TheStrategyLab.com Price Action Trading Support Forum

Trade Results of M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)

click on the above image to view today's trading summary

Trade Performance for Today: +16.60 points or $1660.00 dollars in the Russell 2000 Emini TF ($TF_F) Futures.
Russell 2000 Emini TF Futures - 1 tick or 0.10 = $10.00 dollars and there's more contract information @ The ICE.
S&P 500 Emini ES Futures - 1 tick or 0.25 = $12.50 dollars and there's more contract information @ CMEGroup.

In addition, today's #FuturesTrades trading chat room logs provides details about each trade from entry to exit along with commentary as the trade traversed...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=90&t=849.

Also, posted below are direct links to information about my trade methodology and trading plan (there's a difference between the two) that enables me to identify key trading areas in the price action that represent changes in supply/demand and volatility along with being able to exploit these changes via WRB Analysis (wide range body/bar analysis).

WRB Analysis Tutorials @ http://www.thestrategylab.com/WRBAnalysisTutorials.htm and there's a free study guide of the WRB Analysis Tutorial Chapters 1, 2 and 3 @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=5&t=180.

Volatility Trading Report (VTR) @ http://www.thestrategylab.com/VolatilityTrading.htm and there's a free trade signal strategy @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=89 so that you can freely test drive one of our trade strategies with support prior to purchasing the Volatility Trading Report (VTR).

Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=138&t=1058

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Market Summaries

The below summaries by Bloomberg, CNNMoney and Yahoo! Finance helps me to do a quick review of the fundamentals, FED actions, global economics that had an impact on today's price action. Simply, I'm a strong believer that many variables causes key changes in supply/demand and volatility that's arguably just as important as my technical analysis.

Bloomberg (YouTube Video) - Stocks Fall on Hewlett-Packard Forecast, Housing Data

May 17 (Bloomberg) -- Bloomberg's Cali Carlin reports on the performance of the U.S. equity market today. U.S. stocks retreated, sending benchmark indexes to one-month lows, as a reduced sales forecast at Hewlett-Packard Co. and an unexpected decline in housing starts damped optimism about the economic recovery.

CNNMoney.com - Stocks Bounce Off Lows

click on the above image to view today's price action of key markets

By Ken Sweet, contributing writer
May 17, 2011: 5:53 PM ET

NEW YORK (CNNMoney) -- Stocks closed mixed on Tuesday as investors digested a weak outlook from Hewlett-Packard, a grim read on the housing market and an unexpected drop in April industrial production.

Despite those negative factors, stocks ended the session well off the lows set earlier in the day.

The Dow Jones industrial average (INDU) lost 69 points, or 0.6%, to close at 12,780. The Dow was down more than 150 points earlier in the day.

The blue chips were dragged lower by a 7% drop in shares of Hewlett-Packard (HPQ, Fortune 500). The PC maker reported a 3% increase in sales but warned the current quarter will be hurt by the Japanese quake impact and weak PC sales.

The broader market indexes closed relatively flat, with the Nasdaq Composite (COMP) rising 1 points, or less than 0.1%, to 2,783; and the S&P 500 (SPX) falling less than a point to end at 1,329.

The negative HP news as well as two disappointing economic reports kept investors on edge.

On Tuesday, the Commerce Department said housing starts plunged a worse-than-expected 10.6% in April, while the Federal Reserve said industrial production was flat in April due in part to the Japanese earthquake. Economists were looking for a gain in the industrial production figures.

"There's a lot of negative sentiment in the market at the moment," said Stephen Carl, head trader with Williams Capital.

Shares of raw materials and construction companies were also dragged lower, with Caterpillar (CAT, Fortune 500) shares falling 4% and Cummins (CMI, Fortune 500) and Alcoa (AA, Fortune 500) shares falling 3%.

Financial shares were among Tuesday's top performers, led by JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500), Capital One Financial (COF, Fortune 500) and USBancorp (USB, Fortune 500).

After stocks and commodities hit multi-year highs last month, trading has been volatile the past two weeks. Commodities such as oil and silver have fallen sharply while stock investors wait for the conclusion of the Federal Reserve's bond-buying program at the end of June. The Dow is down more than 2.5% so far this month.

