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 Post subject: January 20th Wednesday 2010 Emini TF ($TF_F) points +15.10
PostPosted: Wed Jan 20, 2010 5:33 pm 
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Written By M.A. Perry
Trader and Founder of WRB Analysis (wide range body analysis)

Trade journals are crucial in preventing us traders from becoming complacent or content with our trading plan or the markets because without having the ability to review archives of past trading days in a forever changing market...we won't know it's time to adapt when change occurs in the markets because broker statements alone doesn't help us keep that edge in comparison to a trade journal. In addition, although this journal contains advertisements involving my trade methods, it does contain useful trading tips a few times per week. Thus, if you're looking for trading tips that can improve your trading and understand that profitable trading involves more than just entry signals...consistently read this trade journal and the #FuturesTrades chat room logs where I post my trades in real-time from entry to exit (see link below) via my IRC user name wrbtrader that's the same as my user name on twitter.

Today's #FuturesTrades chat room logs is archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=70&t=431.

Quote:
Today's results are 5 wins : 4 losses. Aggressive today but had 2 mismanage trades that resulted in losses but because I was trying something new in my trade management after entry. Key changes in supply/demand today (WRB S/R Zones) was 0931am est and 1005am est that had an enormous impact on today's trading session. However, only the 0931am est WRB S/R Zone is still useful for tomorrow's session as long as the overnight trading session doesn't fill it in. Trading Tip: Lower your position size in declining volatility trading conditions.


FYI - You can ask me questions here at the forum or you can tweet me on twitter about anything related to today's trading or related to your own trading.

Image@ http://twitter.com/wrbtrader

In addition, posted below are direct links about my trade methodology or trading approach that enables me to identify key trading areas in the price action that represent changes in supply/demand and volatility along with being able to exploit these changes via WRB Analysis (wide range body analysis).


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

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

Also, if you're interested in having free access to one of my profitable trade strategies along with earning extra income with little effort...join my referral program @ http://www.thestrategylab.com/ReferralProgram.htm

My Trading Performance: +15.10 points in the ICE Russell 2000 Emini TF ($TF_F) Futures

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Stocks Get Knocked Back
By Alexandra Twin, senior writer
January 20, 2010: 5:42 PM ET

NEW YORK (CNNMoney.com) -- Stocks slumped Wednesday as a strong dollar and questions about China's lending practices slammed commodities, one of the leaders of the recent rally.

IBM dragged on the tech sector as investors picked apart the company's outlook one day after sending the stock higher.

The Dow Jones industrial average (INDU) fell 122 points, or 1.1%, after having fallen as much as 207 points in the morning. The S&P 500 index (SPX) lost 12 points, or 1%. The Nasdaq composite (COMP) gave back 29 points, or 1.3%.

A stronger dollar pressured dollar-traded commodity prices and stocks. The sector was also hit by reports that China intends to slow the pace of lending this year in an attempt to get ahead of inflation.

"China's efforts to get their banks to lend less really hit commodities hard, because China is the marginal buyer of commodities," said David Chalupnik, head of equities at First American Funds.

Commodities were also under pressure in reaction to the dollar, which firmed up in comparison to a weak euro and in response to the surprise Republican senatorial victory in Massachusetts. (For more details, click here.)

Commodities and commodity stocks were among the big leaders of the rally over the last year and the weakness in the sector dragged on the broader market Wednesday.

IBM (IBM, Fortune 500) and the techs led stocks higher Tuesday and IBM and the techs were among the biggest drags Wednesday, as investors backtracked one day after the Dow, S&P 500 and Nasdaq ended at the highest levels since Sept. 2008.

With IBM, earnings and profit margins were good, but revenues were mostly in line with forecasts and the outlook was good not great, relative to high expectations, Chalupnik said.

"Expectations are higher after two quarters of cost-cutting fueled earnings growth, but little revenue growth," Chalupnik said. "I think the market now needs to see the revenues come in strong. Just meeting is not enough."

After the close, Starbucks (SBUX, Fortune 500) reported higher quarterly sales and earnings that topped estimates thanks largely to growth at stores open a year or more, a retail metric known as same-store sales.

IBM was one of the Dow's biggest decliners. Other big losers included Hewlett-Packard (HPQ, Fortune 500), Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).
0:00 /2:33Mass. race could affect health care bill

IBM: The tech leader reported higher quarterly sales and earnings late Tuesday that topped estimates. But investors took a "sell the news" approach and sent shares almost 3% lower Wednesday.

