Joined: Sat Jan 10, 2009 2:06 pm Posts: 4341 Location: Canada
Key WRB Price Action
2min Regular Session Chart - 1002am est was a long upper shadow that controlled the price action for the remainder of the trading day until the market became exhausted trying to challenge it...it was a key change in supply/demand.
After exhaustion...price action quickly headed southwards.
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.
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=51&t=200
My Trading Performance: +5.75 Emini ES points
Attachment:
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Stocks Plummet As Bond Yields Spike Major indexes give back Tuesday's gains as the yield on the 10-year note jumps to a 6-month high. General Motors looks bankruptcy bound.
By Ben Rooney, CNNMoney.com staff writer Last Updated: May 27, 2009: 5:44 PM ET
NEW YORK (CNNMoney.com) -- Stocks fell Wednesday, giving back gains from the previous session, after a sharp rise in Treasury yields added to jitters over a looming bankruptcy for General Motors.
The Dow Jones industrial average (INDU) fell 173 points, ending the day 2% lower. The S&P 500 (SPX) lost 17 points, or 1.9%. The Nasdaq composite (COMP) slid 1.1%, giving up 19 points.
Stocks had traded mixed for most of the session as concerns that GM will not be able to avoid bankruptcy overshadowed an encouraging housing report. But the selloff gained momentum in the afternoon as the yield on the benchmark 10-year bond jumped to a 6-month high.
Shares of energy producers fell even as the price of oil rose above $63 a barrel. Technology stocks, which had led gainers for most of the day, also ended lower.
Peter Cardillo, chief market economist at Avalon Partners, said the surge in the 10-year yield, along with other economic concerns, prompted many investors to cash in the previous session's gains.
"Today's economic news was somewhat mixed," he said. "It's an excuse to lighten up some positions after yesterday's rise."
Wall Street rallied Tuesday after an upbeat reading on consumer confidence revived some of the economic optimism that has lifted the market 30% from its lows in early March. But analysts say the market has settled into a range as investors look for more concrete evidence of economic growth.
"In general, we are at a point in the marketplace where it's going to take a big catalyst to get us moving upward again," said Art Hogan, chief market analyst at Jefferies & Co.
Bonds: Treasury prices fell, with the yield on the benchmark 10-year bond rising to 3.71% - it's highest since mid-November. It stood at 3.51% late Tuesday. Treasury prices and yields move in opposite directions.
Treasurys sold off shortly after the government said it received relatively healthy demand for Wednesday's $35 billion worth of 5-year notes.
Bill Larkin, a fixed-income analyst at Cabot Money Management, said many investors think strong demand for short-term U.S. debt suggests that there could be fewer buyers for longer-term bonds.
"There's an imbedded risk for longer-dated government-backed securities," he said. "That, along with signs of a strengthening economy, are two big negatives in bond land."
The increase also raised concerns that mortgage rates, which are tied to the 10-year yield, could head higher and stifle a recovery in the housing market.
Additionally, many analysts worry that the record amounts of debt coming to the market could overwhelm demand for Treasurys as the government expands already massive budget deficits.
Autos: GM (GM, Fortune 500) confirmed reports that bondholders rejected an offer from the company to trade $27 billion of debt for equity stakes, making it much more likely that GM will declare bankruptcy.
The company faces a June 1 deadline to win concessions from its union, creditors and other parties or be forced into bankruptcy by the U.S. Treasury Department, which is funding GM's operations. Shares fell 19%.
Chrysler LLC, which went into Chapter 11 bankruptcy late last month, will learn soon whether it can sell its best-performing assets to a newly formed version of itself, called Chrysler Group.
Economy: Sales of existing homes increased 2.9% in April to 4.86 million homes sold, up from a downwardly revised figure of 4.55 million in March, according to the National Association of Realtors.
April sales were slightly ahead of expectations. Analysts surveyed by Briefing.com had forecast a rate of 4.66 million units. But sales are still off 3.5% from the 4.85 million homes sold 12 months ago.
Wednesday's housing data followed a report issued Tuesday that showed the drop in home prices deepened during the first three months of the year.
