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 performance verification

Price Action Trade Performance for Today: +1.30 points or $130 dollars in the Russell 2000 Emini TF ($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, all trades were posted real-time in the free #TheStrategyLab chat room. You can read today's #TheStrategyLab trading chat room logs for details (e.g. time, price, contract size) about each one of my trades from entry to exit along with price action commentary as the trade traversed in comparison to what's shown in the above image...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=106&t=1276.

To join our free chat room...log-in instructions located at a different forum @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=5&t=630

Also, posted below are direct links to information about my price action 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=119&t=718.

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 price action 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=163&t=1526

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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/ECB/IMF actions or any important global economic events that had an impact on today's price action. Simply, I'm a strong believer that many variables (key market events) causes key changes in supply/demand and volatility that results in swing points and strong continuation price actions. Thus, I pay attention to these key market events from one trade to the next trade to give me the market context for my technical analysis. Just as important, these summaries becomes my archives to allow me to understand what was happening on any given trading day in the past...something I can not get from my broker statements alone.

Stocks 'Stuck In Limbo'


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

NEW YORK (CNNMoney) -- U.S. stocks held modest gains Thursday as investors weighed the latest corporate results against signs of economic weakness.

The advance came despite a rash of disappointing economic reports. Investors were encouraged by some better-than-expected corporate results, though the outlook for profits in the second half of the year is murky.

Analysts say the market's resiliency suggests investors are in a holding pattern, with a bias toward buying selective stocks, as they struggle with a lack of direction.

"The market is stuck in limbo until we get much better fundamental news or a more significant sell-off," said Bruce McCain, chief investment strategist at Key Private Bank. "It's like being poised on a ledge, halfway down the mountain, not sure if you're going up or down."

The Dow Jones industrial average (INDU) gained 34 points, or 0.2%, to end the day at 12,943. The S&P 500 (SPX) edged up 4 points, or 0.3%, to 1,376. The Nasdaq (COMP) advanced 23 points, or 0.8%, to 2,966.
Fear & Greed Index

IBM (IBM, Fortune 500) led gainers on the Dow. Big Blue reported quarterly earnings late Wednesday that beat analyst expectations and issued upbeat guidance. Shares were up nearly 4%.

Financial shares weighed on the index. Shares of American Express (AXP, Fortune 500) fell 3.5% after the company said Wednesday that earnings rose in the second quarter, although customer spending was weak.

After the market closed, Google (GOOG, Fortune 500) reported stronger-than-expected quarterly profits, although sales growth was below forecast. Microsoft (MSFT, Fortune 500) reported a quarterly loss, reflecting a $6.2 billion charge related to its online services department.

Investors had been bracing for a lackluster quarter, but the bulk of corporate results have come in above expectations.

Of the 77 S&P 500 companies that have reported earnings through Wednesday, 48 have topped forecasts, according to research from S&P Capital IQ.

"The market seems to be responding to corporate profits which are not a disaster," said Nick Kalivas, market strategist at investment research firm Hadrian Partners, in a note to clients.

* Related: 6 worst performing ETFs

Economy: The worrisome state of the economy may also be limiting gains for the broader market.

Initial jobless claims last week came in higher than expected, at 386,000. That was an increase of 34,000 from the previous week's revised figure.

The National Association of Realtors said sales of existing homes fell 5.4% to a seasonally adjusted annual rate of 4.37 million in June, from an upwardly revised 4.62 million in May. Analysts were expecting sales to come in at an annual rate of 4.65 million.

The Federal Reserve Bank of Philadelphia released its Business Outlook index, which showed manufacturing activity in the region remains weak so far this month. And after rising for two months in a row, the Conference Board's index of Leading Economic Indicators fell 0.3% in June to 95.6.

* Related: Mortgage rates fall to record low

"Today's U.S. reports revealed a wide array of downside disappointments," said Michael Englund, chief economist at Action Economics.

Earlier this week, Fed chair Ben Bernanke gave few hints about another round of stimulus, while cautioning that the outlook for the economy remains gloomy.

Companies: Tech firms reported mixed results Thursday. Nokia (NOK)'s stock rose even though the company reported a wider loss, and Verizon (VZ, Fortune 500) fell 2% even though it reported earnings in line with forecasts. Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) will release results after the closing bell.

