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)
Phone: +1 708 572-4885
Free Chat Room: http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164
Business Hours: 8am - 5pm est (Mon - Fri)
questions@thestrategylab.com (24/7)
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click on the above image to view today's performance verification

Price Action Trade Performance for Today: Emini TF ($TF_F) futures @ $5,450.00 dollars or +54.50 points, Emini ES ($ES_F) futures @ $7,875.00 dollars or +157.50 points, Light Crude Oil CL ($CL_F) futures @ $0.00 dollars or +0.00 points, Gold GC ($GC_F) futures @ $0.00 dollars or +0.00 points and EuroFX 6E ($6E_F) futures @ $0.00 dollars or +0.0000 ticks. Total Profit @ $13,325.00 dollars

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
Light Crude Oil CL (WTI) Futures: 1 tick or 0.01 = $10.00 dollars and there's more contract information @ CMEGroup
Gold GC Futures: 1 tick or 0.10 = $10.00 dollars and there's more contract information @ CMEGroup
EuroFX 6E Futures: 1 tick or 0.0001 = $12.50 dollars and there's more contract information @ CMEGroup

In addition, all of my trades were posted real-time in the chat room. You can read today's chat room logs for details about each one of my trades via price action trading from entry to exit (e.g. time, price, contract size) along with price action commentary as the trade traversed to its completion...all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=127&t=1713

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). I'm primarily a day trader because it suits my personal lifestyle but I do occasionally swing trade and position trade. Simply, my trade method is applicable for position trading, swing trading and day trading.

##TheStrategyLab Chat Room is free. Members and I use the chat room to post WRB Analysis commentary, real-time trades and to post anything else related to trading. The chat room helps me tremendously in my own trading because I use it to document (journal) my thought process from trade to trade so that I can easily review at a later date my thoughts as I interacted with the markets...info I can not get from my broker statements. Also, this is not a signal calling chat room where a head trader tells you when to buy or sell. If you join the chat room and then you do not ask any questions about WRB Analysis in your own trading or you do not document (journal) your own thoughts from trade to trade...the chat room will not be useful to you. Chat room access instructions @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=164

Price Action Analysis via 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

Trade Signal Strategies via 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 (answering your questions) prior to purchasing the Volatility Trading Report (VTR).

Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=232&t=2209

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Market Context Summaries

The below summaries by Bloomberg, CNNMoney, Reuters and Yahoo! Finance helps me to do a quick review of the fundamentals, FED/ECB/BOE/IMF actions or any important global economic events (e.g. Eurozone, MarketWatch.com) that had an impact on today's price action in many trading instruments I monitor during the trading day. Simply, I'm a strong believer that key market events causes key changes in supply/demand and volatility resulting in trade opportunities (swing points and strong continuation price actions) that reach profit targets. Thus, I pay attention to these key market events, intermarket analysis (e.g. Forex EurUsd, EuroFX 6E futures, Gold GC futures, Light Crude Oil (WTI) CL & Brent Oil futures, Eurex DAX futures, Euronext FTSE100 futures, Emini ES futures, Emini TF futures, Treasury ZB futures and U.S. Dollar Index futures) while using WRB Analysis from one trade to the next trade to give me the market context for price action trading before the appearance of my technical analysis trade signals. Therefore, I maintain these archives to allow me to understand what was happening on any given trading day in the past involving key market events to help better understand my trade decisions (day trading, swing trading, position trading)...something I can not get from my broker statements alone.

Dow Tumbles 326 Points On Weak Data


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

NEW YORK (CNNMoney)
February is looking an awful lot like January for investors. Emphasis on awful.

The Dow tumbled 326 points Monday, or almost 2.1%, after a much worse-than-expected reading on manufacturing activity in the United States. The S&P 500 and Nasdaq were also down more than 2%. CNNMoney's Tech 30 index was down sharply as well.

Investors were disappointed after the Institute for Supply Management's monthly index showed that manufacturing activity last month expanded at its weakest pace since May.

The bad news comes as investors are still reeling from a rough January. Disappointing earnings and volatility in emerging markets sent stocks sharply lower during the first month of the year. The Dow tumbled more than 5% last month -- its worst January since 2009.

Many experts think the market could fall further, following big gains in 2013 and the fact that the stocks haven't taken a big breather in a while. Though stocks took a small step back last spring, they haven't experienced a correction, typically defined as a decline of 10% or more, in more than two years.

With Monday's losses, the Dow is down more than 7% from the all-time high it hit on the last day of 2013, while the S&P 500 has fallen almost 6% from the all-time high it reached last month.

Plus, stocks could continue to be volatile ahead of the monthly jobs report due Friday and the possibility of another debt ceiling debate, said Kristina Hooper, investment strategist at Allianz Global Investors. But she thinks investors should not be scared by the market sell-off. "Rather, they should embrace the opportunities it creates."

