9:52 am EDT: The ES bounced after PMI with the day session low so-far of 1086.75 near closing VWAP. Still expecting a range day and will play 1084.00 to 1099.00, though one of 1077.75 or 1102.75 could still be a low or high, respectively.
Archives for November, 2009
The Precise Take – ES maintaining as month comes to a close
Leaders Analysis: Not much has changed since Friday’s quasi reversal. If the ES can advance, it will be important to watch the EuroYen’s reaction at its 200 day moving average, which should now act as resistance.
Medium Term Analysis: Today is month end, which is usually a range day (a notable exception was last month’s selloff, though equities were already in a downtrend). The only news today is Chicago PMI at 9:42 am, which is not usually a big market mover unless there is an outlier headline number. Tomorrow is ISM Manufacturing, but the big mover is Friday’s Employment Situation (non-farm payrolls). The beginning of previous months marked the start of new uptrends and, as long as last week’s lows hold on a closing basis, we will look for new contract highs.
Trading Today: The ES found support at the confluence of monthly R1 and combined session pivot from 1084.00 to 1085.00 (actual low 1084.50). We will look for longs in this area or…
27 Nov
Pre-open eMini S&P 500 Morning Report
Posted in Pre-open Analysis by Bob English | No CommentsThe Precise Take – End of trend or shakeout?
Leaders Analysis: An unsustainable divergence built Wednesday with the 30 Year and 10 Year Treasury futures breaking through resistance materially and the US Dollar breaking support materially. We expected the reckoning would be postponed post-holiday, but it was not. Volatility is such that many of the leaders have advanced from support to resistance or vice versa, so another short term reversal is now possible.
Medium Term Analysis: The Dubai news is largely immaterial as it broke early Wednesday and did not cause an immediate reaction. The media cannot allow a large move to be ascribed to a shakeout. Whether or not this is a shakeout remains to be seen; however, the ES rejected a key value area yesterday (blue rectangle below) and traded back up to the lower end of its highest volume value area (green rectangle). In addition, SPY will open just above very strong support between 108.40 and 108.58, which includes monthly R1, weekly S1, and VWAP anchored from both the Nov 2 09 low and from the Oct 07 all time high. If this area does not hold, not only is the rally in jeopardy, but the prospect for future rallies will be suspect as well. If it holds, the 2009 rally has material new highs ahead, perhaps into early 2010.
Trading Today: Time constraints prevent…
25 Nov
Guest Post: Exclusive Interview: David Callaway Editor-in-Chief of MarketWatch from Wall St. Cheat Sheet by Damien Hoffman
Posted in General Analysis & Commentary by Wall St. Cheat Sheet | No CommentsExclusive Interview: David Callaway Editor-in-Chief of MarketWatch from Wall St. Cheat Sheet by Damien Hoffman
In the late ’90s, MarketWatch stormed on the scene and quickly became one of the top financial media outlets on the web. Twelve years later, Editor-in-Chief David Callaway is looking to make MarketWatch a recognized brand across the globe.
I spoke with David about where MarketWatch is headed, how they plan to get there, and the role of social media during the process …
Damien Hoffman: David, with the internet creating a very competitive landscape, how will you keep MarketWatch on the leading edge of financial journalism?
David: We need to expand our audience. MarketWatch has been around for twelve years now, so our audience in the US is mostly set. Our audience is a hundred million people who own stocks or mutual funds in the US. However, online financial news is only getting a small fraction of that. So, there is a lot of room for growth.
Growing internationally is really where we need to focus. We need to get our name out there. We have journalists in Europe and Asia. In the Middle East we have somebody, but we still have a very young brand name when compared to the Wall Street Journal and New York Times.
Rupert Murdoch is always fond of saying there is a whole generation of people moving into the middle class who are going to want to consume financial products. I subscribe to that theory and think there’s an opportunity for MarketWatch in the next ten years to become more a brand name in Europe and Asia.
Damien: Do you plan to create partnerships with preexisting outlets abroad, or are you building everything from the ground up?
