Wednesday, 1 February 2012

Invest Point Market Trend Sell: Sell From High

FEB 01 2012
Market Trend Sell:
              Sell From High.

Trade Idea: USD/JPY – Buy at 76.05PrintE-mail
 Feb 01 12
USD/JPY – 76.23
Most recent candlesticks pattern   : N/A
Trend                              : Down
Tenkan-Sen level              : 76.23
Kijun-Sen level                   : 76.28
Ichimoku cloud top                : 76.82
Ichimoku cloud bottom            : 76.38
Original strategy : 
Buy at 76.05, Target: 77.05, Stop: 75.70
Position: -
Target:  -
New Strategy  :   
Buy at 76.05, Target: 77.05, Stop: 75.70
Position: -
Target:  -
Although the greenback has remained under pressure and near term downside risk remains for recent decline to extend marginal weakness, however, loss of near term downward momentum should prevent sharp fall below 76.00 and reckon 75.70/75 would hold from here, risk from there is seen for a strong rebound to take place later this week.
In view of this, we are inclined to buy dollar on next decline. a sustained breach above previous support at 76.65 would bring a stronger rebound to 76.82-87 (current level of the Ichimoku cloud top and another previous support) but break there is needed to signal low is possibly formed, then stronger rebound to 77.15-20 would be seen later but reckon upside would be limited to 77.75-80. Below 75.70 would risk one more fall to 75.50, however, still reckon the record low of 75.31 would remain intact, bring another rebound later.

Trade Idea: EUR/USD – Target met and look to sell again on recoveryPrintE-mail
 Feb 01 12 
EUR/USD – 1.3038

Most recent candlesticks pattern : N/A
Trend     : Near term up
Tenkan-Sen level               :1.3062
Kijun-Sen level                 :1.3123
Ichimoku cloud top              :1.3153
Ichimoku cloud bottom          :1.3150
Original strategy : 
Sold at 1.3180, met target at 1.3080
Position: - Short at 1.3180
Target:  - 1.3080
New strategy  :  
Look to sell again on recovery
Position: -
Target:  -
The single currency ran into renewed selling interest at 1.3213 and tumbled from there in line with our expectations, our short position entered at 1.3180 met indicated target at 1.3080 (with 100 points profit) and the breach of indicated support at 1.3077 reinforces our view that top has been formed at 1.3233, hence consolidation with downside bias is seen for retracement of recent rise from 1.2624 to 1.3000 (38.2% Fibonacci retracement of 1.2624-1.3233) and possibly to 1.2970, however, reckon 1.2929-31 (50% Fibonacci retracement and previous support) should hold on first testing.
As we have taken profit on our short position, would not chase this decline here and we prefer to sell euro again on recovery. Above 1.3091 would bring rebound to the Kijun-Sen (now at 1.3123) but upside should be limited to the Ichimoku cloud (now at 1.3150-53).

Trade Idea: USD/CHF – Target met and buy again at 0.9170PrintE-mail
 Feb 01 12 
USD/CHF - 0.9242
Most recent candlesticks pattern    : N/A
Trend                                    : Near term down
Tenkan-Sen level                       :0.9223
Kijun-Sen level                     :0.9187
Ichimoku cloud top                     :0.9174
Ichimoku cloud bottom                 :0.9163
Original strategy : 
Bought at 0.9140, met target: at 0.9240
Position: - Long at 0.9140
Target:  - 0.9240
New strategy  :  
Buy again at 0.9170, Target: 0.9280, Stop: 0.9135
Position: -
Target:  -
Despite yesterday’s initial fall to 0.9123, the subsequent anticipated rebound has justified our bullishness (our long position entered at 0.9140 met indicated target at 0.9240 with 100 points profit), the subsequent breach of 0.9228-36 resistance adds credence to our view that temporary low has been formed at 0.9112 and consolidation with upside bias remains for retracement of recent decline to 0.9289 (38.2% Fibonacci retracement of 0.9575-0.9112) but reckon resistance at 0.9340 would limit upside and price should falter well below 0.9393, bring another decline.
As we have taken profit on our long position, we are looking to buy dollar again on pullback as the Ichimoku cloud (now at 0.9163-74) should limit downside and bring another rebound. Only below said support at 0.9112 would abort and signal recent decline from 0.9595 top is still in progress and extend weakness to 0.9080 but reckon 0.9140 (61.8% projection of 0.9575-0.9236 measuring from 0.9340) would hold, bring another rebound later.