But investors were clearly afraid. The VIX (VIX), a measure of volatility, surged 15%. And CNNMoney's Fear & Greed Index, which looks at the VIX and six other gauges of market sentiment, shows even more levels of Extreme Fear.

The possibility of a bigger pullback was also a hot topic among traders on StockTwits.

"$SPY way over extended," said MacDee. "Been overdue for a severe severe correction. Bearish."

But leopardtrader said he's using the weakness as an opportunity to buy stocks: "Market keep creating great opportunities. The rebound will be fast and furious as usual $SPY."

Still, others were worried by the fact that many traders are dismissing the pullback as a normal and healthy correction. That could mean that stocks are in for a sharper downward move.

"$SPY no one is predicting anything more than a correction which makes me think we might be in trouble...Bearish," said Undecided.

In corporate news, Herbalife (HLF) shares rose more than 7% after the company said fourth quarter earnings would top forecasts. The company also raised the amount of its planned share repurchase by $500 million.

The stock was briefly lower in the afternoon after hedge fund manager Bill Ackman's firm Pershing Square released a series of reports detailing why it thinks Herbalife is a pyramid scheme. The activist investor has made these accusations about Herbalife for more than a year, but the nutritional supplements marketer has refuted those claims.

Shares of Jos. A. Bank Clothiers (JOSB) declined after The Wall Street Journal reported that the company is in talks to buy fellow apparel retailer Eddie Bauer. The potential deal would be the latest twist in the battle between Jos. A. Bank and Men's Wearhouse (MW). Both retailers have offered to buy each other.

* Video - Rad! RadioShack 80's ad boosts stock

Shares of RadioShack (RSH) were higher as investors seemed to appreciate the company's self-deprecatory Super Bowl ad. Radio Shack showed that it was getting rid of its 1980s image and products and unveiling a new store. But even with Monday's move up, the stock is still well below its 52-week high.

Traders on StockTwits also seemed to enjoy the commercial but were skeptical that RadioShack could really turn its business around amid increased competition from Amazon.com (AMZN, Fortune 500).

"Great Radio Shack $RSH commercial trolling itself," said Estimize founder LDrogen. "Too bad it won't matter."

StockTwits trader DominoTree had the same sentiment.

"Even if they give Radio Shack a new collar, it's still the same dog with the same fleas," he said. "$RSH Bearish."

But a handful of traders were optimistic.

"$RSH Not everybody is tech savvy," said Caviar. "They could also lead a 3D Printer retail boom like they did with computers .They rule in rural communities."

Automakers reported January sales Monday. The news was mostly bad. Ford (F, Fortune 500). GM (GM, Fortune 500) and Toyota (TM) shares fell after posting sales declines in January that were even larger than what analysts were expecting. There was one bright spot though. Chrysler reported an increase in sales that topped forecasts.

Restaurant operator Yum! Brands (YUM, Fortune 500) is set to release quarterly results after the closing bell.

* Can stocks shake off January jitters?

European markets finished with losses after investors ignored reports of stronger manufacturing activity in the eurozone in January.

Many Asian markets were closed for the lunar new year but those trading moved lower, with the Nikkei in Japan declining by 2%. The benchmark Nikkei has tumbled 10.3% so far this year. That means the index is now undergoing a correction, after posting a whopping 57% gain in 2013 -- its biggest annual rise in over 40 years.

Traders in Asia were cautious after the release of weak official Chinese manufacturing data. Many emerging markets have suffered over the past few weeks as investors have moved money out of riskier markets in favor of relative safe havens.





4:15 pm: [BRIEFING.COM] The stock market began February on a sharply lower note after enduring a rough month of January. Small caps paced the Monday retreat as the Russell 2000 tumbled 3.1% while the S&P 500 fell 2.3%. For its part, the Dow Jones Industrial Average lost 2.1%, ending below its 200-day moving average (15470).

Despite the sharply lower finish, today's session actually started in the green. However, sellers emerged during the opening minutes and intensified their efforts after the January ISM Manufacturing Index registered a large decline (to 51.3 from 56.6).

Although the ISM report itself did not cause the aggressive selloff, it added to global growth concerns that have been percolating under the surface after China's Manufacturing PMI (50.5) fell to a six-month low while the Non-Manufacturing reading (53.4) registered an 11-month low.

Furthermore, the selloff was accompanied by another wave of yen strength. Dollar/yen traded right above the 102.00 level at the start of the session, but retreated along with equities. The pair finished the trading day right under 101.00 while yen futures added 1.4%, extending their 2014 gain to 4.3%.

The daylong pressure that was exerted on equities translated into strength for the bond market. The 10-yr note ended on its high with its yield down seven basis points at 2.59%. Gold futures also garnered interest, climbing 1.6% to $1259.50 per troy ounce.