Separately, a survey released Wednesday showed that business economists expect the recession to end this year. Almost three out of four survey respondents believe the recession will end by the third quarter of 2009, the report said.
Banks: The FDIC said that the number of banks on its so-called "problem bank" list jumped to 305 during the first three months of the year, up from 252 in the fourth quarter of last year. This is the highest number of troubled institutions since 1994.
Shares of Bank of America (BAC, Fortune 500) rose 1% after the company said it was "well on its way" towards raising the nearly $34 billion in capital that government regulators said it needs to buffer against future loan losses.
Companies: Monsanto (MON, Fortune 500), the world's largest seed company, said it expects 2009 fiscal-year results to be at the low end of its earnings forecast. The company said stronger-than-expected competition in the herbicides business prompted the warning. Shares fell 6%.
Office supplies retailer Staples (SPLS, Fortune 500) reported a one-third drop in quarterly profit to $147 million, or 20 cents per share, but still managed to beat analyst expectations. Excluding restructuring expenses, Staples reported earnings of 22 cents per share, one cent ahead of the analyst consensus estimate from Thomson Reuters. The stock fell 1.7%.
Other markets: Stocks in Asia soared, boosted by the overnight gains on Wall Street. European markets edged higher in midday trading.
In currency trading, the dollar rose against the euro and the yen. It slipped against the pound, with the U.K. currency rising above $1.60.
NYMEX oil for July delivery was rose $1 to settle at $63.45 a barrel. Saudi Oil Minister Ali al-Naimi said Wednesday that the global economy was capable of managing with oil as high as $75 to $80 a barrel, according to Reuters.
COMEX gold for August delivery closed at 953.30 an ounce, unchanged from Tuesday.
Yahoo! Finance
4:30 pm : A mixed batch of corporate headlines led to listless and choppy trading in the early going, but concerns that higher Treasury yields could complicate an economic recovery effort drove a flurry of selling pressure.
Downside guidance from Monsanto (MON 79.88, -5.37) and news that a $27 billion bond exchange offer from General Motors (GM 1.15, -0.29) proved unsuccessful led to some early weakness in stocks. Better-than-expected earnings and forecasts from several retailers (-2.2%) helped temper the tone, making for mixed trading in the early going.
The broader market did make a temporary move into positive territory in a knee-jerk reaction to news that existing home sales for April made a stronger-than-expected month-over-month increase. Overall sales were in-line with expectations.
Stocks moved markedly lower following an auction of 5-year government Notes carrying a 2.3% yield. Though the auction itself was solid, bid-to-cover ratio hit 2.3, mortgage origination sellers moved to hedge their positions and pressured the long-end of the yield curve. That sent the benchmark 10-year Note more than one point lower, which pushed its yield above 3.7% to a fresh 2009 high.
The higher borrowing costs associated with higher yields undermine the government's efforts to keep rates down in order to help along an economic recovery. With that, stocks went on the retreat.
Their descent stalled as the S&P 500 hit the 900 level, but sellers redoubled their efforts and pushed stocks down another leg to finish near session lows. The downturn has taken the S&P 500 back into negative territory for the year (-1.1%).
With the exception of technology, every major sector in the S&P 500 finished with a loss of at least 1%. Strength in large-cap technology holdings limited losses in the tech sector to 0.7%.
Energy stocks showed periodic strength by climbing more than 1% as oil prices reached fresh six-month highs. However, the sector faltered and finished 1.3% lower amid the broader market's sell off.
Meanwhile, crude oil prices logged multimonth closing highs by settling $63.45 per barrel, up 1.6% for the session. Oil prices remain in focus Thursday as weekly inventory data hits news wires midmorning and the latest OPEC meeting gets underway. DJ30 -173.47 NASDAQ -19.35 NQ100 -0.8% R2K -2.1% SP400 -1.8% SP500 -17.27 NASDAQ Adv/Vol/Dec 935/2.16 bln/1768 NYSE Adv/Vol/Dec 925/1.33 bln/2120
3:30 pm : Stocks are sliding to fresh session lows as participants head into the final leg of action.
