CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
Remember the warnings in Gold that the Bollinger Bands were giving us in October? Here is a chart from October 15th that I posted here:
The Bollinger Bands were part of the October 12th analysis that helped form our original price projection chart that we have called the Running Chart on Gold:
Here is the running chart of Gold now:
As you can see, from the October 12 analysis, gold ran perfectly along the price projection that I showed you. I have been writing that the analysis is all well and good, but the price of gold needs to drop, in a flush, in order to reset sentiment. In bull markets, which this most certainly is, big rallies follow the intermittent drops that occur along the way because many jump ship which allows the price to rise. In other words, fear is good for the bulls.
October 26th Morning Note:
" Why can't we get the final flush the market needs, arrghh!!!
Patience young grasshopper, patience."
Well, we got the start of the flush last Friday, exactly one week later. This is what we have been waiting for in order to put the last of the money allocated to gold and gold stocks to work.
This is when we need to look at the support level chart again.
You can see that the 50% retracement and the 200 DMA are at roughly the same area (marked in blue circle). That is an overlapping support that is another good spot to buy. The next level is shown as Super Support that is the next Fibonacci retracement level as well as horizontal support from Summer resistance points that should now serve as support.
That is all well and good, but the bottom line is that Gold is in a bull market. If you have been riding that bull for the last decade, this price action is nothing new and scary, it is actually an event that we hope for because it shakes the tree and allows us to buy shares at lower prices from those who are bailing out of fear. Those technical levels may or may not be hit perfectly, but that doesn't matter - this is when you use crayons for your technical analysis and enter stink bids hoping to get hit. That is what we have been doing with the cash allocated to this space and I'm disappointed that we have not gotten a large gap down this morning so that we could get some of those orders filled. Hopefully we will get one more drop, but it wouldn't surprise me to see Wednesday's release of Public Sentiment to end up showing the last low for a while as precious metals rally in coming weeks.
This interest rate ratio is pointing towards a possible move higher in gold, but the jury is still out:
My analysis continues to show that the mining stocks should outperform the metal, but having both in your portfolio is the way to go.
This song was going through my head over the weekend:
http://www.youtube.com/watch?v=OMNPPwq8I2Y&feature=fvwrel
Hang in there, fast and furious gains are in our future.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^ATX | ATX | 2,224.65 |  2.05 (0.09%) | Components, Chart, More |
| ^BFX | BEL-20 | 2,396.50 |  21.50 (0.91%) | Components, Chart, More |
| ^FCHI | CAC 40 | 3,461.31 | 31.15 (0.89%) | Components, Chart, More |
| ^GDAXI | DAX | 7,316.51 | 47.34 (0.64%) | Components, Chart, More |
| AEX.AS | AEX General | 334.10 | 3.50 (1.04%) | Components, Chart, More |
| ^OSEAX | OSE All Share | 485.07 | 2.67 (0.55%) | Components, Chart, More |
| ^OMXSPI | Stockholm General | 330.20 | 1.87 (0.56%) | Components, Chart, More |
| ^SSMI | Swiss Market | 6,681.42 | 19.95 (0.30%) | Components, Chart, More |
| ^FTSE | FTSE 100 | 5,829.03 | 39.52 (0.67%) | Components, Chart, More |
| FPXAA.PR | PX Index | 984.04 | 3.11 (0.32%) | Chart, More |
| MICEXINDEXCF.ME | MICEX Index | 1,438.41 | 3.93 (0.27%) | Chart, More |
| GD.AT | Athex Composite Share Price Index | 811.24 | 9.03 (1.13%) | Chart, More |
http://finviz.com/futures.ashx
http://finviz.com/fut_chart.ashx?p=m5&t=ES
http://finviz.com/fut_chart.ashx?p=m5&t=ZB
http://finviz.com/fut_chart.ashx?p=m5&t=DX
http://finviz.com/fut_chart.ashx?p=m5&t=GC
http://finviz.com/fut_chart.ashx?p=m5&t=SI
http://finviz.com/fut_chart.ashx?p=m5&t=CL
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from Seeking Alpha
Boeing (BA)
Nov.5: 8:14 AM Boeing (BA) looks set to win a $2.4B order from India for 15 Chinook helicopters and 22 Apache helicopters, Dow Jones Newswires reports, with commercial negotiations due to begin soon. Boeing has been competing against MiL Moscow Helicopter Plant; if the U.S. company does win the bookings, it will represent a major shift for India away from its reliance on Russia.
Broadcom Corporation (BRCM)
Nov.5: Shares of Broadcom Corporation (BRCM) have declined 8.1% over the past 12 months. At $31.45, the stock has dropped by 15% from its three-month high at $37 achieved in September. I believe the recent plunge presents a valuable buying opportunity for investors based on the following four reasons:
Freeport-McMoRan (FCX)
Nov.4: Freeport-McMoRan (FCX) has managed to steer itself through a difficult period with operational prowess. In the face of rising production costs and lower global material demand, however, mounting political obstacles are creating new pressure on profit margins for the world's largest publicly traded copper producer.
Intel (INTC)
Nov.5: Intel (INTC) recently announced plans to build a new research facility in Hillsboro, Oregon with a roughly $3 billion dollar project. This large investment into an R&D building signals Intel's commitment to follow the money as the industry transitions to fewer PCs and more mobile devices. Intel remains the leader in semiconductor chip development, and at a stock price under $22, I consider it a buy.
Silver Wheaton (SLW)
Nov.5: 8:35 AM Silver Wheaton Corp. (SLW) declares $0.07/share quarterly dividend, -30.0% decrease from prior dividend of $0.1. For shareholders of record Nov. 21. Payable Dec. 5. Ex-div Nov. 19. 7:31 AM More on Silver Wheaton (SLW) Q3 earnings: Silver equivalent sales a disappointing 5.1M ounces due to timing of deliveries, but are expected to be made up for in the future. Cash margin of $27.70, down 15% Y/Y. Shares -4.3% premarket. Keep an eye on the Silver Miners ETF (SIL), of which SLW makes up 13.26% of the holdings.
