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 Post subject: October 18th Monday 2010 Emini TF ($TF_F) points +4.60
PostPosted: Tue Oct 19, 2010 8:26 pm 
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Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Stocks Get Pumped Up For Earnings
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By Julianne Pepitone, staff reporter
October 18, 2010: 4:51 PM ET

NEW YORK (CNNMoney.com) -- Stocks gained steam to close the session sharply higher Monday, extending last week's rally, on upbeat earnings from Citigroup and improvement in the housing sector.

The Dow Jones industrial average (INDU) added 81 points, or 0.7%, to end at 11,143.69. The S&P 500 (SPX) rose up 9 points, or 0.7%, to settle at 1,184.71, and the Nasdaq composite index (COMP) gained 12 points, or 0.5%, to close at 2,480.66.

The blue-chip Dow index ended strong, with 24 of its 30 components closing higher. Financial stocks helped the advance following Citi's strong earnings, with JPMorgan (JPM, Fortune 500) ending 2.8% higher. The energy sector lagged, with Halliburton and Fluor Energy losing about 5%.

It was a strong start to a week that will bring an avalanche of corporate results. Seven of the 30 companies that make up the Dow will release their third-quarter results, in addition to several big banks and tech companies.

So far, third-quarter results have generally come in above expectations. Of the S&P 500 companies that have posted results, 83% have topped analyst estimates, according to Thomson Reuters. But it's still early in the reporting period.

Spotlight on Q3 earnings: Jeff Saut, chief investment strategist with Raymond James, noted that "last year's third quarter was pretty lousy, so comparisons on a year-over-year basis are going to look pretty good."

But many companies are improving their bottom line through cost-cutting rather than material increases in performance, said Allan Boomer, investment manager at Fiduciary Management Group.

"I'm really not expecting a lot of top-line growth, but investors are positive on stocks anyway," Boomer said. "Bond yields are so low right now, and stocks are the next place investors look."

Stocks have been rising recently on speculation that the Federal Reserve will announce plans to resume large-scale purchases of U.S. Treasurys, a policy called quantitative easing, when it meets next month.
What to do with $1,000 now

Companies: Citigroup (C, Fortune 500) posted a third-quarter profit of $2.2 billion, beating analyst forecasts as the bank reduced its credit losses to their lowest level since 2007. Shares of Citigroup ended 5.6% higher.

Goldman Sachs, Morgan Stanley and Wells Fargo will also report earnings this week. The financial sector led the market lower late last week as investors worried about the fallout from investigations into the foreclosure practices of many banks and mortgage servicers.

After the closing bell, IBM (IBM, Fortune 500) posted earnings that beat analyst estimates -- but shares still fell 3% in after-hours trading after closing Monday at a new all-time high.

Net income for the quarter was $3.6 billion, up 12% from last year. The tech giant said earnings per share rose 18% from last year to $2.82 per share. Analysts polled by Thomson Reuters expected earnings to be $2.75 per share.

Apple (AAPL, Fortune 500) also reported its fiscal fourth-quarter earnings after the bell, easily beating Wall Street estimates. The company said it earned $4.64 per share on $20.3 billion in revenue.

In other company news, BP (BP) said it is selling its businesses in Venezuela and Vietnam to Russian oil producer TNK-BP for $1.8 billion. The stock closed up 2.1%.

New England utility companies Northeast Utilities (NU, Fortune 500) and NStar (NST) announced that they have agreed to merge, creating one of the nation's largest utility companies. The company will continue to be called Northeast Utilities after Northeast buys NStar for $4.3 billion in stock.

Shares of Northeast Utilities fell 0.9%, and shares of NStar fell 0.6%.

Medical device company St. Jude Medical (STJ, Fortune 500) agreed to buy AGA Medical Holdings (AGAM) for $20.80 per share in a cash-and-stock transaction valued at a total of $1.3 billion.

