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FOR THIS WEEK'S POSITION TRADE NEWSLETTER
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Daily
Editorial: |
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Market Continues Its First Daily Correction
in 2006
Good morning! I hope
you had a wonderful extended weekend! Last week we saw the market
finally begin to slow its monumental rally that had been under way
since the start of the new year. On Thursday the market had its first
lower close for the new year and that correction off highs continued
into the weekend. Things slowed down considerably into the extended
weekend, however, making for a choppy and higher risk session on Friday
for intraday traders.
Friday got off to a slow start out of the
open. A relatively flat open was followed by a continuation of the
range that had been forming into Thursday's close. Instead of bouncing
nicely off the lows of the range when they hit around 10:15 ET, the
indices tried to slide through them. This was a bit too early for a
strong breakdown because it was coming out of a shorter base on the 15
minute charts than had occurred Thursday morning and into Thursday's
early afternoon breakdown. The result was that, even though the NASDAQ
had a nice short setup, it wasn't able to establish a strong move
before the market pulled back up into the range off of the 10:45 ET
reversal period.
This added bounce on the 15 minute charts
finally gave the indices enough of a correction from Thursday's descent
that the highs of the 15 minute range and the 15-30 minute 20 sma zone
held well. The market pivoted off this resistance back into the 5
minute 20 sma support. After basing along that support into 12:30 ET,
it accelerated once more to the down side. The market made new
lows on the day before slowing as the S&P500 came into its 15
minute 200 sma and the Dow Jones Ind. Ave. hit its 10 day sma support
at about 12:45 ET.
The
remainder of the day had fairly light volume. The market had a choppy
range with insignificant lower lows into 14:15 ET. At that point it
started turning around and soon broke the 5 minute 20 sma resistance.
It was able to continue the sloppy climb until coming back into the
mid-day range and the price resistance that accompanied it.
I don't have a very strong bias going into this week. My opinion on the
market hasn't changed much in terms of the larger time frames than
expressed in my first column this year. We still run the higher
risk of this breakout on the daily charts pulling back into the 20 week
sma simply because it was an earlier breakout than you will usually
find ahead of a strong upside move. As a result, this breakout hasn't
been that significant yet on the daily and weekly charts and the
correction from the highs last week could easily continue into this. It
doesn't look like it's going to be a sharp one though, and the action
on Friday leaves room for a retest of highs for a possible double top
or 2T type of double top on the daily charts.
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Economic
Reports and
Events:
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Jan 16:-
Jan 17: NY Empire State
Index for Jan (8:30 am), capacity Utilization for Dec (9:15 am),
Industrial Production for Dec (9:15 am)
Jan 18: Core CPI and CPI for Dec. (8:30 am), NY Empire State
Index for Jan (8:30 am), Net Foreign Purchases for Nov. (9:00 am),
Crude Inventories 1/13 (10:30 am), Fed's Beige Book (2:00 pm)
Jan 19:
Building Permits for Dec (8:30 am), Housing Starts for Dec (8:30 am),
Initial Claims 01/14 (8:30 am), Philadelphia Fed for Jan (12:00 pm)
Jan 20: Mich.
Sentiment-Prel. for Jan (9:50 am)
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Earnings
Announcements of Interest: |
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Only stocks with an
average daily volume of 500K+ are
listed. List may not be complete so be sure to always check your
stock's earnings date before holding a position overnight. (A) =
Earnings after the close, (B) = Earnings before the open,
(?) = Earnings time not specified at the time of this writing
Jan 16:
-
Jan 17: ASO
(B), CAL (B), CBH (B), DCN (?), FITB (B), FRX (B), IBM (A), INTC (?),
LLTC (A), MDC (B), MOS (?), SIFY (B), SOV (A), TER (A), USB
(B), WFC (B), YHOO (?)
Jan 18: DOX (A), AMR (?), AAPL (A), ASNL (2:00 PM), CIT (B), CNB (?),
EBAY (?), FHN (A), HCBK (A), HBAN (B), HTCH (A), JPM (B), MEL (?), NTRS
(?), PH (10:00 AM), QLGC (A), RDN (A), STX (A), LUV (B), SPSN (A), STT
(B), STI (B), SNV (?), TCB (?), BK (B), VCP (B), WM (A)
Jan 19: BBT
(B), BZH (B), COF (A), CMA (B), CREE (?), DHI (B), FFIV (?), FCS (B),
FSL (A), GNSS (A), HDI (B), HYSL (A), IGT (?), NITE (B), MER (?), MCHP
(A), MOT (A), NFB (?), NVS (B), PFE (B), RMBS (?), SFA (A), SLM (B),
UNP (?), UNH (B), WB (B), XLNX (?)
Jan 20: AT
(?), C (B), GE (?), JCI (B), KEY (B), RF (B), SLB (B)
Jan 23: AXP
(?), ACF (A), ARBA (A), AV (A), BAC (B), CBST (A), ET (A), ETN (B), F
(B), MSPD (?), PPC (B), SKM (3:00 pm ET), TXN (A)
Jan 24: MMM
(B), ADTN (?), AGR (?), AAI (B), AKS (?), BJS (?), EAT (B), BNI (B), CA
(?), CTX (A), CKFR (A), COH (B), GLW (A), CSX (?), DD (B), EMC (B),
EXTR (A), GDW (?), HMA (B), JNJ (B), KMB (B), LAB (B), LXK (B), LU (B),
NFLX (?), NOC (B), PPP (?), RFMD (A), RYL (A), STLD (?), STM (A), SUNW
(4:30 pm ET), NYT (B), TMA (A), TDW (B), UTX (B), ZION (A)
Note: All economic numbers
and earnings reports are in lines with those compiled by Yahoo Finance.
Occasionally changes will occur that are made after the posting of this
column.
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