SMRT +49.6%, DDUP +33.3%, TSRA +22.7%, BPI +14.8%, VICL +13.6%, MNKD +10.4%, PLAB +7.8%, TECD +7.6% Trading down -- ZZ -33.4%, RF -19.6%, HOTT -13.3%, GME -12%, FONR -10.7%, CTV -10.5%, SHO -9.1%, IRE -8.9%, ALY -8.8%, HBAN -8.7%DJ30 -116.36 NASDAQ -13.34 SP500 -9.86 NASDAQ Adv/Vol/Dec 614/362 mln/1642 NYSE Adv/Vol/Dec 707/217 mln/2105

09:45 am : Stocks are down amid a broad-based selling effort. Weakness is considerable in the materials sector (-2.8%), which had traded with strength in the prior session as participants chased commodity stocks amid a weaker dollar and the notion that commodity demand will be rekindled by an economic rebound.

Such themes have bolstered crude oil prices recently, taking oil prices to a six-month high in the prior session. However, oil prices are reversing this session; crude was last quoted 2.5% lower at $60.50 per barrel. That has the energy sector trading with a 2.2% loss.DJ30 -109.83 NASDAQ -16.38 SP500 -11.38 NASDAQ Adv/Vol/Dec 590/211 mln/1564 NYSE Adv/Vol/Dec 563/153 mln/2099

09:15 am : S&P futures vs fair value: -12.80. Nasdaq futures vs fair value: -14.50. Banks continue coming to market with equity offerings amid ongoing concern about capital levels in the face of tenuous economic conditions, which have led to a record high 6.66 million continuing jobless claims. Moreover, unease related to global economic conditions led Standard & Poor's to lower its outlook for the United Kingdom, in turn pressuring the U.K.'s stocks and currency. Following the prior session's weak close, the headlines have led participants to bid stocks lower ahead of the opening bell.

09:00 am : S&P futures vs fair value: -12.00. Nasdaq futures vs fair value: -15.50. The major European indices are under pressure following news that Standard & Poor's lowered its outlook for the United Kingdom due to the view that net general government debt could approach 100% of GDP. Britain's FTSE is currently trading with a 2.5% loss amid broad-based weakness -- 95% of the companies listed in the FTSE are trading with losses. HSBC (HBC) is creating the heaviest drag as it tumbles more than 4%. GlaxoSmithKline (GSK) and AstraZeneca (AZN) are among the few companies making gains. The British pound is also under pressure; it was recently quoted 0.6% lower against the U.S. dollar. In France, the CAC is off by 1.9%; weakness is widespread. BNP Paribas and Carrefour are the only two companies in the 40-component index that are currently staging an advance. Meanwhile, Germany's DAX is down 2.0%. Allianz (AZ) is a primary laggard. In Asia, the MSCI Asia-Pacific Index shed 0.7% Thursday. Japan's Nikkei fell 0.9%. Exporters showed particular weakness as the yen climbed to a two-month high against the U.S. dollar and after the Federal Reserve trimmed its outlook for the U.S. economy. In Hong Kong, the Hang Seng dropped 1.6%. Gold stocks helped diminish the extent of the downturn as the price of the precious metal climbed to a multiweek high. In mainland China, the Shanghai Composite shed 1.5%.

08:35 am : S&P futures vs fair value: -8.60. Nasdaq futures vs fair value: -11.30. Stock futures have made a slight pullback in the wake of the latest jobless claims data. Initial jobless claims for the week ending May 16 totaled 631,000, which is above the 625,000 claims that were expected. The latest sum of initial claims marked a decrease of 12,000 from the previous week's upwardly revised 643,000 initial claims. Meanwhile, continuing claims keep climbing to record highs. Most recently, continuing claims reached 6.66 million, up from 6.59 million the week before, and more than the 6.65 million that was expected.

08:05 am : S&P futures vs fair value: -7.60. Nasdaq futures vs fair value: -9.30. Stock futures currently lag fair value by a relatively modest margin, indicating a lower start for the session. Many bank stocks are leading the downward move. Fifth Third Bancorp (FITB) has filed a $750 million common stock offering to partly fund the company's offer to exchange common shares for certain preferreds. Proceeds of the offering not used in the exchange offer will be available for general purposes. The company indicated that it believes that the offered exchange, along with other actions, will generate sufficient Tier 1 common equity to meet or exceed the $1.1 billion the company has committed to increase as a result of the SCAP assessment. Fellow regional bank Regions Financial (RF) priced its previously announced common stock offering at $4 per share, which should generate gross proceeds of some $1.85 billion when combined with certain mandatory convertible preferred stock. The common stock pricing is nearly 20% below the prior session's closing price. Amid the capital raises, analysts from Credit Suisse have issued cautious comments on regional banks, stating that many are undercapitalized and underreserved relative to future credit costs. Meanwhile, former Fed Chairman Greenspan indicated that the financial crisis has yet to end and that U.S. banks must raise large amounts of money, according to Bloomberg.com. Weekly jobless claims data are due shortly (8:30 AM ET). Leading economic indicators for April are due later this morning (10:00 AM ET).

06:36 am : S&P futures vs fair value: -7.20. Nasdaq futures vs fair value: flat.

06:36 am : Nikkei...9264.15...-80.50...-0.90%. Hang Seng...17199.49...-276.40...-1.60%.

06:36 am : FTSE...4378.09...-90.30...-2.00%. DAX...4967.50...-71.40...-1.40%.

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