"The market is not turning actively defensive, but we may be close to a market top because people don't want to go into this market with the end of quantitative easing," said Bruce McCain, chief investment strategist at Key Private Bank.

The major indexes are on track for the fourth day of declines in five sessions.

U.S. stocks ended lower Monday as investors focused on oil prices and the debt crisis in Europe.

Companies: Dell (DELL, Fortune 500) shares jumped 4% in aftermarket action after the company reported an adjusted profit of 49 cents a share. Dell's earnings came in well ahead of analysts' estimates, who were looking for 44 cents a share.

Dow component Wal-Mart Stores (WMT, Fortune 500) reported quarterly income of $3.4 billion and sales of $103 billion compared with last year, topping analysts' estimates. However shares of Wal-Mart were down 1%.

Home Depot (HD, Fortune 500) beat forecasts with earnings per share of 50 cents as sales edged lower to $16.8 billion. The profit helped Home Depot shares rise 1%, making it one of the Dow's best performers.

Results from Dell (DELL, Fortune 500) are due after the closing bell. The company is expected to earn 43 cents per share.

Currencies and commodities: The dollar fell against the euro and the British pound but rose 1% against the Japanese yen.

Oil for June delivery slipped 46 cents, or 0.5%, to settle at $96.91 a barrel.

* George Soros dumps $800 million gold stake

Gold futures for June delivery fell $8.10, or 0.5%, to $1,482.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury ticked higher, pushing the yield down to 3.14% from 3.15% late Monday.

World markets: European stocks closed as investors digested a 4.5% rise in U.K.'s inflation rise, much more than expected.

Britain's FTSE 100 fell 1.1%, the DAX in Germany slid 1.8% and France's CAC 40 fell 1.2%.

Asian markets ended mixed after trading in a narrow range. The Shanghai Composite gained 0.1%, the Hang Seng in Hong Kong slipped 0.3%, and Japan's Nikkei was unchanged.



Yahoo! Finance - Market Update

4:15 pm : Participants pared risk for the first part of the session, but a downturn by the dollar and strength among financials gradually boosted the broader market. Stocks were snared at the neutral line, though.

Selling pressure took stocks down markedly at midday. The drop actually put all three major equity averages at lowest level in almost a month. That stirred interest in Treasuries, such that the yield on the benchmark 10-year Note fell to a 2011 low around 3.10%.

Tech stocks were hit with some of the hardest selling interest. The sector slid to a loss of more than 1% as shares of Hewlett-Packard (HPQ 36.85, -2.94) dropped precipitously to a new 52-week low following a disappointing forecast, which completely overshadowed the company's upside earnings surprise for the latest quarter. The tech sector later cut its loss in afternoon trade; it finished just 0.2% lower for the day.

HP shares also took a heavy toll on the Dow, which lagged its counterparts for just about the entire day. Wal-Mart (WMT 55.54, -0.52) also weighed to the Blue Chip Index, although the company reported better-than-expected earnings for the latest quarter.

Data didn't do anything to motivate buying interest. April Industrial production was just posted. It was flat in the face of calls for a 0.5% increase. Capacity Utilization came in at 76.9%, which is less than the 77.7% that had been expected, on average, among economists surveyed by Briefing.com.

Housing starts for April hit an annualized rate of 523,000, but that is less than the rate of 563,000 units that had been expected, on average, among economists polled by Briefing.com. The April rate is also down from the prior month's rate of 585,000 units. Building permits fell to an annualized rate of 551,000 from 574,000 permits, but economists polled by Briefing.com had expected a rate closer to 590,000 permits.

The news hurt shares of homebuilders, which collectively fell to a 1.3% loss, according to the PHLX Housing Sector Index. However, home improvement retailer Home Depot (HD 37.40, +0.42) put together a strong gain following its latest quarterly report, which featured a better-than-expected bottom line.

Stocks gradually worked their way higher in afternoon action. The advance was helped along by a downturn the dollar, which fell to a 0.3% loss against a basket of major foreign currencies.