Meanwhile, commodities have concluded pit trading in a generally positive fashion. As such, crude oil registered its best closing price in roughly six months by settling at $63.45 per barrel, up 1.6%.
Crude prices had oscillated in the early going, and could see further volatility tomorrow as weekly inventory data comes into play and OPEC enters its latest meeting. Preliminary reports suggest that production cuts are unlikely.
Natural gas contracts settled at $3.56 each, up 0.5% thanks to a late lift. Contracts for June delivery expired at the close of pit trade.
Gold prices finished the session flat at $953.30 per ounce. Silver prices pushed a healthy 1.8% higher to finish pit trading at $14.87 per ounce, which marks its best level since mid-August. DJ30 -161.04 NASDAQ -16.66 SP500 -15.61 NASDAQ Adv/Vol/Dec 996/1.81 bln/1693 NYSE Adv/Vol/Dec 999/929 mln/2020
3:00 pm : The major indices have pulled up from session lows, but the Dow and the S&P 500 continue to trade with sizable losses.
Meanwhile, losses in the Nasdaq Composite are modest, thanks to the relative strength of large-cap tech stocks. Large-cap tech is also helping limit losses in the Nasdaq 100, which is currently trading at the unchanged mark.DJ30 -98.20 NASDAQ -3.89 SP500 -8.29 NASDAQ Adv/Vol/Dec 1099/1.60 bln/1570 NYSE Adv/Vol/Dec 1221/816 mln/1759
2:30 pm : Stocks trade nearly recently reached session lows. Treasuries remain under pressure, with the 10-year note down 34 ticks, sending its yield up to 3.68%.DJ30 -112.62 NASDAQ -9.57 SP500 -10.14 NASDAQ Adv/Vol/Dec 1042/1.49 bln/1617 NYSE Adv/Vol/Dec 1171/756 mln/1808
2:00 pm : Stocks have gone on a sudden retreat, taking the major indices to fresh session lows. The downward move has been broad-based, leaving only the tech sector (+0.1%) in positive territory.
The S&P 500 has found some support at the 900 level, though. Still, the downward move eats into the prior sessin's advance. The S&P 500 has not logged to consecutive sessions of gains since early in the month.
Selling pressure has also intensified against Treasuries. The benchmark 10-year Note is now at a session low after shedding 31 ticks, pushing its yield to 3.67%. Much of the weakness among Treasuries is being attributed to the hedging efforts of mortgage origination sellers following relatively positive results from an auction of 5-year Notes.DJ30 -98.84 NASDAQ -4.71 SP500 -8.33 NASDAQ Adv/Vol/Dec 1091/1.35 bln/1557 NYSE Adv/Vol/Dec 1280/679 mln/1684
1:30 pm : Stocks continue to trade in choppy fashion. Treasuries have come under increased pressure following an auction of 5-year Notes with a 2.31% yield. The auction was met with a bid-to-cover ratio of 2.32.
Increased selling has taken the yield benchmark 10-year Note to its highest level of the year as it approaches 3.6%.DJ30 -23.89 NASDAQ +11.08 SP500 +0.23 NASDAQ Adv/Vol/Dec 1343/1.20 bln/1288 NYSE Adv/Vol/Dec 1609/600 mln/1388
1:05 pm : Strength in large-cap technology stocks is helping the Nasdaq outperform the other headline indices for the second straight session. Tech's strength has failed to inspire the broader market, though.
Apple (AAPL 134.32, +3.54) is a primary leader among tech issues, but semiconductors (+3.2%) are showing considerable strength as SanDisk (SNDK 15.91, +2.33) spikes in the face of lower royalty fees following renegotiations with Samsung.
Though tech is the largest sector by market weight and is currently the best performing sector in the S&P 500, both this session (+1.0%) and year-to-date (+18.3%), the broader market remains uninspired.
Energy stocks are also seeing strong gains. Their advance comes amid higher oil prices, which have rebounded 1.9% to trade near six-month highs of $63.60 per barrel.