Also of note, the retreat invited strong demand for volatility protection, sending the CBOE Volatility Index (VIX 21.12, +2.71) to its highest level since late June. Over the past two weeks, the near-term volatility gauge has added more than 72.0%.

All ten sectors finished in the red with the lowest-weighted group-telecom services (-3.7%)-ending at the bottom of the leaderboard. The remaining nine sectors fared a bit better, posting losses between 0.8% and 2.7%.

The discretionary sector (-2.7%) was the weakest performer among cyclical groups as retailers continued their recent weakness. The SPDR S&P Retail ETF (XRT 77.47, -2.38) lost 3.0%, sliding to levels not seen since late August. Today's loss widened the retail ETF's 2014 decline to 12.1%.

Automakers also pressured the discretionary space after Ford (F 14.55, -0.41) reported a 7.0% decline in January sales while General Motors (GM 35.25, -0.83) announced an 11.9% decrease in sales. The two names settled lower by 2.7% and 2.3%, respectively.

Elsewhere, other influential sectors like financials (-2.5%) and industrials (-2.7%) lagged while health care (-2.0%) and technology (-2.2%) ended just ahead of the S&P 500.

The utilities sector (-0.8%) was the only group that avoided losing 1.0% or more. The rate-sensitive sector is the only group that remains in positive territory for the year with a gain of 2.1%.

The selloff was accompanied by heavy volume as more than 900 million shares changed hands on the floor of the New York Stock Exchange.

Today's data was limited to just a pair of reports:

The ISM Manufacturing Index for January dropped to 51.3 from 56.5 while the Briefing.com consensus expected the reading to fall to 56.0. That tied the largest one-month decline since October 2008. The sharp decline in the national index did not correlate with the regional surveys from Federal Reserve banks. They showed modest improvements in manufacturing activity throughout the country. According to the ISM report, some of the weakness may have been due to the extreme winter weather conditions that occurred in January. If this is true, then the ISM Index should bounce back rather significantly in February.
Total construction spending increased 0.1% in December after increasing a downwardly revised 0.8% (from 1.0%) in November. The Briefing.com consensus expected construction spending to increase 0.1%. The residential construction spending data does not line up with the contraction reported in the advance estimate for fourth quarter GDP growth. The downturn in fourth quarter residential investment spending could have only occurred if spending fell in December or if there were large revisions to the November and/or October data. According to the Census data, that did not happen.

Tomorrow, December factory orders will be announced at 10:00 ET.

Nasdaq Composite -4.3% YTD
S&P 500 -5.8% YTD
Russell 2000 -5.8% YTD
Dow Jones Industrial Average -7.3% YTD

3:35 pm: [BRIEFING.COM]

Precious metals rallied in morning pit trade as the dollar index fell following weak ISM Manufacturing data. The ISM Manufacturing Index dropped to 51.3 in January from 56.5 in December, the largest one-month decline since October 2008. The Briefing.com consensus expected the index to fall to 56.0. Apr gold rose as high as $1266.10 per ounce and settled with a 1.6% gain at $1259.50 per ounce.
Mar silver popped to a session high of $19.62 per ounce on the economic data. However, the momentum faded and prices pulled back as the session progressed. Silver eventually settled at $19.41 per ounce, or 1.6% higher.
Mar crude oil extended Friday's losses as it retreated from a session high of $97.77 per barrel set in morning action. The energy component dipped to a session low of $96.26 per barrel and settled at $96.43 per barrel, booking a loss of 1.1%.
Mar natural gas fell for a third consecutive session but trimmed earlier losses as it lifted from a session low of $4.80 per MMBtu set at pit trade open. It advanced to a session high of $4.96 per MMBtu and settled 0.8% lower at $4.90 per MMBtu.

3:00 pm: [BRIEFING.COM] The S&P 500 trades lower by 2.3% with one hour remaining in today's session. Stocks spent the duration of the trading day on the defensive and the major averages cut through some widely-watched levels. On that note, the S&P 500 fell through its 100-day average (1769) while the Dow Jones plunged below its 200-day average (15470).

Throughout the day, we have been highlighting yen strength as one of the factors contributing to the weakness in equities. During the past 30 minutes, the yen climbed to a fresh high, sending dollar/yen to a new low. Currently, dollar/yen hovers near 100.88 while yen futures trade higher by 1.5%.

2:30 pm: [BRIEFING.COM] The S&P 500 has inched off its worst level of the day during the past 30 minutes, but remains sharply lower for the session. The benchmark index slashed through its 100-day moving average (1770) during the late morning and now finds itself at levels last seen in early November.

Meanwhile, the Nasdaq has been a bit more deliberate in its retreat, having yet to cross its 100-day moving average (3971). Given its current level, the tech-heavy index hovers near its December lows.