Shares of St. Jude Medical ended 1.8% higher, while shares of AGA Medical Holdings skyrocketed 40.7%.

Economy: Just before the bell, the government released a report on production and activity in the nation's factories. Industrial production fell 0.2% in September, countering consensus estimates from Briefing.com that predicted a 0.2% jump. Capacity utilization stayed almost flat over the month, at 74.7%.

Later in the morning, the National Association of Home Builders released a report that showed builder confidence has increased in October. That report marked the index's first improvement in five months.
Housing mess: You can't stay if you don't pay

World markets: European stocks ended slightly higher. Britain's FTSE 100 added 0.7%, Germany's DAX gained 0.5% and the CAC 40 in France increased 0.2%.

Asian markets finished in negative territory. The Hang Seng in Hong Kong tumbled 1.2%. The Shanghai Composite fell 0.5%, and the Nikkei in Japan ended a shade lower.

Commodities and currencies: The dollar was flat against the British pound and euro, but it fell versus the Japanese yen.

Gold futures for December delivery gained 10 cents to settle at $1,372.10 an ounce.

Crude oil for November delivery added $1.59 to settle at $82.84 a barrel, after slipping below $81 a barrel earlier.

Bonds: The price rose on the benchmark 10-year U.S. Treasury, pushing the yield down to 2.49%.

Image

Yahoo! Finance

4:15 pm : A big rebound by bank stocks on the back of an upbeat report from Citigroup helped drive the broader market markedly higher Monday.

Citigroup (C 4.17, +0.22) not only posted bigger-than-expected bottom line results, but also reported reduced credit provisions. That, along with a good conference call, helped overshadow a light revenue figure. The stock rallied for its best single-session percentage gain since a 7% surge in April on the strongest volume of any other stock in the S&P 500.

Strength in C helped drive buying among bank stocks, such that the KBW Bank Index bounced to a 3.0% gain after it booked a 4.5% loss last week.

Strength among bank stocks boosted the broader financial sector to a 2.3% gain, which was the best gain of any major sector.

Energy stocks handed back some of their gains just ahead of the close as Halliburton (HAL 34.09, -1.73) was hammered amid disappointment over its third quarter earnings report. However, BP (BP 41.49, +0.87) provided leadership amid news that it has agreed to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP for $1.8 billion. A 2.3% spike in crude oil prices, which settled a bit above $83.00 per barrel, also helped the sector. Energy stocks collectively advanced 0.8%.

While the broader market was able to book a strong gain and settle near its session high, retailers failed to rally. They settled the day with a collective loss of 0.5% as JC Penney (JCP 33.30, -0.57) dropped in response to a short-term stockholder rights plan that is likely intended to fight off institutional control.

Semiconductor stocks also slumped in the face of broader market strength. They shed 0.7% on the session, and hampered the Nasdaq in the process.

Treasuries also put in a strong session, but they pulled back a bit into the close. Still, the benchmark 10-year Note settled about 15 ticks higher with its yield quoted at 2.51%.

The dollar had less of an impact on trade than it has had in recent weeks. It was up 0.8% at its overnight high, but finished with a 0.1% loss. The reversal was never met with much of a response by market participants.

Data also had a little role in this session's trade. Participants were generally unmoved in news that September industrial production unexpectedly fell 0.2% and capacity utilization remained just shy of 75%. Separately, net Long-term Treasury International Capital Flow for August doubled month-over-month to $128.7 billion.

Trading volume was unimpressive again as fewer than 1 billion shares were exchanged on the NYSE. That comes after Friday's total hit 1.42 billion shares, the second highest sum since mid-July.