Morgan Stanley (MS, Fortune 500), the last of the big banks to report quarterly results, missed earnings and revenue forecasts, sending shares down more than 5%.

eBay (EBAY, Fortune 500) was among the biggest gainers and most active stocks on the S&P 500. Shares of eBay surged more than 8% to a 6-year high after the online auction site reported earnings and revenue that topped forecasts, citing strong growth from PayPal.

Shares of Walgreen (WAG, Fortune 500) surged after the company finally reached a multi-year pharmacy network agreement with Express Scripts (ESRX, Fortune 500). Shares of Walgreen rivals CVS (CVS, Fortune 500) and Rite Aid (RAD, Fortune 500) both fell about 6%.

Safeway (SWY, Fortune 500) said net income in the second quarter fell nearly 16% as the grocery chain struggles to compete with big-box retailers. Shares fell 5%.

Shares of aeronautics and defense contractor Textron (TXT, Fortune 500) surged 11% after chief executive Scott Donnelly reportedly said the company is considering a number of acquisitions.

Five Below (FIVE), a teen-oriented discount retailer, surged 55% in its initial public offering.

World markets: European stocks closed higher. Britain's FTSE 100 (UKX) edged up 0.5%, the DAX (DAX) in Germany added 1% and France's CAC 40 (CAC40) gained 0.8%.

Spain sold €2.98 billion worth of two-, five- and seven-year notes but demand was weak, sending the yield on Spain's benchmark 10-year bond back above 7%.

Asian markets ended higher. The Shanghai Composite (SHCOMP) rose 0.7%, the Hang Seng (HSI) in Hong Kong climbed 1.7% and Japan's Nikkei (N225) gained 0.8%.

Currencies and commodities: The dollar gained ground against the euro, but fell versus the British pound and Japanese yen.

Oil for August delivery rose $2.79 to settle at $92.66 a barrel. Oil prices have not traded above $90 a barrel since late May.

Retail gasoline prices have also been on the rise. The national average price for a gallon of regular gas increased 1 cent to $3.437, according to a daily survey by AAA.

* Check gas prices in your state

Gold futures for August delivery rose $9.60 to $1,580.04 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.50% from 1.48% late Wednesday.



Market Update

4:15 pm : Stocks finished with modest gains despite this morning's disappointing economic data and slew of earnings reports that saw bottom line beats accompanied by top line misses. All of today's economic data fell short of expectations with initial and continuing claims, existing home sales, the Philadelphia Fed, and leading indicators all missing their marks. Technology shares were strong as the Nasdaq paced today's advance with a 0.8% gain. Meanwhile, the S&P 500 tacked on 0.3% to finish at a two-month high.

International Business Machines (IBM 195.34, +7.09) was a notable winner, rallying 3.8% and regaining its 200-day moving average as the stock was able to shake off a top line miss.

YUM! Brands (YUM 65.86, +0.31) was another example of the low second quarter expectations as erased early selling pressure and pushed back into positive territory. This despite a $0.03 miss on the bottom line. The company did outpace revenue expectations which appears to be enough to offset cost concerns at this point.

Morgan Stanley (MS 13.25, -0.74) was a notable underperformer after the firm missed on both the top and bottom lines.

Technology names eBay (EBAY 43.95, +3.49), Qualcomm (QCOM 58.44, +2.39), F5 Networks (FFIV 102.75, +4.16), Mellanox Technologies (MLNX 93.90, +27.52) and Skyworks Solutions (SWKS 29.17, +2.53) are ended higher after reporting earnings following yesterday's closing bell.

New Oriental Education & Technology (EDU 11.20, +1.70) jumped 17.9% after the company responded to accusations from research firm Muddy Waters. The research firm suggested a significant number of the firm’s 664 owned and operated schools and learning centers were instead operated by franchisees and that the company represented these operations as their own. A response from the company suggested, “The Muddy Waters report is wrong....New Oriental has never included these cooperation facilities, which never exceeded 21 facilities in total, in the counts of its own schools and learning centers, nor has New Oriental included student enrollments from these cooperation facilities as its own student enrollments.”