Also of note, the Dow has been the weakest performer so far in 2014. At this juncture, the index sits just below its 200-day moving average (15470), which represents the first test of this key level for the price-weighted index since October 9.

2:00 pm: [BRIEFING.COM] Recent action saw another downtick for the indices that have been trapped in a steady downtrend throughout the session. The Russell 2000 now trades lower by 3.1% while the S&P 500 has extended its decline to 2.0%.

Volatility protection remains in strong demand as the CBOE Volatility Index (VIX 21.07, +2.66) displays a 14.5% increase. Given its current level, the near-term volatility gauge is on track to end at its highest level since October 9. If VIX manages to climb above 21.34%, that would mark the highest point for the index since June 24.

With stocks on lows, many have sought shelter in Treasuries. The 10-yr yield is now down six basis points at 2.59% after hovering near 2.68% just before the opening bell.

1:30 pm: [BRIEFING.COM] So far, February is looking like January. Stock prices continue to fall, Treasury prices continue to rally, volatility continues to surge, and there is yet another winter storm in the forecast. It's not the start most were hoping for after the S&P 500 suffered its worst January since 2010. But, aside from a half-hearted bounce at the open, it has been a trend-down day for the major indices, which are at their worst levels of the session.

The proximate cause for today's weakness was the weaker than expected ISM Index for January. Selling accelerated after that report, which came in the midst of some weak auto sales reports for January and an extension of the yen's strength against other major currencies. The yen's strength has flown in the face of conventional wisdom entering the year and it has triggered concerns about a further unwinding of yen-based carry trades.

To be sure, there is a good bit of uncertainty right now that is stoking broad-based selling activity. Every sector in the S&P 500 is down today, so relative strength is measured in terms of which sectors are down the least. The utilities (-0.5%) and energy (-1.3%) sectors "lead" in that respect.

Decliners are outpacing advancers by a 5-to-1 margin at the NYSE and by a 6-to-1 margin at the Nasdaq.

1:00 pm: [BRIEFING.COM] At midday, equity indices hover near their lows with small caps leading the broad retreat. The Russell 2000 trades lower by 2.6% while the S&P 500 holds a loss of 1.6% with all ten sectors registering losses.

After ending January on a lower note, the market started the new month with a continuation of the retreat. Although stocks began the trading day in positive territory, the early strength faded within the opening minutes, enabling stocks to resume the recent downtrend.

Growth concerns surrounding China crept up once again over the weekend after the Middle Kingdom's Manufacturing PMI came in at a six-month low (50.5 from 51.0) while the non-manufacturing reading (53.4 from 54.6) marked an 11-month low. Separately, worries about the strength of growth in the U.S. also factored into the early retreat after the January ISM Manufacturing Index fell to 51.3 from 56.5.

Although the ISM report was followed by heavy selling, the retreat in equities coincided with the Japanese yen gaining strength once again. At this juncture, yen futures trade higher by 1.1% while dollar/yen hovers near 101.20 after tumbling below 101.80 following the ISM report.

With stocks on lows, Treasuries are near their highs with the 10-yr yield down four basis points at 2.61%. Elsewhere, gold futures have benefitted from safe-haven flows as the yellow metal trades higher by 1.5% at $1258.60 per troy ounce.

Fittingly, the weakest cyclical group of the year, consumer discretionary, is the weakest performer of the day. The sector trades lower by 2.0% amid broad weakness. Retailers have gotten off to a soft start in 2014 and today's 2.3% loss in the SPDR S&P Retail ETF (XRT 78.03, -1.82) has extended the ETF's 2014 decline to 11.4%.

Elsewhere, homebuilders trade broadly lower despite the retreat in Treasury yields. The iShares Dow Jones US Home Construction ETF (ITB 24.28, -0.54) is lower by 2.2%.

Adding insult to injury, automakers lag after Ford (F 14.54, -0.42) reported a 7.0% decline in January sales while General Motors (GM 35.51, -0.57) announced an 11.9% decrease in sales. The two names hold midday losses of 2.9% and 1.7%, respectively.

Today's economic data was limited to just two releases.

The ISM Manufacturing Index for January dropped to 51.3 from 56.5 while the Briefing.com consensus expected the reading to fall to 56.0. That tied the largest one-month decline since October 2008. The sharp decline in the national index did not correlate with the regional surveys from Federal Reserve banks. They showed modest improvements in manufacturing activity throughout the country. According to the ISM report, some of the weakness may have been due to the extreme winter weather conditions that occurred in January. If this is true, then the ISM Index should bounce back rather significantly in February.
Total construction spending increased 0.1% in December after increasing a downwardly revised 0.8% (from 1.0%) in November. The Briefing.com consensus expected construction spending to increase 0.1%. The residential construction spending data does not line up with the contraction reported in the advance estimate for fourth quarter GDP growth. The downturn in fourth quarter residential investment spending could have only occurred if spending fell in December or if there were large revisions to the November and/or October data. According to the Census data, that did not happen.