IBM said it earned $3.59 per share versus $3.28 a year earlier. Analysts surveyed by Thomson Reuters thought it would earn $3.47 per share. Sales inched up to $27.23 billion from $27 billion in the prior year versus forecasts for a drop to $26.96 billion.

Looking forward, IBM said it expects earnings per share of at least $11 for 2010.

After the big gains of 2009, investors want to see even stronger outlooks from companies, said Kim Caughey, senior equity analyst at Fort Pitt Capital Group.

"Investors are using IBM as a bellwether for technology when there are still pockets of opportunity within the sector," Caughey said.

Currently, S&P 500 earnings are on track to have gained over 180% from a year ago, according to the latest estimates from earnings tracker Thomson Reuters. But the strength is largely concentrated in financials and is in comparison to an abysmal fourth quarter of 2009.

"I don't expect we'll get much bad news out of the earnings because the pre-announcement period was very quiet," Caughey said. "That having been said, if you get a couple of bad announcements, you're going to see a volatile market."

Banking results: Dow component Bank of America (BAC, Fortune 500) said losses widened to $5.2 billion in the fourth quarter of last year, partly due to the bank paying back government bailout funds. BofA said the repayments shaved $4 billion off its bottom line.

The company was expected to post a loss of $3.9 billion, according to forecasts. On a per-share basis, BofA lost 60 cents versus forecasts for a loss of 52 cents. Shares were barely changed.

Morgan Stanley (MS, Fortune 500) reported its second-straight quarterly profit, one year after posting a massive loss. The financial firm said it earned $617 million for the quarter versus a loss of $11 billion a year ago. The stock fell around 1.7%.

Wells Fargo (WFC, Fortune 500) reported a surprise profit of $2.82 billion, or 8 cents a share, versus forecasts for a small loss. The bank benefited from stronger fee income, even as it repaid $25 billion in bailout money. Shares fell 1.6%.

Health care: Investors were also assessing the surprise Republican election to the Massachusetts Senate seat previously held by the late Ted Kennedy.

The upset victor could kill health care reform by ending the Democrats' filibuster-proof majority in the Senate. Additionally, House Democrats are mostly opposed to the idea of passing the Senate health care bill.

Investors may also be betting that the change in the balance of power in the Senate will mean other congressional spending programs could be cut back or set aside, which had an impact on the dollar.

Economy: Building permits, a measure of builder confidence, rose to a 653,000 unit annual rate in December from a 589,000 rate in November, the government reported. Permits were expected to rise to a 590,000 rate, according to a consensus of economists surveyed by Briefing.com.

But housing starts fell to a 557,000 unit annual rate from a 580,000 unit rate in November. Economists thought starts would fall to a 572,000 unit rate.

The Producer Price Index (PPI), a measure of wholesale inflation, rose 0.2% in December after climbing 1.8% in the previous month. Economists thought it would hold steady. The so-called core PPI, which strips out volatile food and energy prices, was flat versus forecasts for a gain of 0.1%. Core PPI rose 0.5% in the prior month.

World markets: Asian markets ended lower, with China losing 3% on the debt issue. European markets ended lower as well.

Commodities and the dollar: The dollar gained versus the euro and the yen.

COMEX gold for February delivery fell $27.40 to settle at $1,112.60 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last month.

U.S. light crude oil for February delivery fell $1.87 to settle at $77.62 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose in a classic flight-to-quality, lowering the yield on the 10-year note to 3.65% from 3.69% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by almost three to one on volume of 1.06 billion shares. On the Nasdaq, decliners beat advancers by over two to one on volume of 2.39 billion shares.

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Yahoo! Finance

4:30 pm : Disregard for a large batch of better-than-expected earnings reports gave way to a stiff bout of selling pressure that put stocks on track for their worst loss in more than two months. However, financials were able to garner support into the close and help the broader market trim its losses.

Stocks set fractionally improved 52-week highs in the previous session, but momentum failed to carry over as global participants reacted negatively to news that China's authorities reportedly ordered some banks to curb lending in a move suggestive of tighter monetary policy. The order precedes the release of China's fourth quarter GDP numbers, so many have inferred that the report will feature a strong upside reading.