Financials were a source of leadership late in the day. The sector's 0.7% gain was largely owed to a bounce by bank stocks, which lifted the KBW Bank Index a 1.5% gain. Strength among financials comes after the sector had lagged last week.

Even though financials offered to lead the market higher and the dollar ended the day at its session low, buying lost momentum once the Nasdaq and S&P 500 came in contact with the neutral line. That left the two averages to trade sideways for the final hour of the day.

Advancing Sectors: Financials (+0.7%), Utilities (+0.7%), Consumer Staples (+0.3%), Telecom (+0.3%), Consumer Discretionary (+0.1%)
Unchanged: Health Care
Declining Sectors: Energy (-0.2%), Tech (-0.2%), Materials (-1.1%), Industrials (-1.3%)DJ30 -68.79 NASDAQ +0.90 NQ100 +0.2% R2K -0.3% SP400 -0.7% SP500 -0.49 NASDAQ Adv/Vol/Dec 1063/2.20 bln/1538 NYSE Adv/Vol/Dec 1306/930 mln/1772

3:30 pm : Trade in commodities was largely driven by movement in the dollar today. June crude oil settled lower by 0.5% to $96.91 per barrel. Earlier in the session, prices traded below the $96 support level to notch lows at $95.02. However a pullback in the dollar helped crude oil rebound off those lows to recoup most of its losses. June natural gas finished lower by 3.2% to $4.18 per MMBtu. It sold off to session lows at $4.16 in mid-morning trade and spent the remainder of the session chopping around those lows.

June gold finished lower by 0.7% to $1479.80 per ounce, while July silver shed 1.6% to end at $33.56 per ounce. Both metals sold off in morning trade as the dollar pushed higher. After trading to their respective lows, both metals were able to bounce modestly off of their respective lows to recoup some losses. DJ30 -82.76 NASDAQ -1.15 SP500 -2.27 NASDAQ Adv/Vol/Dec 1072/1.8 bln/1503 NYSE Adv/Vol/Dec 1262/685.5 mln/1785

3:00 pm : Despite the choppy nature of recent trade, both the S&P 500 and Nasdaq are attempting to push toward the neutral line. The effort has the two indices at afternoon highs. The Dow continues to trail as it trades with a modest loss.

Stocks have been helped by continued weakness in the dollar. The greenback now trails a basket of major foreign currencies by 0.3%. DJ30 -60.43 NASDAQ -0.65 SP500 -0.40 NASDAQ Adv/Vol/Dec 916/1.65 bln/1648 NYSE Adv/Vol/Dec 1036/621 mln/2001

2:30 pm : Sellers have challenged the stock market's recent upturn. Their efforts have kept the major equity averages in negative territory.

The dollar has drifted down to an afternoon low, however. Its weakness is largely the result of a bounce by the euro, which is now up 0.5% to $1.422.

Commodities have responded positively to the dollar's downturn. As such, the CRB Commodity Index is now down only 0.1% for the day. DJ30 -101.26 NASDAQ -10.86 SP500 -4.79 NASDAQ Adv/Vol/Dec 973/1.53 bln/1595 NYSE Adv/Vol/Dec 1105/575 mln/1898

2:00 pm : The stock market continues to slowly cut its loss. The effort has taken it to an afternoon high.

Financials are offering some of the most leadership. The sector is now up 0.5%. Bank stocks were laggards early, but they have since bounced back to provide a lift to the financial space. As a group, bank stocks are up 1%, based on the KBW Bank Index. DJ30 -88.09 NASDAQ -7.81 SP500 -3.29 NASDAQ Adv/Vol/Dec 954/1.42 bln/1580 NYSE Adv/Vol/Dec 959/525 mln/1996

1:30 pm : Stocks are trimming losses, but they still have a ways to go before they can attempt to claim a gain. The upturn comes as the dollar dips back into negative territory so that it now trails a basket of major foreign currencies by about 0.1%.DJ30 -103.19 NASDAQ -8.80 SP500 -4.34 NASDAQ Adv/Vol/Dec 910/1.90 bln/1637 NYSE Adv/Vol/Dec 834/480 mln/2097

1:00 pm : Stocks are off of their session lows, but renewed selling has the market down for another day. Pressure comes as participants further pare risk.