12:30 pm: [BRIEFING.COM] The market remains pinned to lows with the S&P 500 displaying a 1.5% loss. Including the decline, the benchmark index is now down 5.1% in 2014.

Regarding individual sectors, last year's strongest group-consumer discretionary-is the biggest laggard of the day and the weakest sector of the year. The discretionary sector trades lower by 2.2%, extending its 2014 decline to 8.0%.

The continued retreat has invited increased demand for volatility protection as the CBOE Volatility Index (VIX 20.17, +1.76) trades higher by 9.7%. This has placed the near-term volatility measure at its highest level since October 9.

12:00 pm: [BRIEFING.COM] Not much let up for the major averages as they remain in a steady downtrend. The S&P 500 has widened its loss to 1.6% while the small-cap Russell 2000 now trades lower by 2.5%.

After retreating broadly during the month of January, equities picked up right where they left off. Similarly, the trends observed in the foreign exchange market at the end of January have continued into the first February session.

Yen futures displayed strength in January, rallying 3.0% over the course of the month. Today, yen strength is making itself known once again as dollar/yen hovers near its session low at 101.13 while yen futures display a 1.2% gain.

Elsewhere, Treasuries have inched to fresh highs. The 10-yr yield is now lower by five basis points at 2.60%.

11:30 am: [BRIEFING.COM] Equity indices have dropped to fresh lows with the S&P 500 extending its decline to 1.3%. As a result, seven of ten sectors now trade with losses exceeding 1.0% and the discretionary group (-1.8%) continues to trail amid broad weakness.

Retailers have gotten off to a slow start in 2014 and today's 2.2% loss in the SPDR S&P Retail ETF (XRT 78.12, -1.73) has extended its 2014 decline to 11.4%.

Elsewhere, homebuilders trade broadly lower despite today's retreat in Treasury rates (10-yr yield -3bps at 2.62%). The iShares Dow Jones US Home Construction ETF (ITB 24.29, -0.53) is lower by 2.1%.

Adding insult to injury, automakers lag after Ford (F 14.57, -0.39) reported a 7.0% decline in January sales while General Motors (GM 35.28, -0.66) announced an 11.9% decrease in sales. The two names trade lower by 2.5% and 1.8%, respectively.

11:00 am: [BRIEFING.COM] The major averages trade broadly lower with small caps seeing the largest decline. The Russell 2000 is lower by 1.5% while the S&P 500 holds a loss of 1.0% as nine of ten sectors hover in the red.

Stocks slumped to lows after the January ISM Index was reported well below expectations (51.3 actual versus 56.0 expected). In addition to weighing on equities, the disappointing report gave a boost to gold futures and Treasuries. At this juncture, gold futures trade higher by 1.7% at $1260.70/ozt while Treasuries hover near their best levels of the session with the 10-yr yield down two basis points at 2.63%.

Also of note, the disappointing report pressured the dollar, sending dollar/yen below 101.50. Currently, the pair hovers near 101.30 after notching a low at 101.21.

10:35 am: [BRIEFING.COM]

Gold and silver futures spiked to new session highs following the ISM data and remain just under those highs.
Apr gold is now +1.7% at $1260.60/oz and Mar silver is +1.8% at $19.47/oz
Natural gas is down for a third day consecutive day. The energy component sold off in early morning hours and fell as low as $4.75/MMBtu.
It has since been recovering and is currently -1% at $4.90/MMBtu.
Crude oil spent the overnight session in the red, but gained some buying interest late in the overnight session.
Mar crude is ticking lower here and is now +0.03% at $97.52/barrel.

10:00 am: [BRIEFING.COM] The S&P 500 trades lower by 0.6%.

December construction spending increased 0.1% month-over-month, which matched the Briefing.com consensus.

Separately, the January ISM Index fell to 51.3 from 56.5 while the Briefing.com consensus expected the reading to slip to 56.0.

9:45 am: [BRIEFING.COM] The major averages began the session on a modestly higher note before returning to their flat lines.

Six of ten sectors display gains with health care (+0.3%) and industrials (+0.2%) showing early strength while the two consumer sectors lag. Staples trade lower by 0.6% while the discretionary space holds a loss of 0.5%. Retailers are contributing to the early weakness among consumer stocks as the SPDR S&P Retail ETF (XRT 79.34, -0.52) trades lower by 0.6%.

Treasuries remain near their morning lows with the 10-yr yield up two basis points at 2.67%.

December construction spending and the January ISM Index will both be released at 10:00 ET.