Concern about a forced slowdown of China's economy led some to consider the implications for the global economy's recovery. That weighed on both stocks and commodities and even led some to seek safety in the U.S. dollar. Support for the dollar helped the greenback gain 1.1% against a basket of foreign currencies, but it only exacerbated the burden on stocks and commodities.

Broad-based weakness pushed the stock market down as much as 1.8% and momentarily below its July to January trendline even though there were plenty of positive earnings surprises. IBM (IBM 130.25, -3.89), Coach (COH 35.35, -2.10), Wells Fargo (WFC 27.82, -0.46), U.S. Bancorp (USB 25.01, +0.52) and State Street (STT 46.28, +3.08) were among the more widely-held companies to top expectations. However, Morgan Stanley (MS 30.63, -0.53) came short of the consensus earnings estimate and Bank of America (BAC 16.49, +0.17) had a deeper-than-expected loss. Bank of America redeemed itself with news of more stable credit costs, particularly at the consumer level.

Amid the many earnings reports from financial players, several banking issues were able to garner support. Diversified banks buckled and gave up an early gain to finish with a 0.7% loss, but regional banks gained 1.7%. Their strength helped the broader financial sector climb from a 1.2% loss to finish the session just 0.1% to the downside.

Despite relative leadership from the financial sector, weakness remained widespread. As such, eight of the 10 sectors logged losses of 1% or more.

Health care held up relatively well. It finished the session just 0.5% lower. It had been up in early action amid continued support from those that speculate that health care reform could be stalled or stymied with the election of a Republican to the Massachusetts Senate seat.

Energy stocks suffered the most this session. They dropped 1.7% as a group. The sector's weakness was worsened by softer oil prices. February crude oil contracts, which expired at the close of pit trade, settled with oil quoted 1.8% lower at $77.62 per barrel, while March contracts closed with oil priced 2.2% lower at $77.55 per barrel.

Economic data was mixed overall and didn't do anything for market participants this session. More specifically, the December Producer Price Index increased 0.2% month-over-month, which was higher than the consensus call for a flat reading. Monthly producer prices had spiked 1.8% in November. Excluding food and energy, producer prices for December were flat from the previous month. An increase of 0.1% had been widely forecast following the 0.5% monthly increase that was posted in November.

Housing starts for December hit an annualized rate of 557,000, which is a slower clip than the expected rate of 572,000 units. It also marked a pullback from the annualized rate of 580,000 that was registered in November.

However, building permits hit an annualized rate of 653,000 in December. That was far higher than the annualized rate of 580,000 permits that the consensus had predicted and up from the previous month's annualized rate of 589,000 permits.

Advancing Sectors: (None)
Declining Sectors: Energy (-1.7%), Materials (-1.5%), Tech (-1.5%), Telecom (-1.4%), Industrials (-1.3%), Consumer Discretionary (-1.2%), Utilities (-1.1%), Consumer Staples (-1.0%), Health Care (-0.5%), Financials (-0.1%)DJ30 -122.28 NASDAQ -29.15 NQ100 -1.5% R2K -1.5% SP400 -0.8% SP500 -12.19 NASDAQ Adv/Vol/Dec 729/2.38 bln/1968 NYSE Adv/Vol/Dec 787/1.05 bln/2249

3:35 pm : Another attempt by China to tighten monetary policy sent asset values lower across the board this session. A strong dollar exacerbated the move lower. The broader market is down in excess of 1.0%. Meanwhile, the dollar index is up 1.1% and the CRB Commodity Index closed down 1.3%.

In crude oil, the new front month contract as of tomorrow, March, saw a steady decline throughout the session. It closed down 2.2% at $77.55 per barrel. The February contract expired at the close at $77.62 per barrel, down 1.8% on the session. Inventory data will be released tomorrow morning at 11:00 ET.

Natural gas performed relatively well this session. It closed down just 1.1% at $5.50 per contact.

Precious metals traded to lows not seen since the first trading days of the year as the dollar strengthened throughout the session. February gold closed 2.4% lower at $1112.60 per ounce after trading as low as $1106.80 per ounce. March silver closed 4.9% lower at $17.88 per ounce after trading as low as $17.81 per ounce.DJ30 -128.32 NASDAQ -32.52 SP500 -13.19 NASDAQ Adv/Vol/Dec 715/1.99 bln/1966 NYSE Adv/Vol/Dec 752/815 mln/2280

3:00 pm : The major indices have gradually made their way off of session lows, but they continue to trade with sizable losses.