Shares of Walgreens (WAG 34.62, +3.65) and Express Scripts (ESRX 58.76, +1.07) rallied after the two companies announced a pharmacy network agreement. Terms of the contract were not disclosed; however, the deal will allow Walgreens to participate in the broadest Express Scripts retail network available to new and existing clients. Today’s gains had shares of Express Scripts testing all-time highs near the $60 level.

Homebuilders Toll Brothers (TOL 29.42, -0.19) and Lennar Corp. (LEN 30.32, -0.06) fell 0.6% and 0.2% respectively after this morning's disappointing existing home sales data.

Treasuries finished near session lows as most maturities finished just below their respective flat lines. The complex was unable to garner any meaningful strength despite today’s lackluster economic data as the 10-yr yield ticked up to 1.515%.

There is no data set for release tomorrow.DJ30 +34.66 NASDAQ +23.30 SP500 +3.73 NASDAQ Adv/Vol/Dec 1093/1.66 bln/1463 NYSE Adv/Vol/Dec 1563/756.6 mln/1463

3:25 pm : Crude oil steadily climbed higher during today’s pit session as the dollar weakened. It came off its session low of $90.67 and peaked at $92.97 in afternoon action. Although it pulled back slightly into the close, the energy component booked a solid gain of 3.2% at $92.81 per barrel. Natural gas touched a session high of $3.03 per MMBtu following better-than-expected inventory data that showed a build of 28 bcf when a build of 30 bcf was anticipated. It then spent the majority of pit trade chopping around just above the unchanged line before settling up 1.0% at $3.00 per MMBtu.

Precious metals also saw a boost from the weaker dollar and disappointing U.S. data. Both gold and silver spent their entire sessions in the black, touching respective highs of $1591.50 and $27.58 per ounce. However, a sell-off to session lows moments before the close left gold to settle with a gain of 0.6% at $1580.10 while silver booked a 0.5%advance, closing at $27.21 per ounce.DJ30 +37.84 NASDAQ +25.07 SP500 +3.60 NASDAQ Adv/Vol/Dec 1139/1.37 bln/1341 NYSE Adv/Vol/Dec 1537/525.2 mln/1481

3:00 pm : Treasuries finished near session lows as most maturities ended just below their respective flat lines. The complex was unable to garner any meaningful strength despite today’s lackluster economic data which saw initial and continuing claims, existing home sales, the Philadelphia Fed, and leading indicators all fall short of expectations. Shorter dated paper out performed with light buying dropping both the 2- and 3-yr yields more than one basis point apiece to 0.222% and 0.303% respectively. Meanwhile, a modest decline of 10/32 dropped the 30-yr bond to 107 29/32 where it saw its worst close in a week. The 10-yr yield rose three and a half basis points from yesterday’s cash close, ending the day at 1.515%. Selling swung the yield curve steeper with the 2-10-yr spread widening to 129 basis points. There is no data on Friday.DJ30 +26.64 NASDAQ +24.65 SP500 +3.32 NASDAQ Adv/Vol/Dec 1137/1.27 bln/1445 NYSE Adv/Vol/Dec 1544/480.9 mln/1449

2:30 pm : The Dollar Index holds small losses with trade taking place just below the 83.00 level. The euro is lower by 15 pips at 1.2265 as trade remains stuck in the 1.2200/1.2300 area. A lull in headlines emerging from the region has provided some stability in the single currency with German PPI data due out tomorrow. Meanwhile, a 65 pip advance has the pound trading at 1.5715 and near one-month highs. A fifth consecutive day of gains has sterling testing its 200-day moving average with a break out through 1.5800 setting up the potential for a move into the 1.6050 area. Britain's public sector net borrowing will be released tomorrow. Elsewhere, a 65 pip gain has the Australian dollar trading at its best level since the end of April with the flight back into risk assets lifiting the hard currency more than 800 pips off its June 1 low. The 1.0500 area is likely to provide some resistance.DJ30 +13.06 NASDAQ +21.28 SP500 +1.35 NASDAQ Adv/Vol/Dec 1105/1.18 bln/1344 NYSE Adv/Vol/Dec 1438/440.8 mln/1532

2:00 pm : Markets have pulled back with weakness led by the financial sector. The S&P and Dow are now nearly flat on the day.DJ30 -3.41 NASDAQ 18.14 SP500 0.47 NASDAQ Adv/Vol/Dec 1060/1090 mln/1361 NYSE Adv/Vol/Dec 1400/404 mln/1587

1:30 pm : Equities continue to trade with modest gains. Notable outperformance is coming out of the Nasdaq (+1.0%) as the technology sector leads the way higher, currently up 1.1%.