9:11 am: [BRIEFING.COM] S&P futures vs fair value: -0.20. Nasdaq futures vs fair value: -2.00. Equities are on track to begin today's session on a quiet note as futures on the S&P 500 trade less than one point below fair value.

The trading week has gotten off to a quiet start with several Asian markets remaining closed for Lunar New Year. Despite the closures, China s released its latest PMI data, which disappointed. Manufacturing PMI came in at a six-month low of 50.5 (51.0 prior) while the non-manufacturing reading of 53.4 (54.6 last) marked an 11-month low.

Participants also received several Manufacturing PMI reports from economies across the eurozone, but most of the reports surpassed estimates. European indices, meanwhile, trade little changed.

Domestically, futures have spent pre-market action inside narrow ranges, but dollar/yen has once again played a part in setting the direction. The overnight high in futures coincided with a session high for the dollar/yen pair and the recent retreat in futures took place as dollar/yen slipped below 102.00.

Treasuries display modest losses with the 10-yr yield up two basis points at 2.67%.

December construction spending and the January ISM Index will both be released at 10:00 ET.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: -0.80. Nasdaq futures vs fair value: -0.50. The S&P 500 futures trade less than one point below fair value.

Markets across Asia ended lower as Friday's selling on Wall Street set the tone. Much of the region remained shuttered in celebration of the Lunar New Year. Thailand's national election was disrupted by protesters with an outcome still in the balance. Similar to data reported by HSBC, China's official PMI figures came in at multi-month lows. Manufacturing PMI came in at a six-month low of 50.5 (51.0 prior) while the non-manufacturing reading of 53.4 (54.6 last) marked an 11-month low.

Elsewhere, Australia's building approvals posted a larger-than-expected 2.9% month-over-month decline (-0.3% expected) while ANZ Job Advertisements slipped -0.3% month-over-month. Indonesia's trade surplus climbed to $1.52 billion from $780 million ($550 mln expected) and its inflation rate eased to 8.2% year-over-year (8.4% previous).

Japan's Nikkei (-2.0%) is now in a correction with trade off ~10% from its December 30 close. Exporters were weak as a result of the stronger yen with Toyota Motor shedding 2.1% and Sony giving up 2.2%. TDK tumbled 8.6% despite posting better than expected results.
Hong Kong's Hang Seng was closed.
China's Shanghai Composite was closed.

Major European indices trade little changed after slipping at the start of the session. Participants received several regional PMI readings that were mostly above expectations. Eurozone Manufacturing PMI rose to 54.0 from 53.9 (53.9 expected), Germany's Manufacturing PMI increased to 56.5 from 56.3 (56.3 consensus), and French Manufacturing PMI increased to 49.3 from 48.8 (48.8 expected). Elsewhere, Spain's Manufacturing PMI increased to 52.2 from 50.8 (51.5 forecast), Great Britain's Manufacturing PMI fell to 56.7 from 57.2 (57.0 forecast), and Italy's Manufacturing PMI ticked down to 53.1 from 53.3 (53.5 consensus).

In news, Greece was back in focus over the weekend after Kathimerini revealed that government documents show the country has fallen behind on a long list of reforms demanded by the troika. Separately, Germany's Der Spiegel has learned Finance Minister Wolfgang Schaeuble is preparing a third aid package for Greece. The amount is expected between EUR10-20 billion.

Great Britain's FTSE is higher by 0.3% as consumer names display strength. Diageo and Reckitt Benckiser hold respective gains of 1.5% and 3.0%. On the downside, Aberdeen Asset Management, Barclays, Lloyds Banking Group and down between 1.0% and 2.6%.
In France, the CAC is unchanged. Consumer names and utilities outperform with Danone and Veolia Environnement both up near 1.5%. Financials weigh as AXA, BNP Paribas, and Credit Agricole display losses between 1.0% and 2.6%.
Germany's DAX is lower by 0.1%. Allianz and Deutsche Bank hold respective losses of 1.1% and 0.8% while defensive names outperform. Fresenius Medical Care is higher by 1.1% and Merck trades up 1.9%.

8:29 am: [BRIEFING.COM] S&P futures vs fair value: +2.60. Nasdaq futures vs fair value: +4.70. After posting its first losing month since August, the stock market is on track to begin February on a relatively quiet note. Over the weekend, China released its latest set of PMI figures, which confirmed the slowdown in growth indicated by HSBC PMI data. Manufacturing PMI came in at a six-month low (50.5 from 51.0) while the non-manufacturing reading (53.4 from 54.6) marked an 11-month low. Chinese markets, however, have yet to react to the news as they remain closed for Lunar New Year.

Domestically, there aren't many earnings reports on today's schedule and economic data will be limited to just two reports-December construction spending and the ISM Index for January will both be reported at 10:00 ET.

