TheStrategyLab.com Price Action Trading Support Forum

Trade Results of M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)

click on the above image to view today's trading summary


Trade Performance for Today: +2.00 points or $200.00 dollars in the Russell 2000 Emini TF ($TF_F) Futures.
Russell 2000 Emini TF Futures - 1 tick or 0.10 = $10.00 dollars and there's more contract information @ The ICE.
S&P 500 Emini ES Futures - 1 tick or 0.25 = $12.50 dollars and there's more contract information @ CMEGroup.

In addition, today's #FuturesTrades trading chat room logs provides details about each trade from entry to exit along with commentary as the trade traversed...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=88&t=804.

Also, posted below are direct links to information about my trade methodology and trading plan (there's a difference between the two) 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/bar analysis).

WRB Analysis Tutorials @ http://www.thestrategylab.com/WRBAnalysisTutorials.htm and there's a free study guide of the WRB Analysis Tutorial Chapters 1, 2 and 3 @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=5&t=180.

Volatility Trading Report (VTR) @ http://www.thestrategylab.com/VolatilityTrading.htm and there's a free trade signal strategy @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=89 so that you can freely test drive one of our trade strategies with support prior to purchasing the Volatility Trading Report (VTR).

Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=137&t=1015

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Market Summaries

The below summaries by Bloomberg, CNNMoney and Yahoo! Finance helps me to do a quick review of the fundamentals, FED actions, global economics that had an impact on today's price action. Simply, I'm a strong believer that many variables causes key changes in supply/demand and volatility that's arguably just as important as my technical analysis.

CNNMoney.com - Stocks End Flat After Fed Minutes

click on the above image to view today's price action of key markets

By Ben Rooney, staff reporter
April 5, 2011: 4:48 PM ET

NEW YORK (CNNMoney) -- U.S. stocks ended little changed Tuesday, as investors weighed hawkish meeting minutes from the Federal Reserve.

The Dow Jones industrial average (INDU) fell 6 points, or less than 0.1%, to close at 12,394. The S&P 500 (SPX) slipped less than 1 point to 1,332; the Nasdaq Composite (COMP) edged up 2 points to 2,791.

Stocks were supported by gains in semiconductor companies after Texas Instruments (TI) announced a $6.5 billion bid for rival National Semiconductor (NSM). Shares of National Semiconductor surged 72%.

But the market came under pressure after meeting minutes from the Federal Reserve raised speculation that the U.S. central bank could raise rates later this year amid rising inflation.

"A few participants indicated that economic conditions might warrant a move toward less-accommodative monetary policy this year," read the minutes -- that's Fed-speak for raising interest rates or selling assets to try to curb inflation.

Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams, said the minutes showed that some Fed officials are "starting to get a little hawkish."

The minutes confirmed that the Fed will wind down its asset buying program in June, as expected, and fueled speculation that it will hike interest later this year, Rovelli added.

"If commodity prices dip, then they'll be forced to start tightening," he said. "And when they do that, its bad for the market, even though rates are still low."

Meanwhile, investors were also spooked by a surprise interest rate hike by The People's Bank of China and another downgrade of Portugal's sovereign debt.

Looking ahead, many investors are expecting the European Central Bank to announce plans to increase interest rates on Thursday.

* Stocks in 2011: A bumpy road higher

Stocks closed little changed Monday, as as investors took a wait-and-see approach about the economy.

Companies: Nasdaq OMX Group announced Tuesday it will rebalance its tech-heavy Nasdaq-100 index, reducing Apple's weight by almost 40% -- to 12.3% from 20.5%. The change takes effect on May 2.

The change will lend more weight to Google (GOOG, Fortune 500), Intel (INTC, Fortune 500), Microsoft (MSFT, Fortune 500) and Oracle (ORCL, Fortune 500). Apple shares were down about 0.7%

"Those investors who've got a portfolio tracking that index will need to sell Apple shares to rebalance their portfolio," said James Cordwell, digital equity analyst with Atlantic Equities in London. "Investors would have to shift from Apple to Oracle and Microsoft."

The Nasdaq -100 includes the 100 largest non financial companies listed on the Nasdaq exchange -- not to be confused with the Nasdaq Composite, which includes all of the roughly 3,000 companies listed on the exchange.

KB Home (KBH) shares fell 4%, after the homebuilder announced a quarterly loss of $114.5 million or $1.49 a share. That's far deeper than the loss analysts were expecting.

Shares of Expedia (EXPE) rose 1.3%, after American Airlines announced the two companies will resume doing business together after reaching an agreement on airfare sales.