Financials have managed to cut their loss to just 0.2%. The sector had been down more than 1% when it was at its sesison low. Regional banks have been the best source of support for the sector this afternoon; they are up 1.7% at the moment. Diversified banks had been leaders earlier, but they have since retreated to trade flat.

Though financials have managed to pare their losses, they have yet to return to their session highs, which were reached in the early going when the sector sported a gain of roughly 0.4%. DJ30 -133.76 NASDAQ -34.55 SP500 -13.85 NASDAQ Adv/Vol/Dec 676/1.80 bln/2000 NYSE Adv/Vol/Dec 701/751 mln/2315

2:30 pm : Stocks continue to be bogged down by broad-based weakness. As a result, some 90% of the companies in the S&P 500 remain in negative territory.

Meanwhile, the Nasdaq 100 continues to trade with a 2.0% loss. Of its 100 components, only three are in higher ground. Large-cap tech issues are the primary laggards as Microsoft (MSFT 30.47, -0.63), Research In Motion (RIMM 63.78, -1.52), Apple (AAPL 210.79, -4.25), Cisco (CSCO 24.32, -0.53), and Yahoo! (YHOO 16.41, -0.34) have all dropped 2% or more.

The performance of large-cap tech issues in the new year has contrasted that of 2009. Since the start of 2010 the Nasdaq 100 has slipped 0.1%, but large-cap tech had led the Nasdaq 100 to a gain of more than 50% last year. DJ30 -155.38 NASDAQ -37.68 SP500 -15.68 NASDAQ Adv/Vol/Dec 610/1.70 bln/2059 NYSE Adv/Vol/Dec 663/700 mln/2362

2:00 pm : The S&P 500 recently made its way off of its session low, which coincided with the July to January trendline that runs just above the 1130 mark. A pullback and close below the trendline would mark a significant technical event for traders. Even if the line isn't violated this session, it will remain a point of focus in sessions to come.

In the event that the trendline is violated, some traders believe that the event could cause at least a short-term change in sentiment among broader market participants. Bullish sentiment in recent months has made pullbacks short and shallow as participants look for entry points to the stock market's rally from the multiyear lows that it hit this past year. DJ30 -156.81 NASDAQ -37.41 SP500 -15.63 NASDAQ Adv/Vol/Dec 593/1.60 bln/2045 NYSE Adv/Vol/Dec 652/649 mln/2362

1:30 pm : Stocks continue to trade near session lows as widespread weakness persists. What's more, such weakness has put the stock market on track for its worst single-session percentage loss since late October. However, the stock market is still up 1.3% since the start of the year.

Financials continue to contain their losses. While every other major sector in the S&P 500 is down in excess of 1%, financials are down a relatively tame 0.6%. That has helped financials become the best performers so far this year; they are up 4.4% year-to-date. DJ30 -193.47 NASDAQ -44.81 SP500 -19.09 NASDAQ Adv/Vol/Dec 523/1.49 bln/2101 NYSE Adv/Vol/Dec 578/600 mln/2416

1:00 pm : Stocks have fallen en masse from fractionally improved 52-week highs in the previous session to their lowest levels since the first trading session of the new year. The downward move comes despite a bundle of better-than-expected earnings reports.

Wells Fargo (WFC 27.88, -0.40), U.S. Bancorp (USB 25.03, +0.54), State Street (STT 45.89, +2.69), Bank of New York (BK 30.38, +0.85), and Northern Trust (NTRS 55.29, +2.86) all unveiled positive earnings surprises ahead of the opening bell, but Morgan Stanley (MS 30.62, -0.54) and Bank of America (BAC 16.36, +0.04) both dropped the ball. Morgan Stanley came up short of earnings expectations, while Bank of America had a deeper-than-expected loss. However, Bank of America was able to redeem itself with a statement that it has seen its credit costs stabilize.

Thanks to strength among bank shares, financials have been able to limit their collective losses to 0.8% in the face of considerable, widespread weakness.

Health care stocks displayed strength as their gains from the previous session extended into this morning's early action. The momentum was helped by news that health care reform could be stalled or stymied since the Massachusetts Senate seat has gone to a Republican. However, the health care sector has since buckled, such that it now trades with a 1.3% loss.

The eagerness of participants to take profits from the previous session's spike has led many to disregard better-than-expected earnings from Dow component IBM (IBM 129.18, -4.96), which gave its quarterly report last evening. The stock is on pace for its worst percentage loss in three months and has dragged the tech sector, which is the largest by market weight, to a 2.2% loss.