David: About eighteen percent of our total traffic is outside the US mostly — but not exclusively — in the English speaking countries such as the UK, Canada, Australia, China, and Germany. During the first ten years of MarketWatch’s existence, most of those people have been investors or people interested to see what’s going on in the US. Likewise, our US readers have been interested in what we’re doing in China because they’re interested in buying Chinese Internet stocks or Macau gambling stocks. For us to see some scalable growth we need to start covering stuff for Europeans in Europe and for Asians in Asia.
The way to do that is twofold: One way is through the News Corp (NWS) network. For example, Dow Jones has a global name and we’ve been able to establish correspondence with folks in those outlets fairly easily. Now with News Corp running the show, doing things with Sky News is a lot easier for our London team and doing stuff in Asia is a lot easier with the Sydney Morning Herald in Australia.
Another way is through partnerships. We can become part of established local media and get our brand name out there. That’s probably a good strategy.
Damien: How do you see social media playing a role in that process?
David: It’s huge and getting bigger by the moment. I don’t know where we’re going to be five years from now, but five years ago, MarketWatch was on only AOL, MSN (MSFT), and Yahoo Finance (YHOO). However, now we get a ton of traffic from Google (GOOG) and we’re getting a large and growing traffic from places like Twitter and Facebook. As far as I can see, those platforms are going to continue growing for the time being. People are exchanging news and swapping stories on Twitter and Facebook and we need to be there.
Then there’s video. Back in the dark ages in 2001-2002, we had discussions at MarketWatch about whether we should kill video because it was a small product and it wasn’t making much money. Every year we would have management meetings and the guy who was in charge video would argue, “This is going to be the year video takes off!”
Of course, it never really took off until about 2005. Then YouTube hit. Like it or not, video is a major presence in online storytelling and every news site must be a part of it.
The traffic figures are still relatively small compared to overall traffic, but it is becoming a preferred way people access news and stories — certainly a preferred way for advertising. So, we’ve got a huge video commitment with the Wall Street Journal network. Our video team operates with the whole network.
Damien: On a more philosophical level, what is your opinion regarding information online? Some people claim the internet is cluttering the world with noise rather than original journalism.
David: MarketWatch has about a hundred journalists working for us. We have created original news from the very beginning. So when I hear a newspaper editor saying, “The only news you see on the Internet comes from newspapers,” that’s crazy. A lot of direct publishing is happening on the net.
Also, we have the same ethics, the same newsroom practices and priorities as most of the major newspapers in terms of developing, editing, publishing, and delivering news. We just do it straight to the web instead of on paper first. That’s the only difference.
Damien: Dave, thanks for sharing your thoughts about where your organization is headed and how you contribute to the financial media.
David: Anytime. You guys are making quite a splash. Keep it up.
The Precise Take – ES attempting to punch through to new highs ahead of holiday
Leaders Analysis: Only the weak US Dollar seems to agree with equities strength, as 30 Year T-Bonds have broken through resistance and the EuroYen is trading under its 200 day moving average. However, with the shortened week and many professionals already gone, correlations can stay unhinged until Monday, when we expect a reckoning.
Medium Term Analysis: The ES is trading higher off the 8:30 am reports and we would be surprised not to see a material run higher into Friday’s abbreviated session. The Time Profile for today and Friday (not pictured due to time constraints) has a bullish bias for each 30 minute time period throughout the days except for the final 30 minutes on Wednesday and the subsequent Friday, when there appears to be profit taking.
Trading Today: The area from 1107.00 to 1108.25 that includes yesterday’s high, weekly R1 and the daily R1’s should serve as support. Below that, and we would still…
10:25 am EDT: The ES sold off sharply on the open down through the overnight low to combined session daily S2 and the weekly pivot at 1095.25 (actual low of 1095.00). Though this support level is below where we were willing to entertain longs per the morning report, the strong reaction off of it suggests there is still support for this rally. Perhaps a little fear is needed ahead of the 5 Year auction at 1:00 pm. VWAP (approx 1101.50 now) is providing resistance. If the ES trades above it and it becomes support, we’re willing to look for longs again, preferably after 1:00 pm (remember too FOMC Minutes at 2:00 pm). Shorts appear dangerous as long as 1095.00 holds.