Selling interest from the prior session has carried over into today's trade. The negative bias comes after Europe's major bourses retreated deeper into the red following news of a couple of disappointing economic surveys and a sharp increase in consumer prices throughout the United Kingdom.

Domestic data featured April building permits and housing starts, both of which failed to meet what had been expected. April Industrial production also failed to match the consensus forecast while capacity utilization was a bit low, too.

Stocks attempted a mid-morning bounce, but both the S&P 500 and the Nasdaq encountered resistance at the neutral line. They then descended to their lowest intraday levels in nearly a month.

Of the three major averages, the Dow has been in the worst shape. It has been weighed down by a dramatic drop in shares of Hewlett-Packard (HPQ 36.53, -3.27) to a new 52-week low following the company's downside guidance.

Wal-Mart (WMT 55.42, -0.64) has also been a source of weakness for the Dow. Participnts have shrugged off its better-than-expected bottom line.

Home Depot (HD 37.26, +0.28) had an upside earnings surprise of its own. Although its top line was relatively light, the stock has still traded with strength.

Broad market selling this session comes even though the dollar has spent most of the day near the neutral line. The action reflects a shift in the mindset of many traders toward something more pessimistic.

Moreover, commodities have also come under pressure today. Their collecive weakness has the CRB Commodity Index down 0.5%. It set a new multi-month low earlier today. Within the commodity complex, oil prices are down 1.5% to $95.85 per barrel, which puts it back near its three-year low. DJ30 -136.99 NASDAQ -14.82 SP500 -7.45 NASDAQ Adv/Vol/Dec 960/1.18 bln/1557 NYSE Adv/Vol/Dec 851/438 mln/2056

12:30 pm : An upside earnings surprise has helped shares of Home Depot (HD 37.34, +0.36) move higher in the face of broad market weakness. Just yesterday, primary competitor Lowe's (LOW 24.83, -0.01) posted a disappointing quarterly report.

Action among the home improvement retailers follows a disappointing report on new housing starts and building permits. That has caused weakness in homebuilders. In turn, the PHLX Housing Sector Index is down 1.1%. DJ30 -117.95 NASDAQ -14.36 SP500 -6.52 NASDAQ Adv/Vol/Dec 869/1.03 bln/1641 NYSE Adv/Vol/Dec 794/390 mln/2105

12:00 pm : Amid the stock market's slide, Treasuries have made a solid turn higher. In turn, the yield on the benchmark 10-year Note is now at 3.10%, which makes for a 2011 low.

Google (GOOG 525.90, +7.48) announced this morning that it has priced a public offering of $3 billion aggregate principal notes, consisting of $1 billion notes due in 2014 with a 1.25% rate, $1 billion of notes with a 2.125% rate, that are due in 2016, and $1 billion notes with a 3.625% rate due in 2021.DJ30 -122.08 NASDAQ -16.39 SP500 -7.10 NASDAQ Adv/Vol/Dec 780/920 mln/1696 NYSE Adv/Vol/Dec 708/345 mln/2184

11:30 am : A sell-off in shares of Hewlett-Packard (HPQ 36.12, -3.70) in the wake of a disappointing forecast has taken the stock to a new one-year low. What's more, its weight has dragged the Dow down sharply so that its loss is double that of the S&P 500.DJ30 -133.50 NASDAQ -15.83 SP500 -7.05 NASDAQ Adv/Vol/Dec 831/795 mln/1624 NYSE Adv/Vol/Dec 785/295 mln/2079

11:00 am : Stocks are on the backslide following a failed attempt to turn higher. For the second straight session the Nasdaq pared losses, but ran into resistance upon reaching the neutral line.