Losses are steepest among materials stocks. The sector's current 2.3% drop has come as a result of both broader market weakness and broadly lower commodity prices, which are down a collective 1.5%, as measured by the CRB Commodity Index.

Both commodity prices and stock prices have been further hampered by strong gains by the greenback -- the dollar is currently up 1.1% against a basket of foreign currencies.

Overseas markets failed to offer reason to extend the previous session's buying effort as major indices in Asia and European bourses booked sizable losses. Some of the steepest declines came in China, where authorities reportedly ordered some banks to curb lending so as to prevent the country's economy from overheating. The move is suggestive of tighter monetary policy.

This morning's economic data didn't do anything to improve this session's tone of trade. Generally, December producer prices didn't diverge too much from consensus forecasts. Housing starts for December came in at a slower rate than expected, but building permits were up much more than expected.

Volatility has spiked amid this session's declines. The Volatility Index is currently up 10.2% in its sharpest spike in one month.DJ30 -189.46 NASDAQ -44.83 SP500 -18.96 NASDAQ Adv/Vol/Dec 513/1.35 bln/2093 NYSE Adv/Vol/Dec 575/558 mln/2402

12:30 pm : Gains were strong and broad-based in the previous session, such that more than 10% of the companies listed in the S&P 500 logged fresh 52-week highs. However, action this session has been decidedly negative since the opening bell; sellers have handed losses to more than 90% of the companies in the S&P 500.

This session's broad-based losses have led to some modest gains by Treasuries. As such, the benchmark 10-year Note is up 11 ticks at the moment. The move has trimmed its yield to 3.65%. At the long end of the yield curve, the 30-year Bond is up a more impressive 23 ticks. The Bond's yield stands at 4.54% as a result. DJ30 -181.22 NASDAQ -41.77 SP500 -17.67 NASDAQ Adv/Vol/Dec 503/1.24 bln/2095 NYSE Adv/Vol/Dec 591/514 mln/2389

12:00 pm : Within the S&P 500, Citigroup (C 3.46, -0.08) and Bank of America (BAC 16.54, +0.22) are the two most actively traded names by volume this session. Citigroup reported yesterday morning an in-line loss for its latest quarter, but Bank of America unveiled this morning a deeper-than-expected loss for its latest quarter. Bank of America has been one of the few financial firms to fall short of expectations, but it did win approval with its statement that it has seen its credit costs stabilize.

State Street (STT 15.57, +2.37) and Northern Trust (NTRS 55.15, +2.72) have been primary sources of support for the financial sector this session, though. Most recently, their strength has helped lead the financial sector off of its session low so that it now trades with a 0.6% loss, which is less than that of any other sector. Gains by STT and NTRS come amid upside earnings surprises from the pair. DJ30 -195.89 NASDAQ -44.28 SP500 -19.35 NASDAQ Adv/Vol/Dec 463/1.11 bln/2107 NYSE Adv/Vol/Dec 556/468 mln/2406

11:30 am : The Dollar Index is up 1.1% in its best single-session move since a 1.7% surge in early December. The latest move comes on top of the greenback's 0.6% gain in the previous session.

Such recent strength has been troublesome for basic materials stocks, which have also been hampered by broader market weakness. The confluence of those pressures has caused steel stocks to surrender 3.7% and gold stocks to drop 6.2%. Diversified metals and miners, which carry some of the most weight in the materials sector, are down 3.5%, collectively. The broader materials sector is down 2.5%, worse than any other major sector in the S&P 500.

Losses have been the least in the financial and health care sectors. However, both sectors are still down a marked 1.0% after they had sported modest gains in the early going. DJ30 -186.52 NASDAQ -45.53 SP500 -18.83 NASDAQ Adv/Vol/Dec 432/981 mln/2107 NYSE Adv/Vol/Dec 491/414 mln/2427

11:00 am : Selling pressure continues to weigh on stocks. In turn, the S&P 500 and the Dow are at fresh session lows, while the Nasdaq has come back in touch with the session lows that it set earlier. Their losses have completely erased the broad-based gains that were booked in the previous session and are now testing the lows that were registered earlier this week.

