After Midnight
Toni Hansen is a Market Analyst and Trader with http://www.tonihansen.com.
February 7, 2012
Market Struggles Between Support and Resistance Zones Intraday
Monday was a slow day on Wall Street. And by "slow", I mean one of the slowest non-holiday trading days we've seen in about a decade. The market put in a strong performance on Friday after a favorable reaction to last month's employment data. The U.S. economy added 243,000 new positions in January, while the unemployment rate dropped to 8.3%. The data surge put the indices squarely at resistance by rapidly establishing an equal move compared to Wednesday's morning rally.
By 10:15 a.m. ET most of the gains for the day were already established and the market began to struggle. Even though the indices finished the week at highs, trading in the second half of the morning and the entire afternoon on Friday shifted the momentum of the morning rally and created an exhaustion pattern heading into the weekend.
The index futures opened lower Sunday evening with Greece once again holding the headlining position. The country once again failed to meet a deadline to negotiate its debt. The news, however, was unsurprising and the pullback into the new week was more likely a technical measure than one driven by this "revelation".
The breakdown into Sunday evening was mirrored in early trade Monday morning before the indices finally struck stronger support at 4:00 a.m. ET. Two-wave corrections are common in the market and the second move brought the futures into a 50% retracement zone as the market took back half the gains from Friday's employment run. After striking support, however, the market lacked direction and floundered along throughout most of the session.
Although the predominant intraday trend was higher, the move was marked by choppy trade and a lack of decent reward to risk ratios in index-centered strategies. The market was also short on strong intraday movers in individual stocks for those that did pull away from index trading alone.
The forex market offered more to market participants throughout the morning than the indices overall and was one of the best outlets for intraday traders for the day, but forex action died down after 13:00 ET.
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> The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 17.10 points, or 0.13%, and closed at 12,845.13. Eleven of the Dow's thirty index components posted a gain. The top performers were Bank of America (BAC) (+1.66%), Procter & Gamble (PG) (+1.18%), and Disney (DIS) (+1.15%). The weakest performers were Travelers (TRV) (-1.31%), Pfizer (PFE) (-1.18%), and Boeing (BA) (-1.15%).
The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 17.10 points, or 0.13%, and closed at 12,845.13. Eleven of the Dow's thirty index components posted a gain. The top performers were Bank of America (BAC) (+1.66%), Procter & Gamble (PG) (+1.18%), and Disney (DIS) (+1.15%). The weakest performers were Travelers (TRV) (-1.31%), Pfizer (PFE) (-1.18%), and Boeing (BA) (-1.15%).
The S&P 500 ($SPX) finished the session with a loss of 0.57 points, or 0.04%, and closed at 1,344.33. The only two industry groups to post gains were energy (+1.1%) and telecoms (+0.3%). The top individual percentage performers in the index were Abercrombie & Fitch (ANF) (+9.48%), Sprint Nextel (S) (+6.03%), and Best Buy (BBY) (+3.39%). The weakest industry groups were financials (-0.5%) and materials (-0.5%). The top individual decliners were Medco Health Solutions (MHS) (-8.08%), Humana (HUM) (-5.40%), and Express Scripts (ESRX) (-4.65%). MHS and ESRX shares fell on a report that the Federal Trade Commission could be gathering evidence to prevent Express Scripts' planned purchase of Medco Health. Humana's (HUM) earnings were in line with estimates, but revenue fell short of expectations.
The Nasdaq Composite ($COMPX) ended the session lower by 3.67 points, or 0.13%, on Monday and it closed at 2,901.99. The strongest performers in the Nasdaq-100 ($NDX) were Green Mountain Coffee Roasters (GMCR) (+4.24%), Vertex Pharmaceuticals (VRTX) (+4.00%), and First Solar (FSLR) (+2.97%). The weakest were Express Scripts (ESRX) (-4.65%), Micron Tech. (MU) (-2.89%), and Expeditors Intl. (EXPD) (-2.45%).
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> As we head into Tuesday, the market is still failing to develop a larger daily reversal pattern despite the upside extension. We'll need more than a two-wave correction on the 15 minute time frame and a break in the 20 day moving averages to confirm. So far the Nasdaq has held its 10-day moving average since December and the S&P 500 and Dow have only broken their 10-day moving averages once. New swingtrades (multi-day strategies) will again be higher risk to initiate than daytrades at this time.