Morning Call: Global stocks gain after EU leaders agreed to tighter budget controls; Mar S&Ps up +5.40; Mar crude up +$1.40 a barrel. Morning Call for Tuesday, January 31, 2012
Overnight Developments
  • Global stocks this morning are mostly higher with the Euro Stoxx 50 up +0.80% and Mar S&Ps up +5.40 points. The dollar index fell to a 1-1/2 month low while Treasuries and commodities weakened after EU leaders completed a fiscal-discipline treaty that speeds sanctions on high-deficit countries and requires members to enact laws to limit budget shortfalls. Policy makers also decided to bring the region's permanent bailout fund, the European Stability Mechanism, into operation on July 1, a year before schedule. The euro rose against the dollar after Greek Prime Minister Papademos said he's "strongly committed" to reaching a debt-swap pact with bondholders. Yields on Portuguese bonds fell after Prime Minister Coelho said his country's debt has been judged "perfectly sustainable" by the EU and IMF and that there is no risk of writedown on the bonds. Another positive for stocks was the -34,000 drop in Jan German unemployment, bigger than expec tations of a -10,000 decline, while the Jan German unemployment rate unexpectedly dipped -0.1 to 6.7%, the lowest since data for a reunified Germany began in 1991. On the negative side, the Dec Euro-Zone unemployment rate remained unchanged at a 13-3/4 year high of 10.4%, while Dec German retail sales unexpectedly fell -1.4% m/m and -0.9% y/y, weaker than expectations of an increase of +0.8% m/m and +0.9% y/y with the -1.4% m/m drop the biggest monthly decline in 2-1/2 years.
  • Asian stocks today closed mostly higher with Japan up +0.11%, China +0.14%, Australia -0.24%, South Korea +0.66%, India +1.96%. The yen fell back from a 3-month high against the dollar and lifted Japanese export stocks after Japanese Finance Minister Azumi told reporters that "we are ready to act decisively against excessive and speculative currency moves if needed." Japanese stocks finished higher as optimism rose that European leaders will find a resolution to the region's debt crisis and after Dec Japan industrial production jumped +4.0% m/m, bigger than expectations of +3.0% m/m and the biggest monthly increase in 7 months. Chinese stocks closed higher and received a boost from a Securities Times article that said China may announce methods for local pensions to invest in the stock market as soon as the first quarter with as much as 30% of pension assets, or about 580 billion yuan ($91.6 billion) allowed for stock investments.

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Overnight U.S. Stock News
  • March S&Ps this morning are trading up +5.40 points. The US stock market on Monday fell back and settled lower on concern the European sovereign-debt crisis may worsen along with concern U.S. economic growth may weaken after consumer spending stalled in Dec: Dow Jones -0.05%, S&P 500 -0.25%, Nasdaq Composite -0.16%. The S&P 500 and the Dow posted 1-1/2 week lows. Bearish factors on Monday included (1) carry-over weakness from a slide in European stocks on concern the region's debt crisis may worsen after Portugal's 10-year bond yield rose to a euro-era record of 17.39% and as Greece debt-swap talks remain unresolved, (2) the unexpected stagnation in Dec U.S. personal spending (unchanged m/m versus expectations of +0.1%), and (3) weakness in energy and raw material producers as a strong dollar fueled a decline in most commodities.
  • Bullish factors included (1) the larger-than-expected increase in Dec personal income which posted its biggest gain in 9 months (+0.5% versus expectations of +0.4%), (2) the fall in the 10-year T-note yield to a 1-1/4 month low of 1.811%, and (3) decent Q4 earnings results thus far as 66% of the 170 companies in the S&P 500 that reported earnings results since Jan 9 have beaten analysts' estimates.
  • Hologic (HOLX) climbed 7.1% in pre-market trading after the company raised its 2012 profit forecast to as much as $1.38 a share, higher than analysts' estimates of $1.36.