Looking at the sector from the bottom up, IBM (IBM 196.25 +8.00), eBay (EBAY 44.20 +3.74), Qualcomm (QCOM 58.51 +2.46), F5 Networks (FFIV 102.4 +3.81), Mellanox (MLNX 94.06 +27.68) and Skyworks Solutions (SWKS 28.93 +2.29) are all higher after reporting earnings after the bell yesterday.DJ30 +33.60 NASDAQ +28.52 SP500 +4.35 NASDAQ Adv/Vol/Dec 1202/997 mln/1179 NYSE Adv/Vol/Dec 1617/366 mln/1385

1:00 pm : Stocks hold solid gains in afternoon trade as markets are pushing higher despite this morning's disappointing economic data. Intial and continuing claims, existing home sales, the Philadelphia Fed, and leading indicators all fell short of estimates, but stocks have been able to shrug off the disappointment with the S&P 500 finding itself at a two and a half month high. The Nasdaq is leading the way with a 1.0% advance while the S&P 500 and Dow trade up 0.3% and 0.4% respectively.

International Business Machines (IBM 195.05, +6.80) is a notable winner this morning as it has rallied 3.5% and regained its 200-day moving average. The stock has shaken off a top line miss as analysts view the quarter as relatively stable in a very difficult market environment.

YUM! Brands (YUM 67.10, +1.55) is another example of the low second quarter expectations as it has erased early selling pressure and pushed back into positive territory. This despite a $0.03 miss on the bottom line. The company did outpace revenue expectations which appears to be enough to offset cost concerns at this point.

Morgan Stanley (MS 13.27, -0.72) has been a notable underperformer as the firm missed on both the top and bottom lines. Today's selling has the stock flirting with critical support in the vicnity with a breakdown likely leading to a retest of the June low near $12.25.

Some other notables from this morning include: Freeport-McMoRan (FCX 34.52, +1.50) missed on top and bottom lines; Nokia (NOK 1.78, +0.05) beat top and bottom line expectations; and Verizon Communications (VZ 44.76, -1.13) which was in line with expectations.

New Oriental Education & Technology (EDU 11.75, +2.25) is trading up 23.7% after the company responded to accusations from research firm Muddy Waters. The research firm suggested a significant number of the firm’s 664 owned and operated schools and learning centers were instead operated by franchisees and that the company represented these operations as their own. A response from the company suggests, “The Muddy Waters report is wrong....New Oriental has never included these cooperation facilities, which never exceeded 21 facilities in total, in the counts of its own schools and learning centers, nor has New Oriental included student enrollments from these cooperation facilities as its own student enrollments.”

Shares of Walgreens (WAG 34.25, +3.28) and Express Scripts (ESRX 59.02, +1.33) are seeing a boost this morning after the companies announced a pharmacy network agreement. Terms of the contract were not disclosed; however, the deal will allow Walgreens to participate in the broadest Express Scripts retail network available to new and existing clients. Today’s gains has shares of Express Scripts testing all-time highs near the $60 level.

The SPDR S&P Homebuilders ETF (XHB 21.61, +0.05) is higher despite today's disappointing existing home sales data. Toll Brothers (TOL 29.15, -0.46) and Lennar Corp. (LEN 30.06, -0.32) are among the individual names seeing weakness, trading down 1.6% and 1.1% respectively.

A quiet session for Treasuries has the 10-yr yield holding near 1.500%.DJ30 +21.72 NASDAQ +26.62 SP500 +3.41 NASDAQ Adv/Vol/Dec 1226/906.1 mln/1159 NYSE Adv/Vol/Dec 1571/331.8 mln/1365

12:30 pm : Stocks have pushed to fresh highs with the Nasdaq now up 1.1% while both the S&P 500 and Dow are seeing a 0.5% advance.