Advancing Sectors: Financials (+2.3%), Health Care (+0.9%), Utilities (+0.9%), Energy (+0.8%), Telecom (+0.7%), Tech (+0.5%), Consumer Staples (+0.3%), Materials (+0.3%), Industrials (+0.1%)
Declining Sectors: Consumer Discretionary (-0.2%)DJ30 +80.91 NASDAQ +11.89 NQ100 +0.3% R2K +1.0% SP400 +0.6% SP500 +8.52 NASDAQ Adv/Vol/Dec 1727/1.74 bln/893 NYSE Adv/Vol/Dec 1995/995 mln/1021

3:30 pm : Energy was the leading sector for commodities today, after it rallied for 1.3%. Nov crude oil finished higher by 2.3% to $83.08 per barrel. An ongoing strike at French refineries, coupled with a pullback in the dollar index, helped prices move higher. Nov natural gas shed 1.4% to end at $3.43 per MMBtu as forecasts for mild temps, coupled with bearish fundamentals, weighed on prices. Natural gas traded to a fresh 13 month low at $3.42 per MMBtu.

A pullback in the dollar index helped precious metals recoup overnight losses. Dec gold finished just fractionally higher at $1372.10 per ounce, while Dec silver closed up 0.8% to $24.41 per ounce. DJ30 +77.16 NASDAQ +9.05 SP500 +7.68 NASDAQ Adv/Vol/Dec 1632/1.4 bln/979 NYSE Adv/Vol/Dec 1873/688.1 mln/1120

3:00 pm : The Dow and S&P 500 have extended their recent advance so that they now stand at fresh session highs. The Nasdaq hasn't quite made it back to the levels that it registered in the early going, however.

Trading volume has been unimpressive this session. The lack of participation comes despite a strong start to earnings season.

Earnings season's latest comes with quarterly reports after the close from Apple (AAPL 315.84, +1.10) and IBM (IBM 142.69, +1.63). DJ30 +76.94 NASDAQ +7.02 SP500 +6.84 NASDAQ Adv/Vol/Dec 1619/1.27 bln/1008 NYSE Adv/Vol/Dec 1770/589 mln/1229

2:30 pm : A sudden flurry of buying has taken the stock market up to its best level of the day. The move comes without any clear catalyst, but has been rather broad in that every major sector in the S&P 500 has made an upward move during the past few minutes.

The leg higher has also taken the Nasdaq up from the neutral line. Still, semiconductor stocks remain mired in the red with a 1.1% loss. DJ30 +54.61 NASDAQ +2.35 SP500 +3.88 NASDAQ Adv/Vol/Dec 1553/1.09 bln/1041 NYSE Adv/Vol/Dec 1682/498 mln/1290

2:00 pm : Goldman Sachs (GS 153.00, +2.31) is set to post earnings tomorrow before the market opens. Analysts currently expect, on average, the firm to report third quarter earnings of $2.28 per share on revenue of about $8.89 billion.

The firm has a long history of beating expectations, but some weakness in the prior quarter has given cause for some uncertainty. Still, the stock was able to generally maintain a steady price in the $140 zone. The price chart is now working its way into a bullish upward trend ahead of the results. In turn, better-than-expected results could provide the impetus to cause shares to break out and move up through resistance near their 200-day moving average. DJ30 +54.61 NASDAQ +2.35 SP500 +3.88 NASDAQ Adv/Vol/Dec 1553/1.09 bln/1041 NYSE Adv/Vol/Dec 1682/498 mln/1290

1:30 pm : The major equity averages continue to drift along sideways, largely unchanged from earlier levels.

Retailers have come under increased pressure, though. The group is down 0.8% at the moment. Shares of retailers continue to undermine the consumer discretionary sector, which is off by 0.4%, still more than any other major sector in the S&P 500.

In contrast, financials have made their way back near session highs. The sector's 1.5% gain keeps it far in front of the broader market. DJ30 +51.13 NASDAQ -0.06 SP500 +3.26 NASDAQ Adv/Vol/Dec 1516/1.01 bln/1051 NYSE Adv/Vol/Dec 1700/465 mln/1265

1:00 pm : The broader market is up modestly amid support from financials which have rebounded from last week's slump amid Citigroup's latest.