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Today's Market Focus
  • March 10-year T-notes this morning are down -6.5 ticks. T-note prices on Monday posted a fresh contract high for a second day and settled higher on increased safe-haven demand from the European debt crisis along with concern U.S. economic growth may slow after Dec personal spending unexpectedly stagnated: TYH2 +10.0, FVH2 +2.5, EDM2 unchanged. The 10-year T-note yield fell to a 1-1/4 month low of 1.811%. Bullish factors included (1) the unexpected stagnation in Dec U.S. personal spending (unchanged m/m versus expectations of +0.1%), and (2) increased safe-haven demand for Treasuries on concern the European debt crisis may worsen after Portugal's 10-year bond yield rose to a euro-era record of 17.39% and as Greece debt-swap talks remain unresolved. Bearish factors included (1) the larger-than-expected increase in Dec personal income which posted its biggest gain in 9 months (+0.5% versus expectations of +0.4%) and (2) hawkish comments from Philadelphia Fed Preside nt Plosser who said the Fed may have to raise interest rates this year and that last week's post-FOMC statement to keep rates near zero through late 2014 "isn't a firm commitment."
  • The dollar index this morning is weaker and at a fresh 1-1/2 month low with the dollar/yen +0.04 yen and the euro/dollar +0.46 cents. The dollar index on Monday rallied and settled higher as the euro weakened on concern the European sovereign debt crisis may worsen after Portuguese government bond yields soared to a euro-era record and Greece debt-swap talks remain unresolved: Dollar Index +0.265, USDJPY -0.333, EURUSD -0.00752. Bullish factors included (1) increased safe-haven demand for the dollar after Portugal's 10-year bond yield rose to a euro-era record of 17.39% on concern investors will have to take losses on their Portuguese bond holdings in the wake of a Greek debt deal, (2) the unresolved Greek debt-swap talks and the report from Der Spiegel that a second Greek bailout now requires 145 billion euros, 15 billion euros more than was agreed to in Oct, and (3) weak demand for Italian government debt after Italy sold 7.5 billion euros of debt due between 2016 an d 2022, less than its maximum target of 8 billion euros. Bearish factors Monday included (1) the weaker-than-expected Dec U.S. personal spending, which bolsters concern that economic growth may slow and is dollar negative and (2) concern the foreign exchange market is too one-sided against the euro, which may fuel short covering after CFTC data showed large traders increased their short positions in the euro to a record for the fifth consecutive week as euro short positions climbed to a record 171,347 as of Jan 24.
  • Mar crude oil prices this morning are up +$1.40 a barrel and Mar gasoline is +1.86 cents per gallon. Crude oil and gasoline prices on Monday fell back and settled lower as the dollar strengthened, stocks fell and concerns grew that Greek debt-swap talks will falter and lead to default, which may weaken the European economy: CLH12 -$0.78, RBH12 -5.07. Bearish factors included (1) strength in the dollar, which discourages investment demand in commodities, (2) the slump in the S&P 500 to a 1-week low, which reduces confidence in the economic outlook and energy demand, (3) concern that Greek bailout negotiations will falter and lead to a Greek default, which may slow European economic growth and fuel demand, (4) the weaker-than-expected Dec U.S. personal spending, which bolsters concern that economic growth and fuel demand will slow, and (5) comments from OPEC Secretary General Abdalla El-Badri who said global oil markets are "very well supplied." Bullish fa ctors included (1) comments from the United Steelworkers Union that strikes at U.S. oil refineries may be imminent as negotiations near a Feb 1 deadline, which would reduce U.S. gasoline supplies and (2) the report from the Fars news agency that said Iran's parliament drafted legislation calling for the government to halt oil exports to Europe until the EU cancels its planned ban on Iranian crude.