Toyota Motors (TM)
Nov.5: 7:06 AM Shares of Toyota Motors (TM) move up 2.0% premarket after strong demand in Japan boosted FQ2 results. Deliveries in Japan rose 20% Y/Y as government subsidies for fuel-efficient vehicles helped motivate buyers.
Walgreen (WAG)
Nov.5: 8:27 AM Walgreen (WAG) reports sales slipped 2.1% to $6.13B for October with Hurricane Sandy impacting results. At the height of the storm, over half of the company's stores in the affected area were closed. Lower customer traffic was partially offset by a 2.3% increase in average basket size during the month. WAG -0.8% premarket.
Vad's Catch of the Day
Kaimu's Sound Money
Deron's Daily ETF Analysis
In the November 2 issue of our trading newsletter, we concluded our ETF trading commentary by saying, "Given the kind of weakness that we've seen lately, including continued relative weakness in key large-cap tech stocks like Apple ($AAPL), it would not be surprising if there is minimal upside follow-through on yesterday's bounce." Indeed, not only was there a lack of follow through to the upside, but stocks also gave back a majority of the previous day's gains. After falling an average of more than 1%, all the main stock market indexes closed at their dead lows of the day, and in the bottom half of their trading ranges for the week.
Although stocks managed to retain a small portion of their November 1 gains, the technical situation created by last Friday's decline puts the stock market in a rather precarious position. Specifically, each of the major indices formed a bearish engulfing candlestick pattern, which forms when an index or stock opens above the previous day's high, but sells off to close all the way below the previous day's low. This pattern can be clearly seen on the daily chart of PowerShares QQQ Trust ($QQQ), a popular ETF proxy for trading the Nasdaq 100 Index:
As you may recall from this recent article on our trading blog, we prefer to sell short stocks and ETFs only after they've broken down below an obvious level of technical price support, then subsequently bounce into a resistance level and form a bearish reversal pattern. One such ETF we came across in our nightly stock scanning that meets the criteria is iShares Dow Jones US Real Estate Index ETF ($IYR). We have annotated this ETF swing trade setup on the daily chart of IYR below:
After bouncing off major support of its 200-day moving average on October 26, IYR moved back above near-term resistance of its 20-day exponential moving average on November 2. However, notice that it formed a bearish reversal candle that same day by rallying substantially higher from its opening price, but reversing to close back down near its open. Furthermore, more substantial intermediate-term resistance of its 50-day moving average is now just above the intraday high of November 2. Additionally, the 20-day exponential moving average formed a bearish pattern by crossing down below its 50-day moving average several weeks ago. All these factors provide us with an ideal entry point for short sale entry into IYR going into today's session. Regular subscribers of our Wagner Daily swing trade newsletter should note our preset trigger, stop, and target prices for this setup in the ETF Watchlist of today's report.
Because many of our subscribers trade in non-marginable cash accounts, such as IRA accounts, we are not "officially" planning to sell short IYR. Rather, we are looking for a buy entry into ProShares UltraShort Real Estate ETF ($SRS), an inversely correlated "short ETF," instead. If you turn the chart of IYR upside down, the chart pattern of SRS is nearly (but not exactly) the same. The pattern is slightly different because inversely correlated and leveraged ETFs sometimes underperform the actual underlying index over longer holding periods. However, since we're stalking this as a short-term, momentum-based trade, the degree of underperformance is not likely to be significant. Traders with marginable accounts who can sell short may wish to use our buy signal into SRS as a signal to sell short IYR instead, but our "official" trade setup is to buy SRS if it trades through our exact trigger price for buy entry.
As we've mentioned several times over the past two weeks, we've been monitoring both PowerShares QQQ Trust ($QQQ) and iShares Nasdaq Biotechnology Index ($IBB) for potential short sale entries on a significant rally into resistance. However, last Friday's major weakness already sent QQQ right back down to near its recent lows, while IBB has been so weak that it actually closed the week at a new "swing low." As such, there simply is not a positive reward-risk ratio for selling short either of these ETFs at this time. Nevertheless, since these two ETFs have been showing such considerable relative weakness to the broad market, they remain on our internal watchlist for when they inevitably and eventually muster up the momentum for a significant short-term bounce into resistance. As for the long side of the market, select Emerging Markets ETFs continue to hold up well and show decent relative strength. But as the November 2 price action demonstrated, the broad market simply remains much too weak to attempt any bullish entries right now because current breakout attempts, even in stocks and ETFs with relative strength, have a high likelihood of failure. This is typical price action when our stock market timing model is in "sell" mode.
On a separate note, we will conclude by just giving you a heads-up on an article we just wrote regarding the bearish technical chart pattern of Apple ($AAPL), and more importantly its implications on the broad market trend. Generally, the article suggests a "changing of the guard" is under way in the stock market, but where are the new guards? The $AAPL article is here on our trading blog.
To receive our best daily picks for swing trading stocks and ETFs, complete with preset entry and exit prices, sign up today for your risk-free 30-day subscription to The Wagner Daily at http://www.morpheustrading.com. Learn more about our proven stock trading system that works by clicking here.
OptionOracle
Harp's Roadmap
Cara on the Metalminers
Cara on the International Markets
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
Commenting on this Community Chat will be automatically closed on November 9, 2012.
Source: http://caracommunity.com/content/bill-caras-blog-nov-5-2012
madonna halftime show linsanity the alamo anencephaly tesla model x lou gehrig toby mac
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.