Better-than-expected earnings and lower credit provisions from Citigroup (C 4.09, +0.14) have won strong favor for the stock, such that shares of C are atop both the list of biggest percentage gainers and most actively traded names by share volume. The absence of any real negative surprise during the company's conference call has also helped. Citi's strength has bolstered buying among bank stocks and the broader financial sector, which is up 1.4% after it fell more than 2% last week. For comparison, the S&P 500 gained close to 1% last week.

In contrast, consumer discretionary stocks have lagged all session. The sector is down 0.4% at the moment. Most of that is owed to weakness JC Penney (JCP 32.57, -1.30), which announced a short-term stockholder rights plan that has been perceived as a strategic move to fight off institutional control. Ahead of the announcement shares of JCP had climbed about 8% amid news that Pershing Square had amassed a stake of more than 16% in JC Penney.

Though the consumer discretionary sector has been week, Hasbro (HAS 47.04, +1.96) is up big on the back of its better-than-expected earnings report.

Tech stocks, down 0.1%, have generally lagged the broader market this session. Its relative weakness stems mostly from semiconductor stocks, which are collectively down 1.2%. Such weakness has caused the tech-rich Nasdaq to trail its counterparts.

Early strength in the dollar had caused stocks to drag a bit this morning. The greenback had been up as much as 0.8%, but it has since retreated to trade with a 0.1% loss. The dollar's dip hasn't brought much of a bid for the broader market, though.

Data hasn't had much of an influence on trade either. Net Long-term Treasury International Capital Flow for August doubled month-over-month to $128.7 billion. September industrial production unexpectedly fell 0.2%, but capacity utilization remained just shy of 75%. DJ30 +49.05 NASDAQ -0.16 SP500 +3.18 NASDAQ Adv/Vol/Dec 1486/928 mln/1072 NYSE Adv/Vol/Dec 1672/430 mln/1282

12:30 pm : The Nasdaq is still stuck at the neutral line, but the Dow and S&P 500 continue to trade with modest gains. Both the Dow and the S&P 500 have spent all but the first few minutes of the session in higher ground.

With the broader market sporting a steady gain, volatility has cooled a bit since earlier this morning. In turn, the Volatility Index is up just a bit more than 3%. DJ30 +44.81 NASDAQ +0.19 SP500 +2.83 NASDAQ Adv/Vol/Dec 1494/843 mln/1043 NYSE Adv/Vol/Dec 1700/393 mln/1228

12:00 pm : Better-than-expected earnings and lower credit provisions from Citigroup (C 4.12, +0.17) have made the company a leader among financial stocks, which are collectively up 1.3%. What's more, shares of C are also atop the list of biggest gainers by percent and also atop the list of most actively traded names by share volume. Despite such robust support, shares of C have yet to fully reclaim the losses that they incurred this past Thursday and Friday, which combined for a 7% loss. DJ30 +43.14 NASDAQ +0.32 SP500 +2.90 NASDAQ Adv/Vol/Dec 1400/748 mln/1102 NYSE Adv/Vol/Dec 1614/349 mln/1308

11:30 am : Stocks pulled back a bit in recent trade. That has left the major averages near or modestly above the neutral line.

Semiconductor stocks have been a drag on the tech-rich Nasdaq. Semiconductor stocks, as a group, are down 1.3%.

Treasuries are in strong shape at the moment. Specifically, the benchmark 10-year Note is up 17 ticks and the 30-year Bond is up nearly a full point. Their yields now stand at just below 2.50% and just above 3.92%, respectively. DJ30 +43.37 NASDAQ +1.20 SP500 +2.87 NASDAQ Adv/Vol/Dec 1431/660 mln/1037 NYSE Adv/Vol/Dec 1640/302 mln/1236

11:00 am : The dollar was up as much as 0.8% against a basket of competing currencies overnight. It has since reversed that move so that the Dollar Index is now flat.