Diamond Foods, Inc (DMND) and Procter & Gamble Company (PG, Fortune 500) announced plans to merge P&G's Pringles chips business under Diamond Foods. Shares of Diamond Foods surged nearly 7%, after the $2.35 billion deal was announced.

Economy: A report from the Institute for Supply Management showed that activity in the service-sector eased slightly last month. The ISM non-manufacturing index fell to 57.3 in March from 59.7 in February.

Economists are looking for the index to slip slightly to 59.5, compared with last month's reading of 59.7 -- a level that would still indicate expansion in the sector.

World markets: European stocks ended slightly lower. The FTSE 100 in London fell 0.1%, while the DAX in Germany and France's CAC 40 were flat.

Japan's Nikkei ended 1% lower. Markets in Shanghai and Hong Kong were both closed for a holiday.

* Video - PIMCO chief: Europe debt in 'crisis'

Currencies and commodities: The dollar rose against the euro and the Japanese yen, but fell against the British pound.

Crude oil for May delivery slipped 13 cents to $108.34 a barrel.

Gold futures for June delivery surged $21.60 to another record high of$1,450.01 an ounce in non-inflation adjusted terms.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.41% from 3.43% late Monday.



Yahoo! Finance - Market Update

4:30 pm : Stocks overcame some choppy trade in the early going to stage a nice advance, but the move eventually lost momentum, leaving the major averages to roll over.

Stocks followed up lackluster action in the prior session with a relatively flat start today. Overseas markets failed to provide a lift as most of the major global averages moved lower following China's 25-basis point rate increase and the latest round of ISM Services readings from Europe. As for domestic data, the ISM Services Index for March came in at 57.3, which is not only down from the 59.7 that had been recorded for the prior month, but it is less than the 59.5 that had been expected among many economists polled by Briefing.com.

Despite mixed interest in the early going, buying interest gradually increased as the session progressed. The buying effort took the Dow to a new 52-week high, but the S&P 500 only came within a few points of its 52-week high.

Tech stocks had been a key source of broad market strength following news that Texas Instruments (TXN 34.69, +0.58) will acquire National Semiconductor (NSM 24.06, +9.99) for $6.5 billion, or $25 per share. The takeover price represents a premium of almost 80% above NSM's prior session closing price.

Interest among tech issues even helped Apple (AAPL 338.89, -2.30) recover from an opening drop that came in response to news that its weight in the Nasdaq 100 will be reduced to about 12% from 20% with the rebalancing of the Index.

Broad market strength began to fade a bit in afternoon trade, and some knee-jerk selling followed the release of minutes from the most recent FOMC meeting.

According to the minutes, a few members noted that evidence of a stronger recovery, or of higher inflation or rising inflation expectations, could make it appropriate to reduce the pace or overall size of the asset purchase program while several others indicated that they did not anticipate making adjustments to the program before its intended completion. Voting members also noted anticipation that recent increases in the prices of energy and other commodities will result in only a transitory increase in headline inflation.

Investor interest in basic commodities and materials plays helped the materials sector remain propped up while the rest of the market drifted lower in afternoon trade. In turn, materials stocks settled with a collective gain of 1.1% while the major equity averages settled mixed.

Advancing Sectors: Materials (+1.1%), Consumer Discretionary (+0.4%), Energy (+0.3%), Consumer Staples (+0.1%)
Declining Sectors: Tech (-0.1%), Financial (-0.1%), Utilities (-0.3%), Industrials (-0.4%), Health Care (-0.5%), Telecom (-0.7%)DJ30 -6.13 NASDAQ +2.00 NQ100 -0.3% R2K +0.5% SP400 +0.4% SP500 -0.24 NASDAQ Adv/Vol/Dec 1328/1.96 bln/1270 NYSE Adv/Vol/Dec 1629/829 mln/1312

3:35 pm : Commodities finished mixed today, with a slightly positive bias. Precious metals led all gainers after posting a 1.6% move to the upside. May silver futures rallied for 1.9% to close at $39.18 per ounce while June gold surged 1.4% to close at $1451.80 per ounce. Silver traded to a fresh ~31 yr high heading into the close of pit trade, while gold put in a new all-time high at $1455.50 per ounce. Both metals rallied on a flight to safety following Portugal's downgrade at Moody's and the rate hike in China.