New Oriental Education & Technology (EDU 12.07, +2.57) is trading up 27% after the company responded to accusations from research firm Muddy Waters. The research firm suggested a significant number of the firm’s 664 owned and operated schools and learning centers were instead operated by franchisees and that the company represented these operations as their own. A response from the company suggests, “The Muddy Waters report is wrong....New Oriental has never included these cooperation facilities, which never exceeded 21 facilities in total, in the counts of its own schools and learning centers, nor has New Oriental included student enrollments from these cooperation facilities as its own student enrollments.”DJ30 +66.75 NASDAQ +33.22 SP500 +7.36 NASDAQ Adv/Vol/Dec 1293/831.5 mln/1078 NYSE Adv/Vol/Dec 1672/299.6 mln/1246

12:00 pm : The major averages remain bid as the Nasdaq leads the way with a 0.8% advance. Significant underperformance can be found in both the Dow and S&P 500 which are up 0.1% and 0.3% respectively.

Shares of Walgreens (WAG 34.23, +3.26) and Express Scripts (ESRX 58.89, +1.20) are seeing a boost this morning after the companies announced a pharmacy network agreement. Terms of the contract were not disclosed; however, the deal will allow Walgreens to participate in the broadest Express Scripts retail network available to new and existing clients. Today’s gains have shares of Express Scripts testing all-time highs near the $60 level.DJ30 +22.21 NASDAQ +25.39 SP500 +4.06 NASDAQ Adv/Vol/Dec 1182/732.9 mln/1154 NYSE Adv/Vol/Dec 1537/266.2 mln/1339

11:35 am : Markets are being driven higher as the 'better than feared' earnings theme continues to play out. International Business Machines (IBM 195.63, +7.36) is a notable winner this morning as it has rallied almost 4.0% and has regained its 200-day moving average. The stock has shaken off a top line miss as analysts view the quarter as relatively stable in a very difficult market environment.

YUM! Brands (YUM 66.66, +1.11) is another example of the low second quarter expectations as it has erased early selling pressure and pushed back into positive territory. This despite a $0.03 miss on the bottom line. The company did outpace revenue expectations which appears to be enough to offset cost concerns at this point.

Morgan Stanley (MS 13.40, -0.59) has been a notable underperformer as the firm missed on both the top and bottom lines. Given the poor results the selling reaction has been muted. One could view this report and reaction as 'in line with fear'. But the selling ahead of earnings appears to have priced in the miss. The firm is being given a small pass as the Moody's downgrade threat was a significant drag on results. But investors have not been enticed to come in and buy the dip as plenty of worries remain.

Some other notables from this morning include: Freeport-McMoRan (FCX 34.07, +1.05) missed on top and bottom lines; Nokia (NOK 1.86, +0.13) beat top and bottom line expectations; and Verizon (VZ 45.03, -0.86) which was in line with expectations.DJ30 +32.43 NASDAQ +24.63 SP500 +4.17 NASDAQ Adv/Vol/Dec 1169/651.5 mln/1375 NYSE Adv/Vol/Dec 1484/236.5 mln/1373

11:00 am : Stocks hold gains despite this morning’s disappointing economic data as a 0.7% advance has the Nasdaq leading the way.

Homebuilders are under pressure this morning following the disappointing existing home sales data. The SPDR S&P Homebuilders ETF (XHB 21.55, -0.01) is seeing a small decline of 0.1% while individual names are seeing more aggressive selling. Toll Brothers (TOL 28.90, -0.71) and Lennar Corp. (LEN 29.92, -0.46) are among the heaviest hit names, trading down 2.4% and 1.5% respectively.


DJ30 +13.06 NASDAQ +21.39 SP500 +2.96 NASDAQ Adv/Vol/Dec 1127/530.0 mln/1139 NYSE Adv/Vol/Dec 1489/197.7 mln/1340

10:35 am : Commodities remain mostly higher despite a sharp rally in the dollar index, which pushed it back near the unchanged line.

In the energy space, Aug crude oil has been trending higher all morning and just hit a new session high of $91.58/barrel. In current trade, crude oil remains just under that high at $91.48, up 1.8%.