Volatility has spiked with this session's selling effort. That has the Volatility Index, often dubbed the fear index, up 9.3% in its sharpest spike in one month.DJ30 -181.60 NASDAQ -42.88 SP500 -18.13 NASDAQ Adv/Vol/Dec 449/802 mln/2043 NYSE Adv/Vol/Dec 505/343 mln/2378

10:30 am : The stock market at morning lows, while the US Dollar Index is at its morning highs, all of which is pressuring the commodity complex. All commodities, excluding nickel and orange juice, are trading lower in the Reuters/Jefferies CRB Commodity Index this morning.

February crude oil continues to slide downward and is trading near its recently hit morning low of $77.06 per barrel. Currently, the energy component is 2.4% lower at $77.16 per barrel. February natural gas traded higher in the overnight session, but dipped into negative territory early this morning. Natural gas then attempted to rally, but couldn't hold its gains and fell to fresh lows at $5.478 per MMBtu. Nat gas is trading just above this level, currently at $5.505 per MMBtu, 0.9% lower.

Precious metals are taking a hit as well this morning, as February gold and March silver recently put in their own new session lows. Gold is currently 2.5% lower at $1112 per ounce, while silver is 3.8% lower at $18.08 per ounce. DJ30 -168.23 NASDAQ -41.85 SP500 -15.79 NASDAQ Adv/Vol/Dec 482/565.8 mln/1940 NYSE Adv/Vol/Dec 508/261.0 mln/2331

10:00 am : A recent flurry of selling pressure knocked the broader market another leg lower, but stocks have managed to make a modest bounce off of their morning lows. The downward move undercut health care stocks, though; the sector has been left to trade with a fractional loss after it had been up firmly in the first few minutes of action.

Financials have managed to hold on to a slight gain of 0.2%. Diversified banks (+1.3%) remain strong.

Selling pressure is currently most intense among energy issues. Their slide comes as broad equity market pressure and softer oil prices, which are down 1.7% to $77.70 per barrel, conspire to take the sector to a 1.8% loss. Oil and gas drillers (-2.4%) and oil and gas equipment outfits (-2.2%) are among the weakest performers in the bunch. As such, Diamond Offshore (DO 101.38, -2.14) and Schlumberger (SLB 69.44, -1.50) are laggards in the group.

Early movers: Trading up -- LXRX +37.6%, CREE +15.1%, RMBS +11.3%, EAT +9.1%, MMR +8.5%, EXXI +8.4%, FXP +6.8%, NSTC +6.3%, ZSL +5.8%, IOC +5.4%; Trading down -- BBD -10.9%, AXU -10.1%, LXP -9%, CMFO -7.7%, PFSW -7.1%, NBG -6.8%, CSX -6.4%, SPW -5.9%

Advancing Sectors: Financials (+0.2%)
Declining Sectors: Energy (-1.8%), Materials (-1.5%), Industrials (-1.5%), Tech (-1.4%), Utilities (-1.3%), Consumer Staples (-1.0%), Telecom (-0.9%), Consumer Discretionary (-0.7%), Health Care (-0.1%)DJ30 -113.89 NASDAQ -21.07 SP500 -10.08 NASDAQ Adv/Vol/Dec 648/309 mln/1676 NYSE Adv/Vol/Dec 583/173 mln/2161

09:45 am : The broader market has slipped in the first few minutes of trade, but health care has managed to extend its strong gains from the previous session as participants continue to consider the possibility that health care reform may be stalled or stymied by Republican Scott Brown's Massachusetts Senate seat win. In addition to their 2.0% gain in the previous session, health care stocks are up 0.6% this morning.

Managed care providers have underpinned the health care sector's strength for two straight sessions. Managed care providers climbed 3.7% in the previous session and are already up another 1.9% this morning. Cigna (CI 39.15, +1.23) is currently a primary leader in the pack.

Financials recently joined health care stocks in higher ground. The move comes as diversified banks bounce to a 1.1% gain. Still, the broader sector is up a modest 0.4%. Nonetheless, financials and health care stocks make up the only two sectors to sport gains. DJ30 -107.46 NASDAQ -20.50 SP500 -9.99 NASDAQ Adv/Vol/Dec 622/189 mln/1641 NYSE Adv/Vol/Dec 524/118 mln/2148

09:15 am : S&P futures vs fair value: -9.40. Nasdaq futures vs fair value: -14.80. Stock futures point to a pullback from the previous session's broad-based advance, which took the stock market to a fractionally improved 52-week intraday high and closing high. The turn in tone comes in the face of a flurry of better-than-expected earnings results, though Bank of America (BAC) disappointed with a worse-than-expected loss. Disappointment has also been linked to news that China has instructed some of its banks to curb lending in order to meet capital requirements and prevent the country's economy from overheating. That news weighed on Asian markets and European bourses alike. Though participants looked past a stronger dollar in the previous session, additional gains by the greenback haven't helped things this morning -- the Dollar Index is currently up nearly 1.0% against competing currencies in its strongest single-session move in more than one month. Economic data, which includes PPI figures for December and December housing starts and building permits, have been a bit mixed.

