GDP Report Day - Review

Breakout Trade Update:

Target filled at 1153 for + 14 profits points per contract. As posted on Twitter.
Reversal scenario at key resistance level as described on Wednesday.
Today : Intraday Bearish High Volume Reversal at Weekly Resistance ( 5min -Volume Spike: 124k Ultra High )
Daily :  Bearish Pin Bar , Outside Day
New Swing Position : SHORT from 1145.75

Line In the Sand : 1141.25

Volume output on the S&P 500 rose for a third straight session, coming in at 3.67 billion shares today.




Despite some weakness over the past two sessions, the major indexes put in a stellar performance in Q3 - and the best September since 1939 . In terms of monthly performances overall, the broad market saw its best showing since April 2009.


Early on today, the market reacted positively to a revised estimate on Q2 GDP which is now estimated to come in at an annualized growth rate of 1.7% (previous estimate: GDP growth of 1.6%). As well, personal consumption is estimated to have risen by 2.2% (previous estimate: a rise of 2.0%). Meanwhile, core personal consumption data for Q2 was downwardly revised, now showing a growth in this category of one percent rather than the previously estimated 1.1%.

The latest reading on initial jobless claims (for the week ending September 25) came in better than expected: the number of such claims reportedly totaled 453,000 (consensus estimate: 457,000 initial claims). Week-over-week, the latest numbers thus show 16,000 fewer claims. Improvement was also seen among continuing claims - these fell 83,000 week-over-week to a total of 4.46 million. The latest reading on the Chicago PMI was also positive: For September, the reading was 60.4 (previous month: 56.7; consensus estimates for September: a reading of 56.0).

Because of this slew of positive economic data, the market did not take its (early) cues from Europe, as it often has in recent weeks. For instance, traders failed to show negative reactions to Moody's decision to downgrade Spain's debt, to a report indicating that Ireland's banking sector requires billions of new capital, nor to poor economic data from Japan.

Daily trading volume benefited from window dressing and end-of-quarter portfolio adjustments. In fact, today's volume was the second highest seen this month - on the NYSE, volume came in at close to 1.3 billion shares.

New Swing Position

Trade Plan : Breakout from Prev Narrow Day with target at Weekly Pivot
Possible Reversal at Weekly Zone
SELL Stop 1136 and BUY Stop 1144. Previous orders canceled.
6:15am - Crude Oil Futures Breakout above Prev High - (First Clue ). EURO Futures Pre-Report breakout to new highs ( Second Clue )
8:12am - New Orders : BUY Stop 1139, SELL Stop 1137.
8:30am - Filled : Long 1139. Reaction to GDP Report. SELL Stop 1141

If either one gets fill the other one will be the stop loss.
Setup : Daily Doji and NR 9.GDP Report. SP500 Index : Daily Inside Day
 ( Above E-Mailed to Subscribers Wed after the close )

It appears to have become fashionable to attribute any bout of weakness on the US markets directly to Europe. Today, especially in the absence of any major economic data releases, the major indexes apparently followed the US financial sector which was weak as it followed the banking sector in Europe. European protests - in Brussels and elsewhere - against austerity measures served to pressure equities in that region.


Trading on US markets has lacked a clear direction recently, but third quarter trading has been very positive overall, with the S&P 500 on track to producing a Q3 gain of nearly ten percent. In September alone, the S&P 500 has thus far rallied 9%, its best monthly gain since April 2009.

Trading has also been subdued as Q3 draws to a close and Q4 earnings season will not start until early October, with Alcoa reporting on October 7. Many large players are thus in a wait-and-see position, market commentators suggest.

The bond market appears to indicate that the US Federal Reserve will make a move to push long-term interest rates even lower in order to encourage economic growth. The Fed is believed to purchase Treasuries to accomplish this (i.e., raising bond prices and lowering yields). There is however some dissent among Fed members, with the Philadelphia Fed President stating today he does not favor further asset purchases by the Fed at this time

Black Gold ( Oil ) Trade Wins

First Crude Oil Futures trade wins. This sucker moves faster than ES !

Found Black Gold without getting dirty.

Durable Goods Report Day-Review

The broad market saw its strongest single-session gain in two weeks and thus boosted the indexes to their fourth straight weekly gain after a few days of shallow consolidation. This puts the S&P 500 to a four-month high. Some market commentators however question the underlying fundamental economic strength of this rally saying instead that it is largely about 'window dressing' for the upcoming end of quarter.


Today, we did however see positive economic data releases (with the exception of housing data - see below). August durable goods orders data was released today and appeared to have a positive impact on trading. While durable goods order were actually down last month, slipping by 1.3% (which made for the worst monthly drop in a year), that decline was still better than the anticipated loss of 1.4% had economists had been expecting. When the transportation component of these goods orders is excluded, orders in fact spiked two percent higher (consensus estimate: an increase of only 0.6%).