Tech stocks are still the primary culprits behind the Nasdaq's recent weakness. Semiconductor issues are among the weakest performing tech holdings; collectively, they are down 1%, as measured by the Philadelphia Semiconductor Index. DJ30 -84.46 NASDAQ -13.66 SP500 -4.60 NASDAQ Adv/Vol/Dec 919/545 mln/1475 NYSE Adv/Vol/Dec 993/213 mln/1805

10:35 am : The dollar index pulled back to the unchanged line minutes ago, which provided price strength to select commodities, including crude, gold and silver.

Crude oil lost steam and fell into the red about 8:15am EST and has remained there since. Despite the recent dollar-driven boost crude received, it remained under $97/barrel and is now down 0.6% at $96.77/barrel.

Natural gas sold off sharply about 30 minutes ago, which extended losses further. Natural gas is one of the worst performing commodities and is currently down 3.1% at $4.24/MMBtu.

Gold sold off right after pit trading opened, pulling it into negative territory and new session lows to $1476.00/oz. Gold is currently down 0.4% at $1484.20/oz. Silver was already on a downtrend ahead of pit trading, but still extended losses at the open and is now 1.2% lower at $33.74/oz.DJ30 -34.85 NASDAQ -1.59 SP500 +0.04 NASDAQ Adv/Vol/Dec 908/395.2 mln/1443 NYSE Adv/Vol/Dec 1018/159.1 mln/1718

10:00 am : The dollar is sporting a strong 0.8% gain against the yen, which was last quoted at 81.47 yen per dollar. However, the euro and pound have made a move against the greenback in recent trade. The euro was last quoted with a 0.2% gain at $1.417. The puond was last priced with a 0.1% gain at $1.622. That has pulled the Dollar Index back to the flat line.

Stocks have responded positively to the dollar's downturn. Energy stocks have actually made the best turnaround. The sector had been down about 1% in the opening minutes of trade, but it is now up to a fractional gain. DJ30 -48.25 NASDAQ -8.20 SP500 -1.43 NASDAQ Adv/Vol/Dec 665/159 mln/1551 NYSE Adv/Vol/Dec 707/79 mln/1928

09:45 am : The major equity averages are down with marked losses this morning. Tech continues to be a source of considerable weakness. The sector, which is the largest by market weight, is down 0.8%. Natural resource plays, like energy stocks (-0.6%) and materials stocks (-0.5%), have also been a burden on the broad market in the early going.

Financials, however, are showing strength for the second straight session; they are up 0.4% as a group. The sector's strength comes without help from bank stocks, which are collectively down 0.2%, according to the KBW Bank Index. DJ30 -57.74 NASDAQ -12.06 SP500 -3.23 NASDAQ Adv/Vol/Dec 528/45 mln/1574 NYSE Adv/Vol/Dec 479/38 mln/1924

09:20 am : S&P futures vs fair value: -4.40. Nasdaq futures vs fair value: -12.50. Stock futures suggest that the major equity averages will start today's session with a slight loss, which would extend yesterday's downturn. As was the case in the prior session, selling interest has come in response to renewed weakness in Europe and a bounce by the dollar.

Losses among Europe's major bourses follow news of a sharp increase in consumer prices throughout the United Kingdom and a decline in the latest ZEW Economic Sentiment readings of both Germany and the broader eurozone. Although the dollar is essentially flat against both the euro and the sterling pound, it has gained ground against Japan's yen. In turn, the Dollar Index is up to a 0.2% gain after it had been down modestly in early morning trade. That has also put some pressure on commodities, such that the CRB Commodity Index is now down 0.4%, which puts it at a new multi-month low.

Corporate news continues to do little to stoke buying interest. The latest round of quarterly reports featured an upside earnings surprises from Hewlett-Packard (HPQ), Wal-Mart (WMT), and Home Depot (HD), but none of them offered encouraging guidance.

As for domestic data, both building permits and housing starts were less than expected during April. April Industrial production was just posted. It was flat in the face of calls for a 0.5% increase. Capacity Utilization came in at 76.9%, which is less than the 77.7% that had been expected, on average, among economists surveyed by Briefing.com.