This week is not a particularly busy one for economic data, but some names to watch for earnings on Tuesday will be Coca-Cola (KO), BP (BP), Hartford Financial (HAR), Disney (DIS), and Panera Bread (PNRA).
Key Domestic Economic Data This Week:
Feb 7
3:00 PM Consumer Credit Dec
Feb 8
7:00 AM MBA Mortgage Index 02/04
10:30 AM Crude Inventories 02/04
Feb 9
8:30 AM Initial Claims 02/04
8:30 AM Continuing Claims 01/28
10:00 AM Wholesale Inventories Dec
Feb 10
8:30 AM Trade Balance Dec
9:55 AM Mich Sentiment Feb
2:00 PM Treasury Budget Jan
Key Foreign Economic Data This Week:
Feb 05
18:30 AUD TD Securities Inflation (JAN)
19:30 AUD Retail Sales Ex Inflation (4Q)
19:30 AUD Retail Sales s.a. (DEC)
Feb 06
JPY Machine Tool Orders (JAN P)
04:30 EUR Euro-Zone Sentix Investor Confidence (FEB)
06:00 EUR German Factory Orders s.a. (DEC)
10:00 CAD Ivey Purchasing Managers Index s.a. (JAN)
16:45 NZD Average Hourly Earnings (4Q)
17:30 AUD AiG Performance of Construction Index (JAN)
22:30 AUD Reserve Bank of Australia Rate Decision (FEB 7)***
Feb 07
00:00 JPY Leading Index (DEC P)
06:00 EUR German Industrial Production n.s.a. and w.d.a. (DEC)
15:00 USD Consumer Credit (DEC)
18:30 AUD Westpac Consumer Confidence (FEB)
18:50 JPY Trade Balance - BOP Basis (DEC)
Feb 08
JPY Eco Watchers Survey: Current (JAN)
JPY Eco Watchers Survey: Outlook (JAN)
01:45 CHF Unemployment Rate s.a. (JAN)
02:00 EUR German Trade Balance (DEC)
08:15 CAD Housing Starts (JAN)
16:45 NZD Unemployment Rate (4Q)
16:45 NZD Employment Change (4Q)
18:50 JPY Housing Loans (4Q)
18:50 JPY Machine Orders (DEC)
20:30 CNY Producer Price Index (JAN)***
20:30 CNY Consumer Price Index (JAN)***
Feb 09
00:00 JPY Consumer Confidence (JAN)
01:45 CHF SECO Consumer Confidence (JAN)
04:30 GBP Industrial Production (DEC)
04:30 GBP Manufacturing Production (DEC)
04:30 GBP Visible Trade Balance (DEC)
07:00 GBP BOE Asset Purchase Target (FEB)***
07:00 GBP Bank of England Rate Decision (FEB 9)***
07:45 EUR European Central Bank Rate Decision (FEB 9)***
10:00 GBP NIESR Gross Domestic Product Estimate (JAN)***
16:45 NZD NZ Card Spending - Retail (JAN)
16:45 NZD NZ Card Spending (JAN)
19:30 AUD Reserve Bank Board Statement on Monetary Policy***
Feb 10
CNY Trade Balance (JAN)
02:00 EUR German Consumer Price Index (JAN F)***
02:00 EUR German Consumer Price Index - EU Harmonised (JAN F)***
03:15 CHF Consumer Price Index (JAN)
03:15 CHF CPI - EU Harmonised (JAN)
04:30 GBP Producer Price Index Input n.s.a. (JAN)
04:30 GBP Producer Price Index Output n.s.a. (JAN)
04:30 GBP Producer Price Index Output Core n.s.a. (JAN)
08:30 USD Trade Balance (DEC)
09:55 USD U. of Michigan Confidence (FEB P)***
14:00 USD Monthly Budget Statement (JAN)
*** Highly influential
Monday, Feb 6, 2012
Before: ATRO, BWP, CYOU, CNA, ELNK, PLUS, HAS, HCA, HUM, LAZ, LBY, L, MCY, NNN, NLSN, GOLD, SOHU, SYY, TW, UDR, USAK, USG