It was another uneventful session for May crude oil, which shed 0.1% to settle at $108.34 per barrel. May natural gas shed 1.2% to close at $4.23 per MMBtu after it sold off heading into the close of pit trade. DJ30 -0.94 NASDAQ +0.65 SP500 +0.03 NASDAQ Adv/Vol/Dec 1303/1.6 bln/1282 NYSE Adv/Vol/Dec 1660/453.6 mln/1276

3:00 pm : Tech stocks have rolled over in recent trade. That has undercut the Nasdaq, which is now at its lowest level since the first hour of the session. As for tech stocks, they are up with a gain of less than 0.2% after finding support at the flat line.

Even though stocks have encountered selling pressure, Treasuries have failed to secure support. Instead, they have extended their downturn to new session lows. That has the yield on the benchmark 10-year Note flirting with 3.50%. DJ30 +16.61 NASDAQ +6.50 SP500 +2.13 NASDAQ Adv/Vol/Dec 1398/1.42 bln/1193 NYSE Adv/Vol/Dec 1714/515 mln/1192

2:30 pm : Minutes from the FOMC's most recent meeting were released about 30 minutes ago. Some knee-jerk selling ensued, but stocks have since stabilized.

Among the key takeaways from the FOMC meeting, voting members anticipated that recent increases in the prices of energy and other commodities would result in only a transitory increase in headline inflation, but longer-term inflation expectations remain stable and measures of underlying inflation subdued.

A few members noted that evidence of a stronger recovery, or of higher inflation or rising inflation expectations, could make it appropriate to reduce the pace or overall size of the purchase program. Several others indicated that they did not anticipate making adjustments to the program before its intended completion. DJ30 +30.09 NASDAQ +11.16 SP500 +3.66 NASDAQ Adv/Vol/Dec 1444/1.31 bln/1132 NYSE Adv/Vol/Dec 1791/350 mln/1094

2:00 pm : Minutes from the most recent FOMC meeting are due at any moment.

In the meantime, stocks continue to sit near session highs, but Treasuries are at their worst levels of the day. Treasuries are near support levels that have been in place for the past couple of weeks.

Selling among Treasuries has been rather broad, but the benchmark 10-year Note has been leading the way lower. Its sell-off has pushed its yield more than five basis points higher to nearly 3.48%. However, the belly of the yield curve is seeing the biggest rise as the 7-year Note's yield is up in excess of six basis points. The spread between the 10-year and 30-year yields is tighter today at 103. DJ30 +30.58 NASDAQ +14.22 SP500 +3.99 NASDAQ Adv/Vol/Dec 1520/1.19 bln/1028 NYSE Adv/Vol/Dec 1832/310 mln/1024

1:30 pm : Stocks recently stretched to session highs, but overall gains remain rather modest.

Retailers are having an impressive session, however. As such, the SPDR S&P Retail ETF (XRT 52.19, +1.31) is up about 2.5%. Among individual retailers, TJX Co (TJX 50.99, +1.39) is up almost 3% following the firm's decision to raise its dividend by almost 30% to $0.19 per share. DJ30 +33.04 NASDAQ +15.04 SP500 +4.35 NASDAQ Adv/Vol/Dec 1552/1.11 bln/989 NYSE Adv/Vol/Dec 1887/280 mln/943

1:05 pm : Stocks are up with varied gains at midday while participants await the minutes from the latest FOMC meeting.

Trade was choppy in the early going. A disappointing ISM Services Index reading of 57.3 for March failed to provide any additional direction.

However, renewed strength in the tech sector, which lagged in the prior session, has helped bring buyers back into the fold. The sector's strength stems largely from news that Texas Instruments (TXN 34.83, +0.72) will acquire National Semiconductor (NSM 24.13, +10.06) for $6.5 billion, or $25 per share, which makes for a premium of almost 80% above NSM's prior session closing price. However, the buzz about the takeover has been somewhat diluted by news that the rebalancing of the Nasdaq 100 will cut the weight of Apple (AAPL 341.18, -0.01) in the Index to about 12% from 20%. Shares of AAPL have steadily recovered from their opening drop.

Although the tech sector's weight has made it a leader today, materials stocks are out in front of the overall market for the second straight session. The group's 1.4% gain has been led by metals and mining plays again.

A generally positive tone has the stock market just a few points below its 52-week high. The hesitation ahead of that point comes as participants await minutes from the latest FOMC meeting (2:00 PM ET). DJ30 +29.82 NASDAQ +15.08 SP500 +4.50 NASDAQ Adv/Vol/Dec 1534/1.03 bln/991 NYSE Adv/Vol/Dec 1865/250 mln/946

12:30 pm : The stock market has run into a little resistance in recent trade. That that has kept the S&P 500 a few points shy of its 52-week high near 1340.