The dollar's decline has helped to prop up stocks, though overall gains remain modest. Still, strength has been broad in that consumer discretionary stocks represent the only major sector to trade in the red. Consumer discretionary stocks are currently down 0.4% as a group.

Within the consumer discretionary sector, PetMed Express (PETS 15.40, -0.56) has been a primary laggard. The company posted this morning disappointing earnings for its latest quarter. DJ30 +49.46 NASDAQ +4.12 SP500 +3.85 NASDAQ Adv/Vol/Dec 1403/535 mln/1000 NYSE Adv/Vol/Dec 1707/245 mln/1138

10:30 am : A pullback in the dollar index, which is currently sitting near the unchanged line, gave a boost to select commodities this morning, including crude oil and gold.

November crude oil moved into positive territory just after 8:00am ET and spiked to new session highs of $82.41 per barrel, in recent activity. Currently, crude is 1.3.% higher at $82.29 per barrel.

November natural gas has been in the red all session. Session lows of $3.47 per MMBtu were put in overnight and after testing those new lows this morning, the energy component is 1.4% lower at $3.49 per MMBtu.

Precious metals have also been in the red all session. December gold fell to overnight lows of $1353.20 per ounce, while December silver declined to its own session low of $23.60 per ounce. Gold is now 0.3% lower at $1368.20 per ounce and silver is down 0.2% at $24.24 per ounce.
DJ30 +42.46 NASDAQ +2.84 SP500 +2.78 NASDAQ Vol/Dec 2232.8/1342 NYSE Adv/Vol/Dec 1682/206.5 mln/1127

10:00 am : The major averages have made an upward push with help from financials (+1.1%). Diversified financial services (+1.6%), diversified banks (+1.8%), regional banks (+1.7%), and specialized finance plays (+1.8%) are leaders in the sector.

Materials stocks are lagging, though. The sector is currently down 0.3% as metals plays get dropped. Namely, diversified metals and miners (-1.5%), steel (-1.0%), and aluminum (-0.9%) stocks are all out of favor. DJ30 +46.74 NASDAQ +4.32 SP500 +3.38 NASDAQ Adv/Vol/Dec 1168/195 mln/1021 NYSE Adv/Vol/Dec 1515/103 mln/1186

09:45 am : The major equity averages are mixed in the first few minutes of trade, but finanicals are making a recovery from their dramatic slide late last week.

Coming off of a weekly loss of more than 2%, financials are up 0.8% this morning. Most of that is from bank stocks, which dropped more than 4% last week, but are now up more than 1% this morning, according to the KBW Bank Index.

Volatility has climbed quickly this morning, such that the Volatility Index (VIX) is already up close to 8%. DJ30 +14.16 NASDAQ -1.60 SP500 +0.15 NASDAQ Adv/Dec 1362/1342 NYSE Adv/Dec 1373/1279

09:15 am : S&P futures vs fair value: -0.40. Nasdaq futures vs fair value: -1.00. The dollar has drifted downward from its overnight high. That has helped stock futures improve their position, such that a flat to modestly lower start to the session now looks to be in order. Citigroup (C) is the most widely held name among companies out with announcements this morning. The financial giant posted a greater profit than what had been widely expected, but its top line was a bit less than many had anticipated. Still, the stock is up close to 2% ahead of the open. Most of this morning's other corporate announcements have involved merger and acquisition activity or other strategic arrangements. Data has been limited to the August Net Long-term Treasury International Capital Flow figure, which doubled month-over-month, and industrial production and capacity utilization data for September, which were just released. Industrial production fell 0.2%, which contrasts with the consensus call for a 0.2% increase by economists polled by Briefing.com. Capacity utilization hit 74.7%, which is essentially unchanged from the prior month.