During: -
After: ADVS, AGNC, AMLN, APC, AHL, AEC, RATE, BCDS, BDX, CRDC, CSTR, CRK, DNB, FN, GHDX, GSM, GBDC, GPRE, IEX, KNXA, KFN, LDR, LNCR, LMNX, MCC, NCR, OTTR, OMI, PKY, PRE, PHH, PXD, PSE, PMCS, PPS, RBC, SREV, SPF, TMK, UNM, VECO, WNC, WPP, YUM
Tuesday, Feb 7, 2012
Before:
During: AGCO, WMCO
After: AKR, ARE, ATO, AVNR, AVID, AXS, BBCN, BWLD, CALX, CSII, CBG, CERN, CDXS, CMP, EXBD, PRI, CSGS, DEI, ESE, FORM, FWRD, GLUU, GUID, HIG, ONE, HIW, HNI, HMN, JIVE, KFRC, LCI, LTRE, LIFE, LGND, LNC, LPLA, LRAD, MOSY, NFP, NTGR, OPEN, OPNT, OPXT, PNRA, PLNR, PTP, POWL, PWAV, PZN, QUIK, RAH, RNR, RENT, IMI, SGI, SLH, SNCR, TMH, TTMI, TWO, ULTI, USNA, VCLK, VTSS, DIS, WCN, WU
Wednesday, Feb 8, 2012
Before: AGU, AIV, AINV, AUO, CAE, CKSW, CTSH, CSC, CVH, CRIS, CVS, ELN, EZCH, FBRC, FOR, GWR, GRC, HGG, IEC, IMMU, IR, INOD, ICE, VLCCF, LVLT, MSG, MCO, LABL, PHX, RL, PLD, PMT, RVSN, ROLL, RAI, SBGI, S, STO, TWX, GTS, UMC, VPG, VTNC, WXS, WYN ZBRA
During: HE, SMI
After:
Thursday, Feb 9, 2012
Before: ARX, ALXN, BLD, BCE, BECN, BELFA, BDC, BIOC, BIP, BG, CBOE, CCE, CGX, CNVO, CPO, OFC, DNKN, NPO, FORR, GPI, HPY, HERO, IRC, IFF, KKR, LO, LUFK, CLI, MMYT, MFC, MPEL, MNTA, NBL, OZM, OFI, PACR, PMTI, PEP, PM, PTSX, PDS, PBH, RAS, RDA, O, SNI, SEE, SHPGY, SIAL, SIRI, SON, SPR, ELOS, TCK, TDC, TRI, ZBB
During: AMOV, ORB, PBR, HTM
After: ACET, ATVI, ASEI, ATR, BRKS, CCJ, CBB, CIDM, CGNX, DCT, PROJ, EIHI, ELON, ECPG, ENH, EPHC, EVBN, XIDE, EXPE, FFG, GDI, HOKU, HME, IMPV, INFI, IM, INPH, LNKD, MDTH, MPWR, MRH, MOVE, UEPS, NUAN, NXPI, PER, PMC, PBI, PRO, PL, RSG, SWIR, SYUT, THRX, TRLG, XL, XOXO
Friday, Feb 10, 2012
Before: ASX, ALU, AB, LNT, APO, ACI, BPO, BPL, CPN, FLIR, FLO, IPGP, LH, LNCE, NYX, PPL, RLOG, THS
During: -
After: AAN
About Toni Hansen
Toni is one of the most respected technical analysts and traders in the industry with a high reputation for accuracy in both bull and bear markets. She began her trading career as an equity swing trader and has since expanded into many other sectors of the market. Her style of trading and market analysis transcends both time as well as market vehicles, making it attractive to investors and trader of stocks, futures, options, ETFs, and even the FOREX market. She is a Market Analyst and Trader with www.tonihansen.com.
Check out Toni Hansen's Blog for detailed comparisons of the current daily price development to similar occurrences of price development in the past.
Toni Hansen can be reached at: tradertoni@gmail.com.
Disclaimer
Trading in securities may not be suitable for all individuals. Consult your broker or other professional to determine your suitability. This is not an offer to buy or sell securities. The advice given above is of a general nature and should not be taken as a recommendation to buy or sell the referenced security.