After putting together a 4% advance in the prior session, financial stocks are trading in a quiet manner. The sector is currently up just 0.1%, but Bank of America (BAC 11.42, +0.44) is putting together a solid advance after announcing that it has raised almost $26 billion in capital since the government's bank stress tests. Bank of America still needs nearly $8 billion in additional capital to meet the government's target.
Materials stocks have been a source of leadership during recent weeks as investors looked for cyclical plays that would benefit from a rebound in economic conditions. However, the sector was dealt a blow when Monsanto (MON 80.94, -4.31) issued downside guidance. Materials stocks are down 0.1%.
Shares retailers are down 0.2%, despite solid earnings and forecasts from a handful of companies, including auto retailers and apparel and accessories companies.
Among other consumer discretionary stocks (-0.1%), General Motors' (GM 1.23, -0.21) exchange offer for some $27 billion of unsecured public notes expired late last night, which has many believing the company is moving closer to bankruptcy as its restructuring deadline draws near.
The broader market did spike higher in the early going following news that existing home sales for April were in-line with expectations, but logged a better-than-expected month-over-month increase. The advance was short lived and choppy trading has ensued. DJ30 -16.09 NASDAQ +11.78 SP500 +1.04 NASDAQ Adv/Vol/Dec 1350/1.12 bln/1276 NYSE Adv/Vol/Dec 1656/562 mln/1280
12:30 pm : Oil prices have rebounded back to a strong gain after making an earlier retreat. Crude oil contracts are currently pricing oil 1.9% higher at $63.60 per barrel, which marks a fresh six-month high.
The spike in oil prices has lifted the energy sector to a 0.9% gain. It is still off its session high, though.
Nonetheless, oil and gas refiners are making impressive gains. The group is up 4.0%. DJ30 -14.81 NASDAQ +12.85 SP500 +1.60 NASDAQ Adv/Vol/Dec 1368/998 mln/1237 NYSE Adv/Vol/Dec 1696/501 mln/1229
12:00 pm : Action has been choppy and listless since the start of the session, leading to a mixed showing by the major indices.
While the tech-rich Nasdaq Composite is still trading with a solid gain, the blue chip Dow Jones Industrial Average is trading with a fair-sized loss. The broad-based S&P 500 is up a bit.
Though action is mixed among the headline indices, semiconductors are seeing strong gains. The group is currently up 3.3% amid leadership from SanDisk (SNDK 15.89, +2.31). SanDisk's strength comes in the face of an analyst report from JPMorgan, which included lowered earnings expectations for SanDisk following the company's renegotiated royalty fees with Samsung. However, the report also suggested that the renegotiation reduces the likelihood that Samsung will resume takeover talks with SanDisk.DJ30 -8.84 NASDAQ +14.83 SP500 +2.39 NASDAQ Adv/Vol/Dec 1383/897 mln/1189 NYSE Adv/Vol/Dec 1689/441 mln/1212
11:30 am : Last week, a lowered outlook for the United Kingdom credit rating led to sizable losses in stocks and Treasuries as investors were led to question the stability the U.S. credit rating. However, Moody's has reaffirmed the Aaa credit rating of the U.S., and rated its outlook as stable, despite the government's increased debt burden. DJ30 -24.77 NASDAQ +11.73 SP500 +1.20 NASDAQ Adv/Vol/Dec 1297/773 mln/1201 NYSE Adv/Vol/Dec 1602/384 mln/1270
11:00 am : Thanks to leadership from large-cap tech issues, the technology sector has climbed to a 1.2% gain and moved into the lead as the best performing major sector in the S&P 500.
Though tech is the largest sector in the S&P 500 by market weight, it isn't providing much leadership to the broader market, which is currently chopping along the unchanged mark. However, the Nasdaq's heavy tilt toward tech is giving the index a healthy lead over the other headline indices for the second straight session.DJ30 -19.27 NASDAQ +13.06 SP500 +0.63 NASDAQ Adv/Vol/Dec 1286/619 mln/1171 NYSE Adv/Vol/Dec 1577/310 mln/1264
10:30 am : Stocks are gyrating as they look for direction in the early going. Meanwhile, commodity prices have pulled back a bit from session highs. As such, the CRB Commodity Index is currently up 0.1% after trading with a 0.4% gain.