On the earnings front, Sysco (SYY 35.13, +0.05) trades higher by 0.1% after reporting in-line earnings on below-consensus revenue.

7:56 am: [BRIEFING.COM] S&P futures vs fair value: +1.70. Nasdaq futures vs fair value: +3.20. U.S. equity futures trade little changed amid cautious overseas action. The S&P 500 futures hover two points above fair value.

Reviewing overnight developments:

Asian markets ended lower. Japan's Nikkei -2.0%, South Korea's Kospi -1.1%, and India's Sensex -1.5%. Elsewhere China's Shanghai Composite and Hong Kong's Hang Seng remained closed for Lunar New Year.
In economic data:
China's Manufacturing PMI slipped to 50.5 from 51.0, as expected. Separately, Non-Manufacturing PMI fell to 53.4 from 54.6.
South Korea's trade surplus narrowed to $735 million from $3.65 billion ($1.63 billion expected). HSBC Manufacturing PMI ticked up to 50.9 to from 50.8.
Australia's AIG Manufacturing Index fell to 46.7 from 47.6, MI Inflation Gauge increased 0.1% month-over-month (0.7% prior), ANZ Job Advertisements slipped 0.3% month-over-month (-0.7% last), and Building Approvals fell 2.9% month-over-month (-0.3% expected, -0.3% prior). Also of note, Commodity Prices decreased 9.9% year-over-year (-4.0% previous).
Indonesia's trade surplus widened to $1.52 billion from $0.78 billion ($0.55 billion expected) and inflation rose 8.22% year-over-year (8.38% expected, 8.38% previous).
Among news of note:
Similar to data reported by HSBC, China's official PMI figures came in at multi-month lows. Manufacturing PMI came in at a six-month low while the non-manufacturing reading marked an 11-month low.
Major European indices hover in the red. Great Britain's FTSE -0.2%, France's CAC -0.3%, and Germany's DAX -0.4%. Elsewhere, Spain's IBEX -0.4% and Italy's MIB -0.7%.
Participants received several economic data points:
Eurozone Manufacturing PMI rose to 54.0 from 53.9 (53.9 expected).
Germany's Manufacturing PMI increased to 56.5 from 56.3 (56.3 consensus).
Great Britain's Manufacturing PMI fell to 56.7 from 57.2 (57.0 forecast).
French Manufacturing PMI increased to 49.3 from 48.8 (48.8 expected).
Italy's Manufacturing PMI ticked down to 53.1 from 53.3 (53.5 consensus).
Spain's Manufacturing PMI increased to 52.2 from 50.8 (51.5 forecast).
In news:
Greece was back in focus over the weekend after Kathimerini revealed that government documents show the country has fallen behind on a long list of reforms demanded by the troika. Separately, Germany's Der Spiegel has learned Finance Minister Wolfgang Schaeuble is preparing a third aid package for Greece. The amount is expected between EUR10-20 billion.

In U.S. corporate news:

Goldman Sachs (GS 165.60, +1.48): +0.9% after Guggenheim upgraded the stock to 'Buy' from 'Neutral.'
Pfizer (PFE 30.59, +0.19): +0.6% after announcing positive top-line results from one of its experimental breast cancer treatments.
Time Warner Cable (TWC 136.35, +3.08): +2.3% amid Reuters reports Charter Communications (CHTR 137.00, 0.00) is considering bidding more than $140 per share for Time Warner.

Today's economic data will be limited to December construction spending and the January ISM Index. Both reports will be released at 10:00 ET.

6:37 am: [BRIEFING.COM] Nikkei...14619.13...-295.40...-2.00%. Hang Seng...Holiday.........

6:37 am: [BRIEFING.COM] FTSE...6493.71...-45.10...-0.70%. DAX...9240.13...-65.80...-0.70%.

6:35 am: [BRIEFING.COM] S&P futures vs fair value: -5.00. Nasdaq futures vs fair value: -11.50.

U.S. Stocks Slump Most Since June Amid Weak Factory Data

By Lu Wang Feb 3, 2014 4:33 PM ET

U.S. stocks fell, sending benchmark indexes to their biggest declines since June, as manufacturing in the world’s largest economy slowed more than estimated.

All but nine stocks in the Standard & Poor’s 500 Index slipped, the broadest decline since April. Telephone shares plunged after AT&T Inc. introduced new service plans, the latest in an escalating price war among wireless carriers. Ford Motor Co. and General Motors Co. fell at least 2.3 percent after reporting declines in January auto sales. Jos. A. Bank Clothiers Inc. slid 5 percent after telling Men’s Wearhouse Inc. it will not enter takeover talks.

The S&P 500 fell 2.3 percent to 1,741.89 at 4 p.m. in New York, the lowest close since Oct. 17. The Dow Jones Industrial Average lost 326.05 points, or 2.1 percent, to 15,372.80. The gauge has fallen 7.3 percent this year to a three-month low. About 9.5 billion shares changed hands on U.S. exchanges today, the busiest trading since Dec. 20.