Although the broad market continues to trade with a positive bias, KB Home (KBH 11.77, -0.43) has been hit hard in response to its latest quarterly report. Other homebuilders are mixed in the wake of that report. For instance, Lennar (LEN 18.49, +0.42) is up more than 2%, but Hovanian Enterprises (HOV 3.34, -0.04) is down more than 1%. DJ30 +20.85 NASDAQ +12.70 SP500 +3.46 NASDAQ Adv/Vol/Dec 1450/920 mln/1064 NYSE Adv/Vol/Dec 1816/216 mln/948

12:00 pm : Buying efforts have picked up so that all three of the major equity averages are now at fresh session highs. Natural resource plays have been paving the way.

Energy stocks have extended their recent climb to a 0.6% gain, but even more impressive is the 1.2% gain that is now sported by the materials sector. Materials stocks are currently led by metals and mining plays like Newmont Mining (NEM 56.65, +2.04) for the second straight session. Materials plays had outperformed in the prior session, but the lack of weight in the sector undermined its leadership capability. DJ30 +33.76 NASDAQ +13.72 SP500 +4.76 NASDAQ Adv/Vol/Dec 1338/820 mln/1148 NYSE Adv/Vol/Dec 1674/185 mln/1026

11:35 am : Stocks slipped in recent trade, but they have successfully recovered gains. The effort has taken the Nasdaq to a fractionally improved session high. It continues to be supported by tech issues, which are collectively up 0.5%.

Energy stocks have attracted renewed buying interest in recent trade. In turn, the sector is now up 0.4% to a fresh session high of its own. The move comes as oil prices trade near the flat line at $108.45 per barrel. DJ30 +17.64 NASDAQ +11.36 SP500 +3.14 NASDAQ Adv/Vol/Dec 1288/730 mln/1191 NYSE Adv/Vol/Dec 1570/142 mln/1091

11:00 am : The broad market recently pushed into positive territory, but is starting to give back that gain. The move has been generally broad-based, but consumer discretionary stocks have benefitted the most--they are up 0.5%.

Meanwhile, Treasuries climbed off their worst levels of the session following the weaker-than-expected ISM services reading. The number printed 57.3 versus the Briefing.com consensus estimate of 59.5 and showed its prices paid number decline from 73.3 to 72.1. After being rejected by its 50-day moving average near 3.465%, the 10-yr yield has eased to 3.435%. The yield curve has flattened on the data release with the 2-10-yr spread testing important support near 264, and the 10-30-yr spread hovering just above 104 support.DJ30 +6.13 NASDAQ +10.32 SP500 +1.79 NASDAQ Adv/Vol/Dec 1178/557.5 mln/1227 NYSE Adv/Vol/Dec 1427/92.18 mln/1117

10:35 am : The dollar index continues to show some strength this morning, which is pressuring select commodities.

May crude oil has been in negative territory all session and hit session lows of $107.50/barrel around 7:00am EST. In current trade, the energy component is down 0.3% at $108.15/barrel.

May natural gas was in the red this morning ahead of pit trading, but when the pits opened, natural gas pushed into positive territory and to new session highs of $4.32. Its currently just above the unchanged line at $2.27/MMBtu.

Precious metals are higher this morning with June gold up 0.4% at $1439.40/ounce and May silver is up 0.4% at $38.66/ounce.DJ30 +7.42 NASDAQ +8.12 SP500 +1.61 NASDAQ Adv/Vol/Dec 946/388.4 mln/1417 NYSE Adv/Vol/Dec 957/42.1 mln/1332

10:05 am : A flurry of selling in response to the latest ISM Services Index recently took stocks a leg lower, but the major equity averages have been quick to bounce back. Overall trade remains listless, though.

The ISM Services Index for came in at 57.3. Not only is that down from the 59.7 that had been recorded for the prior month, but it is less than the 59.5 that had been broadly expected among economists polled by Briefing.com. DJ30 -39.28 NASDAQ -0.82 SP500 -1.97

09:45 am : Stocks are chopping along without much direction in the first few minutes of trade. Tech, which lagged in the prior session, has gotten an early bid that has lifted the sector to a modest gain of 0.3%. Most of that is owed to strength in the semiconductor space.

Telecom has turned lower. It was one of last week's best performing sectors, but today the telecom space is down 0.5%.