09:00 am : S&P futures vs fair value: +1.10. Nasdaq futures vs fair value: +1.80. Commodities are a bit mixed this morning. As such, the CRB Commodity Index is up just 0.1% at the moment. Oil has been a primary source of support as the continuous contract last quoted crude oil at $81.65 per barrel, up 0.5%. Natural gas prices are down a sharp 1.1% to $3.50 per MMBtu. As for precious metals, gold prices are down 0.8% to $1359.80 per ounce and silver has slid 0.9% to $24.09 per ounce. Just released, Net Long-term Treasury International Capital Flows for August totaled $128.7 billion, which is more than double the $61.2 billion that was recorded for the prior month. Stock futures have shown no real reaction to the data.

08:30 am : S&P futures vs fair value: +0.60. Nasdaq futures vs fair value: +1.80. Stock futures have further improved their position with a modest dip by the dollar, which now trades with a 0.3% gain against a basket of major foreign currencies. Germany's DAX has recovered from an early loss so that it now trades with a 0.4% gain. Deutsche Boerse and Deutsche Lufthansa have been primary leaders, but SAP and Deutsch Telekom have been laggards. France's CAC has cut its loss to trade near the flat line. Energy giant Total (TOT) has been a primary source of strength, but BNP Paribas and Carrefour have undermined its leadership. GlaxoSmithKline (GSK) and Lloyds Banking (LYG) have helped drive Britain's FTSE to a 0.3% gain after it had been down early on. Metals and mining giants Rio Tinto (RIO), BHP Billiton (BHP), Xstrata (XTA), and Anglo American are all under pressure, though. Meanwhile, BP Plc (BP) announced an agreement to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP for $1.8 billion.

Japan's Nikkei gave up an early gain to finish flat. Fast Retailing led the decline again. The stock set a new 52-week low in the process. However, Honda Motor (HMC) showed strength. Shares of the automaker remain range bound, though. According to data, Nationwide Department Store Sales fell 5.2% in September after a 3.2% declining in August. Mainland China's Shanghai Composite oscillated for most of the session. It finished with a 0.5% loss. PetroChina (PTR) and Ping An Insurance were primary sources of weakness. China Life Insurance was one of the best performers, however. Hong Kong's Hang Seng shed 1.2%. It was led lower by heavyweights HSBC (HBC), China Construction Bank, and China Mobile. Their weakness was partly offset by strength in Hutchison Whampo and Tencent Holdings, however.

08:00 am : S&P futures vs fair value: -3.50. Nasdaq futures vs fair value: -6.00. Stock futures have improved their position in the past few hours, but they continue to point to a modestly lower start amid a bounce by the dollar, which currently sports a 0.5% gain against competing currencies. Corporate headlines feature a few merger and acquisition announcements. Among them, Northeast Utilities (NU) and NSTAR (NST) have agreed to a $17.5 billion merger and St. Jude Medical (STJ) will acquire AGA Medical (AGAM) for $20.80 per share in a cash and stock transaction deal valued at about 1.3 billion. As an aside, BP (BP) announced that it has reached an agreement to sell its upstream businesses and associated interests in Venezuela and Vietnam to TNK-BP for $1.8 billion. Only a few earnings announcements have been made so far this morning. The preliminary read on Citigroup (C) is a better-than-expected bottom line on a light revenue figure. Only a light dose of data is on tap. Net Treasury International Capital Flow figures for August are due at 9:00 AM ET. Industrial production and capital utilization numbers for September follow at 9:15 AM ET.

06:53 am : S&P futures vs fair value: -0.70. Nasdaq futures vs fair value: -2.50.

06:53 am : Nikkei...9498.49...-1.80...0.00. Hang Seng...23469.38...-288.30...-1.20%.

06:53 am : FTSE...5718.34...+14.40...+0.30%. DAX...6518.89...+26.60...+0.40%.

Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Only Trading (no indicators)
Image@ http://twitter.com/wrbtrader and http://stocktwits.com/wrbtrader

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