“Everyone walked in this year expecting a continuation of at least growing economic activity and the latest data we’ve been seeing throw a bit of cold water on that theory,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pennsylvania, said by phone. “Economic activity was not as strong as people expected. People are taking a pause, reassessing where they stand.”

January Retreat

The S&P 500 reached a record 1,848.38 on Jan. 15 and has since fallen 5.8 percent. The market last produced a loss of at least 5 percent in June, when the index dropped 5.8 percent from a May high. The seven months between declines of at least 5 percent was the longest stretch since late 2006, according to Bespoke Investment Group LLC.

The benchmark for American equities sank 3.6 percent in January, its worst opening month since 2010, as the gauge dropped in each of the month’s final three weeks, the longest streak since 2012. Stocks fell as the Federal Reserve trimmed its bond-buying program for the second time in as many months and emerging-market currencies tumbled amid signs growth was slowing in China. The country’s official Purchasing Managers’ Index decreased to a six-month low in January as output and orders slowed.

Data today showed factory activity in the U.S. expanded in January at the weakest pace in eight months as orders slumped, a sign manufacturing cooled at the start of the year along with the weather.

Factory Data

The Institute for Supply Management’s factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona-based group’s report showed. The median forecast of 85 economists surveyed by Bloomberg called for a decrease to 56. Readings above 50 indicate expansion.

Fed policy makers said on Jan. 29 that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

Three rounds of Fed bond buying has helped drive the S&P 500 up 157 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns.

“The market is adjusting to the Fed taking the punch bowl away,” Douglas Cote, chief market strategist at ING U.S. Investment Management in New York, in a telephone interview. His firm oversees about $200 billion. “The fundamentals remain solid. Even though we’re in the correction phase, ultimately the path for the market is up.”

Debt Ceiling

Treasury Secretary Jacob J. Lew today said the U.S. risks breaching the federal debt limit by the end of this month and called on Congress to raise it immediately to sustain economic momentum. The debt ceiling was suspended through Feb. 7 under an agreement between President Barack Obama and congressional Republicans in October. The Treasury Department uses so-called extraordinary measures, or accounting maneuvers, stay under the ceiling.

Anadarko Petroleum Corp. and Yum! Brands Inc. are among 11 S&P 500 companies reporting earnings today. Profit at companies in the benchmark gauge probably increased by 8.3 percent in the fourth quarter of 2013 and their revenue by 2.5 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index jumped 16 percent today to 21.44, the highest level since December 2012. The gauge of S&P 500 options known as the VIX is up 56 percent this year.

Broad Declines

The Nasdaq Composite Index plunged 2.6 percent for its biggest decline since June 2012. The Russell 2000 (RTY) Index slumped 3.2 percent for its steepest slide since April and the Dow Jones Transportation Average lost 3.2 percent to its lowest since November.

All 10 main S&P 500 groups retreated at least 0.8 percent. Financial, industrial and consumer-discretionary stocks fell more than 2.5 percent.

Phone stocks plunged 3.7 percent, the most since August 2011, to lead declines. AT&T dropped 4.1 percent to $31.95 for the biggest loss in the Dow, while Verizon Communications Inc. fell 3.4 percent to $46.41.

AT&T’s new offer cuts $40 a month from premium users’ bills. The move is an escalation of competition in the mobile market where AT&T and T-Mobile US Inc. have run back-and-forth attack ads and offered $450 in credit to entice customers to switch service providers.

Ford fell 2.7 percent to $14.55, the seventh drop in eight days that left the stock at its lowest level since May. GM slipped 2.3 percent to $35.25. The largest U.S. automakers reported wider declines in deliveries than analysts estimated as the coldest January in two decades kept some shoppers from dealerships. Sales of cars and light trucks fell 12 percent for GM and 7.5 percent for Ford, according to company statements.

Buyout Talks

Jos. A. Bank dropped 5 percent to $53.39. The retailer, which told Men’s Wearhouse Inc. it won’t enter buyout talks, has been looking at other acquisitions including retailer Eddie Bauer, people familiar with the matter said.

Pfizer Inc. added 0.7 percent to $30.60 for the only gain in the 30-stock Dow index. The world’s largest drugmaker said a phase 2 trial of palbociclib plus letrozole achieved its primary endpoint in treating post-menopausal women with advanced breast cancer.

ArthroCare (ARTC) Corp. rallied 8.2 percent to $49.12. Smith & Nephew Plc agreed to buy the company for $48.25 a share, or $1.7 billion in cash, to add products for minimally invasive surgery used in sports medicine.

Special thanks to Bloomberg, CNNMoney, Reuters 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

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