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Today's U.S. Earnings Reports
Earnings reports (confirmed releases, sorted by mkt cap): XOM-Exxon Mobil (BEST earnings consensus $1.98), PFE-Pfizer (0.47), (0.47), UPS-United Parcel Service (1.26), BIDU-Baidu (0.89), LLY-Eli Lilly (0.81), DHR-Danaher (0.78), BIIB-Biogen Idec (1.49), ITW-Illinois Tool Works (0.88), ACE-ACE Ltd. (1.78), AFL-Aflac (1.51), TYC-Tyco International Ltd. (0.79), ADM-Archer-Daniels-Midland (0.76), BRCM-Broadcom (0.65), VLO-Valero Energy (-0.11), MAT-Mattel (1.00).

Global Financial Calendar
Tuesday 1/31/12
United States
0745 ETICSC (Int’l Council of Shopping Centers) weekly retailer sales.
0830 ETQ4 employment cost index expected +0.4%, Q3 +0.3%.
0855 ETRedbook weekly retailer sales.
0900 ETNov S&P/CaseShiller composite-20 home price index expected -0.4% m/m and -3.3% y/y, Oct -0.6% m/m and 3.4% y/y.
0945 ETJan Chicago purchasing managers index expected +0.5 to 63.0, Dec -0.1 to 62.5.
1000 ETJan U.S. consumer confidence (Conference Board) expected +3.5 to 68.0, Dec +9.3 to 64.5.
1130 ETWeekly 4-week T-bill auction.
0000 ETDec Japan construction orders, Nov +21.0% y/y.
0000 ETDec Japan housing starts expected -1.5% y/y, Nov -0.3% y/y.
2030 ETDec Japan labor cash earnings expected -0.4% y/y, Nov -0.2% y/y.
0200 ETDec German retail sales expected +0.8% m/m and +0.9% y/y, Nov -1.0% m/m and +0.8% y/y.
0355 ETJan German unemployment change expected -10,000, Dec -22,000. Jan unemployment rate expected unchanged at 6.8%, Dec -0.1 to 6.8%.
0245 ETDec French producer prices expected -0.1% m/m and +4.7% y/y, Nov +0.4% m/m and +5.6% y/y.
0245 ETDec French consumer spending expected +0.2% m/m and -2.1% y/y, Nov -0.1% m/m and -2.1% y/y.
United Kingdom
0430 ETDec U.K. net consumer credit expected +0.4 billion pounds, Nov +0.4 billion pounds.
0430 ETDec U.K. mortgage approvals expected +54,000, Nov +52,900.
0430 ETDec U.K. M4 money supply, Nov -0.6% m/m and -2.6% y/y.
0500 ETDec Euro-Zone unemployment rate expected +0.1 to 10.4%, Nov unchanged at 10.3%.
0830 ETDec Canada industrial product prices, Nov +0.2% m/m. Dec raw materials price index, Nov +3.8% m/m.
0830 ETNov Canada GDP expected +0.2% m/m, Oct unchanged m/m and +2.7% y/y.
2000 ETJan China PMI manufacturing expected -0.7 to 49.6, Dec +1.3 to 50.3.
Morning Quote Board
Morning Quotes (ET)LastChg%chgUpdated
US Stock Futures
S&P (Globex) (H2)1314.305.400.41%7:07:12 AM
DJIA (CBOT) (H2)12658560.44%7:05:22 AM