24 Nov
Pre-open eMini S&P 500 Morning Report
Posted in Pre-open Analysis by Bob English | No CommentsThe Precise Take – ES at highs as news pace accelerates ahead of Thanksgiving
Leaders Analysis: 30 Year T-Bonds and 10 Year T-Notes reversed upwards yesterday on a strong 2 Year auction. The EuroYen reversed down after coming up against moving average resistance, and the US Dollar found support at the 75 level. No equities bearish signal yet, but they are close once again as they were last Friday. There is a 5 Year auction today and a 7 Year auction tomorrow, that could reverse any moves long term Treasuries make.
Medium Term Analysis: There are 7 major reports before the markets close tomorrow, so we expect some volatility. Because the ES is near highs, it would only take one or two good numbers off a report to push through highs and have a relatively frictionless ride up to the next target of 1024.00 to 1126.25. Longs do not want to close the week with a double top structure in place because equities tend to selloff the week after Thanksgiving.
Trading Today: Though the ES retraced a bit farther than we would have liked yesterday afternoon, it found support overnight near day-session-only S-1 (actual low 1099.00). Overnight resistance has been weekly R1 in confluence with the 61.8% retracement from yesterday’s high at 1107.00 We will look for longs today down to…
10:21 am EDT: The ES has not looked back much since the open as it easily breezed through the 1107.00 to 1107.50 potential reversal area (weekly R1 and long term point of control), and is now testing contract highs toward the 1112.25 area. There is no major resistance above there until 1124.00 to 1126.25 (weekly R2 and 50% retracement of entire bear leg). A reversal to the downside from here (making a double top on the daily) is unlikely, but to protect, we would not look for longs below previous support at 1104.25.
The leaders continue to confirm the equities bullishness, including now T-Bonds, which fell from resistance and are now tracking T-Notes.
23 Nov
Pre-open eMini S&P 500 Morning Report
Posted in Pre-open Analysis by Bob English | No CommentsThe Precise Take – ES up strongly at beginning of US holiday week
Leaders Analysis: Friday, the leaders came close, but did not signal a change from equities bullishness. Overnight, the US Dollar is down after closing Friday at its 20 day moving average resistance, the EuroYen is up after closing at its 200 day support, and 10 Year T-Notes have fallen from resistance. Only 30 Year T-Bonds are lagging and holding on at resistance. There are some major Treasury auctions this week, beginning with the 2 Year today, so the 30 Year will be key to watch. We have not commented on gold much lately because its relentless march upwards has caused it to lose its correlative value, but will note that gold is testing all time highs in both the Canadian Dollar and the Euro, which makes for a natural resistance level.
Medium Term Analysis: We wrote late last week that longs would want to push to new highs ahead of tomorrow’s GDP revision and Durable Goods on Wednesday. Tomorrow also features Consumer Sentiment and the FOMC Minutes. Currently, the ES is up just over 1% in overnight trading. Given the bullish tendency of the US Thanksgiving holiday week, new highs today are still a possibility by GDP tomorrow. Of the 14 days in the 2009 rally where the overnight market has been up > 1%, 4 were reversed strongly and closed below the day session open. Accordingly, the reaction to today’s only major news item at 10:00 am should be monitored closely to see how the day will unfold.
Trading Today: We would be early buyers down to strong support from 1095.00 to 1096.75, which includes Friday’s combined session high, the weekly pivot, combined session R1 and day-session-only R2. There is still decent support from Friday’s day-session-only high and R1 from 1092.75 to 1093.50, but the ES will have given up a bit too much of its gains for…
12:44 pm EDT: Have not updated yet because not much has changed. Leaders are hugging support/resistance levels we’ve been watching and the ES is not moving. The overnight low has held, so we are mildly intraday and still medium term bullish. Often on opex days there is a rally from 3:00 to 3:30 pm and a sell off from 3:45 to 4:00 pm.
The ES sold off early at one tick below yesterday’s closing VWAP of 1093.00 (as measured on the 30 minute–closing VWAP measured on the more precise 1 minute chart was the actual morning high of 1092.75). The benefit of following closing VWAP, yesterday’s market profile point of control, day-session-only pivot, combined session pivot, 4:00 close and official 4:15 settlement, is that a few of them often cluster together and give a good entry or exit range.