09:00 am : S&P futures vs fair value: -9.00. Nasdaq futures vs fair value: -14.00. Broad-based selling had knocked European markets lower early in the previous session, but the bourses rebounded to book strong gains in Tuesday's trade. However, selling has resumed this session. That has sent Britain's FTSE to a 0.8% loss. Metals and miners players are among the weakest listings as Rio Tinto (RTP), BHP Billiton (BHP) and Xstrata slide. Their decline comes even though Reuters reported that BHP lifted its iron ore output in its most upbeat outlook for commodities since the global downturn. German steelmaker ThyssenKrupp was more pessimistic as it said its Alabama plant will not reach full production until 2013 because of weak North American demand. Germany's DAX is down 0.6% at the moment. Meanwhile, France's CAC is currently down 0.7%. Renault is a laggard after its shares were downgraded by analysts at UBS. In Asia, the MSCI Asia Pacific Index shed 0.7%, while Japan's Nikkei lost 0.3%. Nomura, Matsui Securities, and Daiwa Securities Group all fell markedly. In Hong Kong, the Hang Seng dropped 1.8% after the chief Chinese banking regulator said some banks were asked to curb lending after they failed to meet capital requirements. That weighed heavily on China Construction Bank and Bank of China. In mainland China, the Shanghai Composite fell 2.9%. According to news, authorities instructed some banks to restrict lending for the rest of January.

08:35 am : S&P futures vs fair value: -6.60. Nasdaq futures vs fair value: -11.00. Stock futures continue to lag fair value by a moderate margin in the wake of the latest dose of data. The December Producer Price Index increased 0.2% month-over-month, which is higher than the consensus call for a flat reading after the sharp 1.8% monthly increase in November. Excluding food and energy, producer prices for December were flat from the previous month, but that was a bit of a surprise since an increase of 0.1% had been widely forecast following the 0.5% monthly increase that was posted in November. In other economic news, housing starts for December hit an annualized rate of 557,000, which is a slower clip than the expected rate of 572,000 units and a pullback from the annualized rate of 580,000 that was registered in November. Meanwhile, building permits hit an annualized rate of 653,000 in December. That was far higher than the annualized rate of 580,000 permits that the consensus had predicted and up from the previous month's annualized rate of 589,000 permits.

08:00 am : S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -11.00. Strong, broad-based buying in the previous session took stocks to a fresh 52-week closing high, but participants have turned a bit to put moderate pressure on stock futures this morning. Pressure comes in the face of several better-than-expected earnings reports, including those of tech bellwether IBM (IBM), high-end retailer Coach (COH), and banking and financial services outfits U.S. Bancorp (USB), State Street (STT), and Bank of New York (BK). However, Bank of America (BAC) disappointed with a deeper-than-expected loss, while Morgan Stanley (MS) and Wells Fargo (WFC) have yet to report their latest figures. Keeping on banks, Reuters reported that China's authorities ordered some big banks to curb lending for the rest of January in a move that has been viewed as an effort to tighten policy so as to prevent the country's economy from overheating. China's Shanghai Composite dropped nearly 3% in the wake of the news. In addition to a couple of key earnings announcements, there are several key reports still to come this morning, including producer prices for December and housing starts and building permits for December. The latter half is due at the bottom of the hour.

06:21 am : S&P futures vs fair value: -6.30. Nasdaq futures vs fair value: -13.00.

06:21 am : Nikkei...10737.52...-27.40...-0.30%. Hang Seng...21286.17...-391.80...-1.80%.

06:21 am : FTSE...5494.00...-19.10...-0.40%. DAX...5965.09...-11.20...-0.20%.

M.A. Perry
Trader and Founder of WRB Analysis (wide range body analysis)
Go Back To TheStrategyLab.com Homepage


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