European Stocks
Europe DJ Stoxx 502428.4419.210.80%7:02:15 AM
London UK FTSE Index5710.8539.760.70%7:02:15 AM
German Dax Index6505.8261.370.95%7:02:15 AM
French CAC 40 Index3307.2141.571.27%7:02:15 AM
Asian-Pacific Stocks
Japan Nikkei Index880390.11%1:28:01 AM
Hong Kong Hang Seng203902301.14%3:01:30 AM
China CSI 300 Index246440.14%2:01:21 AM
Taiwan TAIEX Index75171101.48%12:46:00 AM
Australian S&P 2004262.68-10.06-0.24%12:19:59 AM
Singapore Str. Times2906.6918.40.64%4:10:01 AM
South Korea KOSPI 200256.91.690.66%4:05:17 AM
Bombay Sensex 3017194330.251.96%7:17:13 AM
Karachi KSE-10011875-8-0.07%6:57:02 AM
US Interest Rates
10yr T-notes (CBT)(H2)131.265-0.065-0.15%7:07:00 AM
Cash 10yr T-note Price101.050-0.075-0.23%7:17:06 AM
Cash 10yr T-note Yield1.8700.0261.42%7:17:06 AM
5yr T-note (CBT)(H2)123.285-0.030-0.07%7:07:01 AM
Cash 5yr T-note Price100.195-0.025-0.08%7:17:06 AM
Cash 5yr T-note Yield0.7520.0162.15%7:17:06 AM
30-yr T-bond (CBT)(H2)144.03-0.170-0.37%7:07:07 AM
Cash 30yr T-bond Price102.025-0.125-0.38%7:17:11 AM
Cash 30yr T-bond Yield3.0190.0200.66%7:17:11 AM
Eurodollars (CME)(H2)99.5450.0200.02%7:03:53 AM
Eurodollars (CME)(M2)99.5300.0150.02%7:06:54 AM
Asian & European Rates
10-yr JGBs (TSE) (H2)142.59-0.08-0.06%1:02:00 AM
Bunds (Eurex) (H2)139.34-0.33-0.24%7:01:26 AM
Euribor (Eurex) (H2)
UK Gilts (Liffe) (H2)116.76-0.24-0.21%7:02:14 AM
Short Stlg (Liffe) (H2)98.990.000.00%6:59:07 AM
U.S. Dollar Index78.8710-0.2540-0.32%7:07:11 AM
US Dollar-Japanese Yen76.39000.04000.05%7:17:15 AM
EuroFX-US Dollar1.31900.00460.35%7:17:15 AM
US Dollar-Swiss Franc0.9133-0.0037-0.40%7:17:15 AM
British Pound-US$1.57850.00750.48%7:17:15 AM
US$-Canadian Dlr0.9974-0.0041-0.41%7:17:15 AM
Yen (Globex) (H2)1.3095-0.0018-0.14%7:07:05 AM
Euro FX (Globex) (H2)1.31840.00600.46%7:07:13 AM
SwissFranc (Globex)(H2)1.09510.00560.51%7:07:13 AM
British Pound(Glbx)(H2)1.57760.00850.54%7:07:14 AM
Canadian$ (Globex)(H2)1.00110.00510.51%7:07:14 AM
Gold (Comex) (G2)1735.44.40.25%5:37:11 AM
Silver (Comex) (H2)33.5500.0230.07%7:06:56 AM
Copper (Comex) (H2)386.33.70.95%7:07:13 AM
Crude Oil (Nymex) (H2)100.181.401.42%7:07:08 AM
Gasoline (Nymex) (H2)289.131.860.65%7:06:01 AM
Heating Oil(Nymex) (H2)307.73.921.29%7:07:06 AM
NaturalGas(Nymex)(H2)2.617-0.096-3.54%7:07:14 AM
Corn (CBOT) (H2)639.007.251.15%7:06:18 AM
Soybeans (CBOT) (H2)1189.504.250.36%7:07:02 AM
Wheat (CBOT) (H2)654.7510.001.55%7:06:59 AM

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