09:00 am : S&P futures vs fair value: -4.80. Nasdaq futures vs fair value: -10.80. Trade in Europe is generally weak today. As such, Germany's DAX is down 0.9%. The country's ZEW Economic Sentiment reading for May came in at 3.1, which is down from 7.6 in the prior month. Germany's ZEW Current Situation reading came in at 91.5 for May after a 87.1 reading in the prior month. France's CAC is currently off by 0.5%. Losses are broad, but Alcatel-Lucent (ALU) has been one of the heaviest drags on trade. However, Carrefour has put together an enviable gain after the retailer reportedly reaffirmed its forecast. Britain's FTSE has fallen to a 0.3% loss, but Vodafone (VOD) has been strong in the wake of its latest quarterly report. BP Plc (BP) has also garnered support, but its strength comes after the company failed to reach a share-swap agreement with Russia's Rosneft by its deadline. BP also announced that it has agreed to sell its interest in certain fields to Perenco UK Ltd. for up to $610 million in cash. As for data, the United Kingdom CPI for April increased by 1.0% after a 0.3% increase in March. Eurozone data featured a ZEW Economic Sentiment reading that came in at 13.6 for May. A reading for 19.7 had been posted for the prior month.

Overnight action in Asia was mostly mixed. Japan's Nikkei eked out a 0.1% gain. Shares of Tokyo Electric Power plummeted about 10% to log the worst loss of any stock. Analysts at Moody's hit the embattled company with a downgrade that took its long-term issuer rating to Baa3, which is only one notch above junk status. Nippon Paper Co. and Nomura Holdings were able to provide leadership to the broader market. In Hong Kong, the Hang Seng slipped to a 0.3% loss. Property stocks were among the weaker performers. China's Shanghai Composite mustered a mere gain of 0.1%. Yanzhou Coal Mining and China Shenhua Energy provided leadership. China reported that Actual foreign direct investment durin April increased by about 15%, which is less than the 33% spike that was witnessed in the same period one year ago.

08:35 am : S&P futures vs fair value: -3.20. Nasdaq futures vs fair value: -7.50. Stock futures have slipped some. Their downturn follows the latest data on housing starts and building permits. Housing starts for April came in at an annualized rate of 523,000, which is less than the rate of 563,000 units that had been expected, on average, among economists polled by Briefing.com. Starts for the prior month were revised upward to reflect an annualized rate of 585,000 units. As for building permits, they came in at an annualized rate of 551,000, which is less than the rate of 590,000 permits that had been broadly expected. The prior month's data were revised lower to reflect an annualized rate of 574,000 permits.

08:05 am : S&P futures vs fair value: -0.40. Nasdaq futures vs fair value: -2.30. Stocks slid to their lowest levels in almost a month during the prior session, but there hasn't been much follow through selling this morning. In turn, stock futures are flat relative to fair value. The greenback is also largely unchanged against a basket of major foreign currencies. Action abroad hasn't given much direction to follow. Overnight trade in Asia was mixed, and Europe's bourses are down modestly amid news that consumer prices picked up in the United Kingdom during April. Both Germany and the broader eurozone reported lower economic sentiment readings for April. A handful of heavyweights have issued earnings announcements. Hewlett-Packard (HPQ) reported ahead of schedule earnings that exceeded what Wall Street had expected, but the firm issued downside guidance. Wal-Mart (WMT) posted an upside earnings surprise of its own, but issued an in-line forecast. Home Depot (HD) also had a better-than-expected bottom line. It reaffirmed its sales forecast for the year. As for the economic calendar, the bottom of the hour brings the latest in housing starts. Industrial production will be posted at 9:15 AM ET.

06:42 am : [BRIEFING.COM] S&P futures vs fair value: +3.60. Nasdaq futures vs fair value: +4.50.

06:42 am : Nikkei...9567.02...+8.70...+0.10%. Hang Seng...22901.08...-59.60...-0.30%.

06:42 am : FTSE...5935.08...+11.40...+0.20%. DAX...7339.51...-48.00...-0.70%.

Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries.

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Price Action Trading (no technical indicators)
@ http://twitter.com/wrbtrader and http://stocktwits.com/wrbtrader

Phone: +1.708.572.4885
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