Coming up in just a few minutes is the latest ISM Services Index (10:00 AM ET). DJ30 -16.80 NASDAQ +1.63 SP500 -1.31

09:15 am : S&P futures vs fair value: -3.30. Nasdaq futures vs fair value: -5.00. Stock futures point to a slightly lower start for the session. The relatively weak tone comes in the face of news that Texas Instruments (TXN) will acquire National Semiconductor (NSM) for $25 per share -- a premium of almost 80% above NSM's prior session closing price. Although the semiconductor space has been helped by news of that deal, the broader tech sector hasn't exactly been abuzz with takeover speculation. Instead, many are digesting the implications of a rebalancing of the Nasdaq 100, which is home to a fleet of large-cap tech issues, including Apple (AAPL), which will have its weight in the Index clipped to 12% from about 20%. There haven't been many other corporate news items, especially of any major consequence. Also, a fit of weakness among overseas markets has diluted premarket buying interest. Losses abroad come amid news that Moody's followed the other rating agencies by downgrading the debt of Portugal. China also hiked its one-year lending and borrowing rate by another 25 basis points. No domestic data were released yesterday, but participants get their hands on the latest ISM Services Index at 10:00 AM ET, then the minutes from the latest FOMC meeting at 2:00 PM ET.

09:05 am : S&P futures vs fair value: -3.90. Nasdaq futures vs fair value: -6.00. Oil prices made a late move in the prior session to score their best settling price in more than two years, but the energy component has been clipped a bit this morning. It now trades with a $0.40 loss at $108.07 per barrel in early pit trade. Gold prices have made a narrow gain, though; the yellow metal was last quoted at $1436.70 per ounce, up $3.70. Meanwhile, silver prices are flat at $38.47 per ounce.

08:35 am : S&P futures vs fair value: -4.30. Nasdaq futures vs fair value: -8.00. Germany's DAX is down 0.3% at the moment. France's CAC has been cut down to a 0.5% loss. Britain's FTSE is off by 0.3%. The latest data indicate that Germany's final PMI Services reading for March came in at 60.1, unchanged from the preliminary reading. France's final PMI Services reading slipped to 60.4 from 60.7 in the preliminary reading. The United Kingdom's PMI Services reading for March improved to 57.1 from 52.6 in February. Meanwhile, the final PMI Services reading for the broader eurozone improved to 57.2 from 56.9 in the preliminary reading. Eurozone retail sales for February were also reported; they slipped 0.1% after a downwardly revised 0.2% increase in the prior month. In other news, Moody's followed the lead of other rating agencies by implementing a downgrade on Portugal's debt to Baa1 from A3.

Holiday in Asia kept Hong Kong's Hang Seng and China's Shanghai Composite closed, but China's central bank still announced another 25-basis point hike to its one-year deposit and lending rate. Japan's Nikkei was knocked to a 1.1% loss in its latest round of trade. Weakness was widespread, but Tokyo Electric Power plummeted again. Its loss of almost 20% was by far the worst of any issue in the Nikkei. Japan Tobacco and Tokai Carbon were a couple of top performers that managed to put together solid gains, though.

08:05 am : S&P futures vs fair value: -3.10. Nasdaq futures vs fair value: -6.30. Listless trade left stocks to hug the neutral line yesterday. Semiconductor plays were actually a drag on action, but the space has been revived by news that Texas Instruments (TXN) will pay about $6.5 billion, or $25 per share in cash, for National Semiconductor (NSM), which barely closed above $14 per share in the prior session. Even though that news would seemingly lend support to the rest of the tech space, there has been some push back in response to news that a rebalancing of the Nasdaq 100 will reduce the weight of Apple (AAPL) to about 12% from about 20%. Overseas action has failed to offer any kind of support. Generally, Europe's major bourses are all down despite some generally solid PMI Services readings. Moody's did issue a downgrade on Portugal's debt, though. As for action in Asia, Japan's Nikkei fell more than 1% while other major Asian averages remained closed for holiday observance. China's central bank announced its plan for another 25-basis point hike to its deposit rates. With the overall mood among morning participants still uninspired, stock futures continue to sit below fair value. Still on today's docket, the latest ISM Services Index is due at 10:00 AM ET and the minutes from the latest FOMC meeting will be posted at 2:00 PM ET.

06:28 am : [BRIEFING.COM] S&P futures vs fair value: -5.00. Nasdaq futures vs fair value: -12.80.

06:28 am : Nikkei...9615.55...-103.30...-1.10%. Hang Seng...Holiday.........

06:28 am : FTSE...5991.90...-25.10...-0.40%. DAX...7149.03...-26.30...-0.40%.

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

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

Phone: +1.708.572.4885
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