July natural gas sold off earlier this morning and was sitting in negative territory all morning until the inventory data, which was just released and showed a build of 28 bcf vs 30 consensus. The inventory data results caused nat gas to spike to a new HoD of $3.01/MMBtu. In current trade, nat gas is +1.6% at $3.02/MMBtu.

Metals: August gold and Sept silver trended higher all morning until hitting their current highs for the day (Gold $1591.50, Silver $27.57). Both precious metals have since pulled back and gold is now +0.9% at $1584.20 and silver is +0.8% at $27.30/oz.DJ30 +12.94 NASDAQ +15.01 SP500 +1.09 NASDAQ Adv/Vol/Dec 1065/431.2 mln/1161 NYSE Adv/Vol/Dec 1426/166 mln/1366

10:05 am : The Philadelphia Fed Survey rose to -12.9 for July. That comes after a reading of -16.6 for June. Economists polled by Briefing.com had expected, on average, that the Survey would improve to a -10.0 reading for July.

Existing home sales for June hit an annualized rate of 4.37 million units, which is in weaker than the rate of 4.65 million units that had been generally expected among economists surveyed by Briefing.com. The pace for June is down from the prior month rate of 4.62 million units.

Leading Indicators for June decreased by 0.3%, which is worse than the -0.2% reading that had been widely forecasted to follow the 0.4% increase in the prior month.DJ30 +1.82 NASDAQ +17.67 SP500 +1.19 NASDAQ Adv/Vol/Dec 1166/260.3 mln/958 NYSE Adv/Vol/Dec 1532/106.5 mln/1188

09:45 am : The major averages are bid in the opening minutes of trade with a 0.8% gain in the Nasdaq leading the way. Technology shares pace the advance while consumer discretionary, industrials, and materials are also seeing a solid a bid. Underperformance can be found in consumer staples, telecommunications, and utilities. Existing home sales, the Philadelphia Fed, and leading indicators will all cross the wires at 10 AM ET.DJ30 +28.38 NASDAQ +23.83 SP500 +4.93 NASDAQ Adv/Vol/Dec 1370/127.8 mln/735 NYSE Adv/Vol/Dec 1848/64.9 mln/743

09:15 am : S&P futures vs fair value: +3.80. Nasdaq futures vs fair value: +17.30. Futures point to a higher open despite claims data falling short of expectations as markets around the worst continue to rally on hopes of more easing by global central banks. Earnings announcements are coming fast and furious with eBay (EBAY), International Business Machines (IBM), Morgan Stanley (MS), and Yum! Brands (YUM) among the notable names releasing quarterly results since yesterday’s close. Economic data still to be released this morning includes existing home sales, the Philadelphia Fed, and leading indicators which will all cross the wires at 10 AM ET.

08:59 am : [BRIEFING.COM] S&P futures vs fair value: +4.70. Nasdaq futures vs fair value: +17.20. Global equity markets are higher this morning as stocks continue to rally on hopes central banks around the world will loosen policy further in order to stimulate growth. Rumblings of a reserve requirement ratio cut in China lifted markets across most of Asia with the momentum carrying over to Europe. Economic data around the world has been rather light this morning with the Eurozone’s current account surplus widening to EUR10.9 billion (EUR5.3 billion expected), British retail sales ticking up 0.1% month over month (0.6% month over month expected), and Australia’s NAB Business Confidence Survey slipping to -2 (-1 actual).

Asian indices (Nikkei +0.8%, Hang Seng +1.7%, Shanghai +0.7%) finished mostly higher as markets gained on hopes of a reserve requirement cut by the People’s Bank of China. Japan’s Nikkei gained 0.8% as some of the more heavily beaten down names led the advance. Tech names Advantest and Tokyo Electron rallied 6.5% and 3.6% respectively despite Intel cutting its 2012 revenue growth forecast 3-5% as investors feared worse. Meanwhile, Hong Kong’s Hang Seng surged 1.7% with today’s strength leading to a test of the 200-day moving average. Chinese financials were some of the top performers as China Construction Bank rose 2.7% and Commercial Bank of China added 2.5%. On the mainland, China’s Shanghai Composite jumped 0.7% as insurance shares saw a strong rally. China Life climbed 5.6% while rivals Ping An Insurance and China Pacific Insurance gained 3.7% and 4.5% respectively.