A more noticeable pullback has been made by crude oil prices, which now trade flat at $62.45 per barrel after trading above $63 per barrel earlier in the session. Crude prices hit a six-month high of $63.45 per barrel in electronic trading overnight.
The moves by oil prices come amid the latest OPEC meeting, which is scheduled to conclude tomorrow. According to reports, a production cut remains unlikely. Though weekly crude oil inventory data is typically released on Wednesdays, data for the most recent week will be released tomorrow since this is a shortened week.
Natural gas prices are down this morning. Contracts are being priced at $3.46 each, off by 2.3%. Contracts for June delivery expire at the close of pit trade.
Precious metals are having a lackluster session as gold prices trade at the unchanged mark, currently $953.30 per ounce, and silver trades flat at $14.62 per ounce.
The Baltic Dry Index extended its recent gains by advancing 7.5% to its best levels of the year. The latest move was led by a spike in the Capesize Index, which surged 10.7%. The Panamax gained 10.3%, but the Supramax and Handysize both slipped 0.3%. DJ30 -18.79 NASDAQ +9.45 SP500 -0.25 NASDAQ Adv/Vol/Dec 1218/466 mln/1177 NYSE Adv/Vol/Dec 1437/242 mln/1334
10:00 am : Existing home sales for April came in at an annualized rate of 4.7 million, which is in-line with expectations. The April rate was up modestly from the rate of 4.6 million for the prior month.
In turn, existing home sales increased 2.9% month-over-month, which is better than the 2.0% monthly increase that was expected. Home sales had slipped 3.4% month-over-month in the previous reading.
Meanwhile the House Price Index for March decreased 1.1% month-over-month. It was expected to increase 0.2% month-over-month. The House Price Index for February was revised lower to reflect a 0.2% monthly increase.
Home sales and prices have been pressured in recent months by rising unemployment, despite efforts to keep mortgage rates down and tax incentives attractive. However, the better-than-expected month-over-month increase in sales has induced some knee-jerk buying in the broader market.
09:40 am : Stocks are chopping along in negative territory during the first few minutes of trading. However, solid gains are being made by the energy sector, which is up 0.9% with help from a 1.1% rebound in crude oil prices. Crude is currently trading at $63.15 per barrel, down a bit from its overnight high of $63.45 per barrel, which marked a six-month high for the commodity.
Energy is currently the only major sector to sport a gain. Materials stocks are seeing the stiffest selling pressure; the sector is down 1.0%.
The downturn among materials stocks comes as fertilizer and agricultural chemicals stocks drop 3.5% following downside guidance from Monsanto (MON 81.94, -3.31).DJ30 -34.09 NASDAQ -8.76 SP500 -0.91 NASDAQ Adv/Vol/Dec 742/112 mln/1394 NYSE Adv/Vol/Dec 1032/80 mln/1560
09:20 am : S&P futures vs fair value: -0.80. Nasdaq futures vs fair value: -5.80. Stocks look as if they will begin the session flat following downside guidance from Monsanto (MON), upside guidance from Cree (CREE), a batch of earnings and forecasts from several retailers, and news that General Motors (GM) is likely moving closer toward bankruptcy. Meanwhile, Bank of America (BAC) has won some support for bank stocks ahead of the opening bell by announcing that it has raised almost $26 billion in capital since the government announced the results of its bank stress tests. Bank of America's efforts thus far have included a $13.5 billion common stock offering last week, and the partial sale of its China Construction Bank holding. Bank of America still needs to raise more capital in order to achieve the $33.9 billion capital buffer that the Fed deemed sufficient, though. Existing home sales for April are due at 10:00 AM ET.
