If you're new here, you may want to subscribe to my RSS feed. .Comments are encouraged, I moderate them, so they may not appear immediately. Thanks for visiting!
Stocks took a beating last Thursday ahead of Friday’s payroll report. This big selloff set up a Buy day on Friday; let’s take a look at it to view it through the lens of the Taylor Technique.
The early part of last week saw a series of small advances, characterized by closes that were higher than the open for Monday through Wednesday. By the cycle of the Taylor Technique, we were starting to look for the Sell short day on Wednesday, but the intraday action was bullish, so we continued to be looking for the Sell short trade on Thursday. Read more...(582 words, 1 image, estimated 2:20 mins reading time)
There was nothing but platitudes from the G-7 meeting this weekend. There was conflicting news on Greece. It’s being said that some European banks aren’t taking Greek paper for repos. On the other hand, Goldman says that Greek debt spreads are too wide and will begin to narrow soon; this would lower the stress level in the global economy. The Euro is a bit higher; are traders coming to grips with the Greek situation, or is this just a respite. Sovereign debt ratings continue to be a topic of discussion; Geithner was defending the US AAA rating on the talk shows this weekend, and UK debt continues to see pressure in higher CDS prices. There are no economic reports out today, but we get Treasury auctions this week Tuesday through Thursday. The USDA is supposed to put out a Supply/Demand report tomorrow; it may be delayed because of the snow in DC. Read more...(493 words, estimated 1:58 mins reading time)
The January NFP report was a mixed bag. January’s payrolls came in as expected, but there was a big downward revision to December’s NFP. The unemployment rate fell by 0.4%; but the birth/death model shenanigans make this statistic much less reliable. So overall, I’d say it was good enough that there wouldn’t be a quick nosedive, but not good enough to offset the rise in risk aversion. Concerns about sovereign debt problems in Europe continue to weigh on the markets; raising fears that the economic recovery is stalling. Last year many were thinking that the economy would start to stall in February as stimulus was withdrawn or started to lose its effect; it’s starting to look like this thesis has merit. G-7 meets this weekend; it will be interesting to see if there’s any discussion about China and the Yuan. Trade tensions between the US and China are already high, will the Obama Administration continue to ratchet up the pressure? Read more...(580 words, estimated 2:19 mins reading time)
It’s been a wild day today. Problems with the weaker of the EU economies set the stage for the weak jobless claims number, which in turn raised fears about a weak NFP report tomorrow morning. Looking at the chart, today’s move shouldn’t have been a surprise (although the extent of the break wasn’t expected).
Looking at the eMini SP Futures, this week largely followed a Taylor Method script. Last Friday put in the low of the selloff, putting in a low at 1066.50. Tuesday saw a follow through on a Sell day, as the TT would predict. Actually, Taylor would have looked at Tuesday as a Breakout day, as Monday was an inside day. Tuesday’s rally stopped in the vicinity of last week’s double top at 1103. The daily chart for March eMini Spoos is below. Read more...(510 words, 2 images, estimated 2:02 mins reading time)
Well, last night started with a rise to 10 yr. highs in NZ unemployment, a drop in retail sales in Australia, and the mushrooming problems with Toyota. The EU pledge to prop up Greece led investors to bail out of some of the other financially weak countries in Europe. Weak German factory orders add to the angst. All this news outweighed good earnings reports from Cisco and Visa. US jobless claims were weak, but it’s just an appetizer for tomorrow’s NFP report for January. The ‘whisper number’ is weaker than forecast, and there’s confusion about what we’ll see tomorrow; there’s lots of confusion about the BLS birth / death model. Euro Zone turmoil is boosting the Dollar today, which is driving other markets. Traders are in a ‘show me’ mood about the economy over concerns about sustainability of growth. It’ll be hard to get the economy going if the labor market doesn’t improve. Read more...(558 words, estimated 2:14 mins reading time)
The ADP employment report showed a drop of 22K in payrolls for January. This is better than was expected, and bodes well for Friday’s NFP report. Overnight the EU approved the Greek reduction plan; Greek CDS prices fell in response. The EZ Services PMI rose slightly, as expected. At 8 AM we’ll hear the size of next week’s quarterly refunding. At 9 AM we get the ISM services survey, and at 9:30 is the EIA crude inventory report. Two days of rallies in the ‘risk exposure’ markets give lots of Taylor method Sell short setups today. Read more...(582 words, estimated 2:20 mins reading time)
There’s some follow through movement from yesterday’s moves, some more than others. If tocks can’t extend their rally we could end up getting a little bear flag here. Overnight there wasn’t any big news out of Asia, although the RBA’s decision to keep rates unchanged hammered the Aussie. Eurozone PPI was soft; nothing new on the Greek front. Today we get testimony from Geithner and Volcker starting at 9 AM; pending home sales are also out at 9. They are expected to have risen a bit in December. Read more...(536 words, estimated 2:09 mins reading time)
This weekend a Deputy Governor of the PBOC said that the Chinese government is planning new measures to try to cool their economy; this pressured equities. Europe has some good news this weekend; the Greeks didn’t collapse this weekend, and the EZ PMI was bullish. Geopolitical are flaring up as China protested US arms sales to Taiwan and Iran promised to deliver ‘a harsh blow to global arrogance’ on Feb. 11th, the anniversary of the Islamic Revolution. In response the US is increasing its presence around Iran and is sending Patriot missile batteries to the Mideast. Today at 9 AM we get the ISM manufacturing survey for January; the ‘headline number’ is expected to rise to 55.2 from 54.9. Read more...(632 words, estimated 2:32 mins reading time)
Bernanke’s reappointment yesterday is aiding stocks. Q4 GDP rose by 5.7%. This is a ‘rough draft’; and is often a lot different by the time the revisions are done, but it’s still a positive. Inventory refilling accounted for 3.4%. In Europe, yesterday’s warning about the UK’s financial situation rattled the markets, and the Greek financial problems continue to weigh. Later today we get the Chicago PMI at 8:45 (small decline expected) and consumer confidence at 8:55 (small rise expected). End of month window dressing may help support stocks today. Read more...(544 words, estimated 2:11 mins reading time)
In this morning’s STI watch list I wrote the following about the NASDAQ futures: “Yesterday was an inside day, so we treat today as a breakout day. Use the overnight high at 1820.00 for an upside breakout point and 1791.50 down.”
One of the tenets of the Taylor Technique is that most days see either previous session high or low exceeded on residual momentum from the previous day. This may be either continuation or the end of a swing move. Read more...(615 words, 2 images, estimated 2:28 mins reading time)
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