The major European bourses (FTSE +0.3%, CAC +1.0%, DAX +1.2%) trade near session highs as money continues to flow into equities despite the Spanish 10-yr yield climbing back up to the 7.00% threshold following this morning’s disappointing auctions. Britain’s FTSE is up 0.3% as strong gains in financials pace the advance. Royal Bank of Scotland is seeing a 3.4% gain while Lloyds Banking Group is higher by 1.8%. Elsewhere, France’s CAC is up 1.0% as automakers lead the way. Peugeot is surging 7.0% and Renault is higher by 3.8% as traders move back into the heavily beaten down names. Meanwhile, Germany’s DAX is leading the regional advance with a 1.2% gain. Athletic apparel maker Adidas is trading up 2.8% while steelmaker Salzgitter is higher by 1.9%.

08:32 am : [BRIEFING.COM] S&P futures vs fair value: +5.40. Nasdaq futures vs fair value: +16.50. The latest weekly initial jobless claims count totaled 386,000, which is worse than the 365,000 that had been expected, on average, among economists polled by Briefing.com. The latest tally is also up from the upwardly revised prior week count of 352,000. As for continuing claims, they rose to about 3.314 million from 3.313 million.

08:00 am : S&P futures vs fair value: +5.10. Nasdaq futures vs fair value: +15.50. Futures are showing continued gains this morning, currently higher by 0.4% this morning following positive responses to several big earnings announcements and strength in overseas markets overnight.

Several large-cap stocks traded higher in the wake of earnings reports released after the close last night, helping the tone overnight and this morning. The low expectations built into stocks are evident this quarter, as can be seen by the positive responses to earnings reports that might normally be considered lackluster. International Business Machines (IBM 192.52, +4.27) is higher by 2.4% after reporting better than expected earnings and EPS guidance, despite revenues that were below the consensus. QUALCOMM (QCOM 59.25, +3.20) is higher by 6% despite a quarterly miss and downside guidance. The strength in the stock may be explained by the positive comments the company made regarding the December quarter, as well as low expectations for guidance ahead of the report. Skyworks (SWKS 28.75, +2.11) is higher by 9% this morning after beating current quarter estimates and issuing in-line guidance. eBay Inc. (EBAY 42.90, +2.44) is up nearly 6% after beating top and bottom line consensus estimates for Q2, while guiding for Q3 EPS and revenues that are slightly below to in-line with the consensus. Mellanox Technologies (MLNX 96.00, +29.62) is higher by more than 40% after reporting blowout quarterly results and very strong upside guidance.

On the other hand, Morgan Stanley (MS 13.30, -0.69) is under pressure this morning after reporting disappointing earnings and revenues. MS reported Q2 earnings of $0.28 per share including its Debt Valuation Adjustment, or DVA, and $0.16 excluding DVA. The Capital IQ consensus called for EPS of $0.33. Revenues were also below expectations.

Asian markets traded higher overnight and European averages are trading near their highs of the day. Hong Kong and Chinese markets traded up 1.7% and 0.7%, respectively, helped by continued speculation that China could soon ease monetary policy further.

In Europe, markets are higher at mid-day, with a 1.0% gain in Germany's DAX and a 0.4% gain in the UK's FTSE. Spanish yields are higher by 6 basis points to 6.93% after a Spanish debt auction saw higher yields and weaker investor demand.

There are several items of interest on today's U.S. economic calendar. Initial jobless claims data will be released at 8:30 ET. This will be followed by June existing home sales, June leading indicators and the July Philly Fed, all due out at 10:00 ET.

06:37 am : [BRIEFING.COM] S&P futures vs fair value: +6.00. Nasdaq futures vs fair value: +17.50.

06:37 am : Nikkei...8795.55...+68.80...+0.80%. Hang Seng...19559.05...+319.20...+1.70%.

06:37 am : FTSE...5700.91...+15.10...+0.30%. DAX...6738.98...+54.10...+0.80%.

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)
@ http://twitter.com/wrbtrader, http://stocktwits.com/wrbtrader and http://chart.ly/users/wrbtrader

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