The Commerce Department said today that August new home sales were largely unchanged month-over-month, coming in at an annualized 288,000 units, meeting consensus estimates. This data hardly indicates any recovery in the housing market, as the number of new homes sold was the second-lowest on record; August 2010 sales were in fact 29% below those registered a year earlier for the same month. One market analyst called this a 'pitiful performance', adding that a 'meaningful pickup in sales' would not be seen until next year.


According to the National Association of Realtors, in August sales of previously occupied homes were up 7.6% as compared to July, rising to a seasonally adjusted annual rate of 4.13 million. This number, too, is very low: it represents the second-poorest month in more than 10 years (note that July was the worst month for previously owned home sales in 15 years). In August 2010, the median sales price for a new home came in at $204,700, off by 1.2% compared to one year earlier (sales prices are now at their lowest levels since late 2003).

Anatomy of a Swing Trade

REVIEW :

Long position from 1124 was liquidated at 1143.75 for + 19.75 points profits and NEW Swing position short 1143.75 on FED Day added another + 19.75 pts for a total of + 39.50 points per contract. Both profits gains being exactly the same is just a coincidence.

Update on SHORT Swing Position

Position in profit + 22 pts and expecting to find support between : 1109 and 1113


Friday Sept 24 UPDATE :

SHORT position liquidated at 1124.50 during Globex Session. Globex price action always gives clues . Now Out anf FLAT on my Swing Account.

Financial Press Overview:


US market weakness these days is often explained by some kind of trouble emerging from Europe. Case in point, today the press reported that early US equity weakness was precipitated by a lower reading on business activity in the countries that use the euro, as well as the fact that Ireland's economy contracted some 1.2% in Q2. The fact that US applications for unemployment benefits rose unexpectedly last week also contributed to a stalling of the recent September rally.

To put things into perspective, stocks have seen a huge rally in September that has thus far boosted the Dow some 6.5% this month, although overall the benchmark is only up 2.2% for the year. The Dow has closed higher on 13 of the past 16 sessions and has just now broken its winning streak. Some market commentators are however turning bearish, suggesting that the rally might be over and that economic data cannot support it from a fundamental perspective.


According to the Labor Department, first-time unemployment claims rose last week, up by 12,000. Specifically, initial jobless claims for the week ending September 18 came in at 465,000 (consensus estimate: 450,000 claims).


In other economic data, home sales improved after having recently slipped to 15-year lows. In August, existing home sales rose 7.6% month-over-month, coming in at an annualized 4.13 million units (consensus estimate: 4.1 million units). Furthermore, leading indicators for August (an index of future economic activity) rose more than expected. In spite of expectations for an increase of 0.1%, leading indicators came in up 0.3%.

Both silver and gold continued their meteoric rise to new highs. The continuous silver contract almost hit a 30-year high (around $21 per ounce) while gold traded near its all-time high (around $1296 per ounce).

Pre-Open High Volume Reversal

As posted previously Saturday, Sept 18

the Reversal after the FED Day scenario as expected and called on last Saturday.

Long position from 1124 was liquidated at 1143.75 for + 19.75 points profits and NEW Swing position short: 1143.75

SETUP: 4 Hr MACD Bearish Divergence

RSI ( 2 ) Reading : 93

VIX Count

Other Intermarket Clues

Also 9-21 was a TTT SELL short day, that worked like a champ.

This Trade shown here is a Counter Trend Entry. The Trend is clearly down but the buyers initiated their longs at the key level shown on the chart. This is a classic High Volume Reversal with a very tight stop loss ( Low Risk ). Many of this HVR often occur but they failed to follow through, hitting the stop loss of many people that don't know what they are doing. For this trade to follow through immedietly , it must to take place at the correct exact level and at the correct magnitude of Volume, something that many day trading " Educators " or false pretenders don't teach you. Timing and Presicion is everything in trading.

Trading wisdom states that the majority is usually wrong.We make money from the imbalance of buyers and sellers that is created. This is how trend reversals and explosive moves occur. The question is, “Are you the first one on the scene when the imbalance takes place”?

Notable Quotes :

Jack Welch, another long time republican donor that expatriated thousands of US jobs during his GE position as CEO ,said in CNBC :

" We got very, very touch jobs outlook" . " Economy is not going to bail us out with these Government policies "
I wonder why he never said that during the Bush Administration when it was clearly worst than now.Double standards ? He is also spreading FALSE  rumors in CNBC about President Obama that he is
" Anti-Business ".

Warren Buffett, the worlds greatest investor, said that when the Government needs revenues the most, they should get it from the people that have the most ( wealthy citizens ).This statement is in full support of Higher Taxes Policies proposed by President Obama.

Other News : Communist China is increasing Oil deals with Iran ( CNBC ) ,while taking thousands of US jobs, thanks to previous republicans trade policies.