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FOR THIS WEEK'S POSITION TRADE NEWSLETTER
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Daily
Editorial: |
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Market Eases Lower
Good morning! The
bears reared their heads in a rather ugly fashion on Friday. The
concerns I had going into the bullish action this year came to pass
with a very significant decline at the end of past week. All in all, it
was one of the largest one-day losses since Sept. 2003 with the Dow
Jones Ind. Ave. hitting negative levels on the year. While there are a
lot of stocks coming out with fourth-quarter earnings reports for last
year, outside pressures were also at play last week. A new al-Qaeda
tape attributed to Osama and Iran pushing for nuclear capabilities set
oil prices ablaze. It wasn't a pretty picture.
As of Friday, 58% of the 95 S&P500
companies that had reported earnings beat the analysts' estimates with
24% falling below. Nevertheless, the day began on a weak note when the
base into Thursday's close along the 15 minute 20 sma gave way. This
triggered an Avalanche short pattern almost immediately out of the
open. It was a slow start due to 5 minute 200 sma support, but the
selling picked up around 10:00 ET and continued steadily throughout the
day.
Volume was strong throughout as most stocks
sold off. If you look at the 5 minute charts you can see spikes that
indicated short term exhaustion moves. These were enough to stall the
market at key reversal zones, such at 10:45 ET, noon and 14:00 ET. No
correction from support, however, was able to break the 5 minute 20 sma
with any strength. They didn't even try until late afternoon, but the
slowing pace in the market never saw any reversal in pace. The upside
moves paled in comparison to the selloffs, even coming out of 14:00 ET,
which tends to be the strongest afternoon reversal zone of the day.
The market closed near the lows on Friday. This selling doesn't show
any sign of reversal action going into Monday. It was such a strong
downside move that it makes continued selling at a similar pace rather
difficult, but I'd like to seem some slowing down of the selling
intraday to allow for corrective action off daily support levels. These
fall primarily at prior lows on the daily charts and at the 50 day sma
support, which is very close in the Dow. This can be enough to allow
for a bit of relief on Monday. My longer term outlook on the market
remains unchanged from recent action. This is pretty normal action
given the placement of the early January breakout attempt as compared
to the rally of last October-November. In order for that upside to
continue off support such as the 20 week sma, we need the downside
action to start to turn over and again favor the bulls, but this would
likely occur more gradually initially than the descent.
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Economic
Reports and
Events:
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Jan 23:
Leading Indicators for Dec (10:00 am)
Jan 24: -
Jan 25:
Crude Inventories 01/20 (10:30 am)
Jan 26:
Durable Orders for Dec (8:30 am), Initial Claims 01/21 (8:30 am),
Help-Wanted Index for Dec (10:00 am)
Jan 27:
Chain Deflator-Adv. For Q4 (8:30 am), GDP-Adv. For Q4 (8:30 am), New
Home Sales for Dec (10:00 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 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)
Jan 25: ABT
(B), APD (B), ATI (B), ALTR (?), AHC (B), ABC (B), AMTD (?), AMCC (A),
ASH (08:00 am ET), ADP (B), AVT (?), BLS (B), BMY (?), ELY (A), CHIR
(4:45 pm ET), CRUS (A), CL (?), CNXT (?), COP (?), DRE (A), EXC (B),
FIC (A), FBN (?), GD (B), HRS (A), HXL (A), INGR (A), IFIN (A), JNPR
(?), KOMG (?), LEA (B), LSI (?), MXIM (A), NYB (B), NCX (B), NVLS (?),
PMTC (B), PMCS (A), PLCM (?), PX (B), QCOM (?), ROK (?), SAP (B), SLAB
(B), SSTI (A), SWKS (A), SSCC (B), STJ (?), SWFT (A), HSY (B), MHP (B),
VAR (A), WLP (06:00 am ET), XRX (B))
Jan 26:
AFFX (?), ALK (?), AMGN (08:00 am ET), ANDW (?), T (07:30 am ET), AVID
(A), BAX (?), BEBE (?), BDX (B), BOW (B), BRCM (A), BC (B), CAH (B),
CAT (B), CLS (?), CELG (?), CPWR (A), ED (?), CY (B), DHR (B), DTAS
(A), D (B), DOV (A), DJ (B), EMN (A), LLY (?), ELX (?), EQT (B), FII
(4:00pm ET), FDC (?), FDRY (A), BEN (?), GM (B), GNTX (?), GFI (?), HIG
(A), HON (B), ICOS (?), NDE (B), INFA (A), IR (B), IDTI (A), IRF (A),
JNS (B), KEM (B), KLAC (?), KLIC (B), LSCC (A), LEG (A), LMT (B), LYO
(B), MRO (?), MEE (A), MCK (A), MWV (B), MENT (A), ,SCC (?), MSFT (?),
MLNM (B), NWL (B), NE (B), NOK (?), ORI (?), OPWV (?), PKTR (A), PLAY
(A), POT (?), DGX (B), RBAK (?), COL (B), SNDK (A), SHW (?), SO (B),
SYK (A), SU (?), TLAB (B), TEN (B), DOW (B), TSM (08:00 am ET), UIS
(B), UPS (B), VSEA (A), VRSN (?), VZ (B), WDC (?)
Jan 27: BDK
(B), CVX (B), FPL (?), HAL (?), MAN (B), NUE (?), PG (B), UCBH (?)
Jan 30:
ATHR (4:00 pm ET), CHKP (B), CMI (B), EK (B), XOM (?), FISV (A), KFT
(A), MAT (B), RSAS (A), SGP (B), SII (B), SYY (?), TSN (B), UNM (A),
ZMH (A)
Jan 31: ACE
(A), ADPT (?), ASD (B), ARTG (?), CCJ (?), CB (A), CIN (?), CEG (?),
CAM (B), COCO (B), CFC (B), CYMI (A), ELN (B), ETR (B), FLEX (A), GOOG
(?), HLT (B), ITW (08:00 am ET), RX (B), ISSX (A), JBLU (B), K (B), MRK
(B), SEPR (B), SIE (A), SGTL (A), STN (?), SYMC (?), TE (B), ERICY
(01:30 am ET), ALL (A), X (?), VLO (?), WYE (?), ZHNE (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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