09:00 am : S&P futures vs fair value: -0.80. Nasdaq futures vs fair value: -5.30. Corporate headlines have picked up in the last hour. Monsanto (MON) this morning that it expects third quarter earnings to come in at $1.15 per share, which is well short of the $1.58 per share that Wall Street had forecast. As for fiscal 2009, Monsanto expects earnings to total $4.40 per share, which misses the $4.61 per share that analysts have projected. Shares of MON have reacted to the announcement by falling more than 4% to $81.69 per share ahead of the opening bell. Cree (CREE) also gave investors a forecast, though the announcement was made last evening. The company expects adjusted earnings for its fourth fiscal quarter to range from $0.15 to $0.17 per share, which tops the $0.14 per share that analysts have forecast. Shares of CREE are up nearly 10% to $30.50 per share ahead of the opening bell. Meanwhile, discount retailer Dollar Tree (DLTR) generated first quarter earnings of $0.66 per share, which topped the $0.60 per share that was widely expected. Dollar Tree indicated that it expects second quarter earnings to range from $0.47 to $0.51 per share, which exceeds the $0.46 per share that has been forecast. As for fiscal 2010, the company expects earnings to range from $2.76 to $2.90 per share, which brackets the consensus forecast of $2.85 per share. Shares of DLTR are up less than 1% in premarket trading. American Eagle Outfitters (AEO) reported first quarter earnings of $0.08 per share, which topped the $0.07 per share that was widely expected. As for the second quarter, the company expects adjusted earnings to range from $0.12 to $0.15 per share, which meets the $0.15 per share consensus estimate. Shares of AEO are down 2.6% to $14.10 per share ahead of the opening bell. Autoparts retailer AutoZone (AZO) announced earnings of $3.13 per share for its fiscal third quarter. The results topped the consensus estimate of $2.89 per share with ease. The company's stock was recently quoted 2.2% lower at $159.23 per share in premarket action. Polo Ralph Lauren (RL) generated fourth quarter earnings of $0.44 per share, which exceeded the $0.40 per share that analysts had come to expect. The company is not providing an annual earnings per share guidance. Shares of the company are up more than 1% to $55.10 per share ahead of the opening bell. Meanwhile, broader market stock futures still point to a flat start for the major indices.
08:30 am : S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: -5.00. European stocks are trading in mixed fashion following the prior session's rally. Germany's DAX is down a modest 0.2% amid leadership from Daimler AG (DAI). Though Daimler is trading with strength, Volkswagen is a primary laggard. In Britain, the FTSE is down 0.3%, thanks largely to strength in global banking outfit HSBC (HBC). Royal Dutch Shell (RDS.A) is showing weakness amid reports that the company will launch a major restructuring to cut costs and improve performance. Effective July 1, the company will merge its exploration and production unit, its gas and power unit, and its oil sands unit into two new divisions. Meanwhile, France's CAC is up by 0.2%, its advancing issues outnumber its decliners by 3-to-2. BNP Paribas is a primary leader, while Total (TOT) is a primary laggard. Asian markets saw robust gains after U.S. indices rallied Tuesday on better-than-expected consumer confidence data. Japan's Nikkei climbed 1.4% with help from Fast Retailing and Tokyo Electronics. Hong Kong's Hang Seng spiked 5.3% with leadership from banking issues like HSBC, Bank of China and China Construction Bank.
08:00 am : S&P futures vs fair value: -0.70. Nasdaq futures vs fair value: -4.80. Stock futures indicate a flat start is in order for the major indices. Overall news flow remains a bit slow. However, The Wall Street Journal reported that General Motors (GM) and the United Auto Workers union agreed to a new restructuring plan that would give the union a significantly smaller stake in GM than previously envisioned, while the government would end up owning as much as 70% of GM. The report comes amid news that GM's exchange offer for some $27 billion of unsecured public notes expired late last night. Shares of GM are down 20% to $1.15 per share in premarket trading.
06:16 am : S&P futures vs fair value: +4.50. Nasdaq futures vs fair value: +1.80.
06:16 am : Nikkei...9438.77...+128.00...+1.40%. Hang Seng...17885.27...+893.70...+5.30%.
06:16 am : FTSE...4420.61...+8.90...+0.20%. DAX...5011.72...+26.10...+0.50%.
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