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)
http://twitter.com/wrbtrader (24/7)


click on the above image to view today's performance verification

Price Action Trade Performance for Today: Emini TF ($TF_F) futures @ $1,530.00 dollars or +15.30 points, Emini ES ($ES_F) futures @ $0.00 dollars or +0.00 points, Light Crude Oil CL ($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 @ $1,530.00 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 timestamp ##TheStrategyLab chat room. You can read today's price action trading information about my trades (e.g. time, price entry, contract size, price exit) as the trade traversed to its completion. Also, sometimes I'll post real-time trading tips involving WRBs, WRB Hidden GAPs, Key Market Events (KME), Tutorial Chapters 2 & 3, WRB Zones, Reaction Highs/Lows, Contracting Volatility or Expanding Volatility. Its all archived @ http://www.thestrategylab.com/ftchat/forum/viewtopic.php?f=135&t=1905


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) general volatility analysis involving WRB Analysis 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 and I do not have the time/energy/resources to manage a signal calling chat room. Access instructions for chat room @ 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=248&t=2530

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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. Further, most financial websites remove (delete) their archives after a few years to make room for new content. Therefore, I maintain my own archives of the news content so that I have it available for me when financial websites no longer archives their content.


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

4:10 pm: [BRIEFING.COM] The stock market ended the Tuesday session on the lows after spending the entire day in negative territory. The Russell 2000 led the way, sliding 1.7%, while the S&P 500 lost 1.5% with all ten sectors ending in the red.

Equity indices were pressured from the start with the early weakness being attributed to a disappointing Industrial Production report from Germany (-4.0%; expected -1.5%), which represented the largest drop in activity in almost six years. Growth concerns were also on the mind of IMF economists as the Fund lowered its 2015 global growth forecast to 3.8% from 4.0%.

Fittingly, the macroeconomic worries weighed on most cyclical sectors, while energy (-1.3%) tried to withstand the broad pressure. The sector, which lost 3.8% last week, displayed modest intraday strength, but slumped in the afternoon amid a noteworthy drop in crude prices (-1.7% to $88.81/bbl).

Elsewhere among cyclical sectors, the industrial space (-2.4%) spent the bulk of the day at the bottom of the leaderboard. Transports contributed to the weakness, but defense stocks did not fare much better as evidenced by a 2.1% decline in the PHLX Defense Index. As for transports, the Dow Jones Transportation Average lost 2.5% to widen this week's decline to 3.6%.

Other high-growth areas like chipmakers and biotechnology also struggled to keep up with the broader market. The PHLX Semiconductor Index lost 1.9% to extend its month-to-date decline to 5.1% with just five October sessions in the rear-view mirror.

For its part, the biotech group slumped at the open, halved its loss by midday, but returned to lows before the close. The iShares Nasdaq Biotechnology ETF (IBB 266.62, -5.10) lost 1.9%, while the health care sector (-1.6%) ended among the laggards.

Meanwhile, the remaining countercyclical sectors displayed slimmer losses than the broader market with utilities (-0.1%) registering the smallest decline.

Generally speaking, today's retreat reflected big picture concerns, thus putting corporate-specific developments on the backburner. To that latter point, Sodastream (SODA 21.52, -6.05) plunged 21.9% after guiding Q3 results well below analyst estimates. On a similar note, AGCO Corporation (AGCO 42.13, -4.97) sank 10.6% after priming the market for disappointing results.

The broad retreat fueled increased demand for volatility protection, sending the CBOE Volatility Index (VIX 17.21, +1.75) to its highest close since mid-March.

The safe-haven demand underpinned Treasuries with the 10-yr note (+21/32) spending the entire day in a steady rally. As a result, the benchmark yield fell eight basis points to 2.34%.

Today's participation was ahead of average with more than 770 million shares changing hands at the NYSE.

Economic data was limited to JOLTS and Consumer Credit:

The Job Openings and Labor Turnover Survey for August indicated job opening increased to 4.835 million from 4.605 million
Consumer credit increased by $13.50 billion in August, down from a downwardly revised $21.60 billion (from $26.00 billion) in July, while the Briefing.com consensus expected an increase of $20.00 billion

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, while the minutes from the Sept 17 FOMC meeting will be released at 14:00 ET.

Nasdaq Composite +5.0% YTD
S&P 500 +4.7% YTD
Dow Jones Industrial Average +0.9% YTD
Russell 2000 -7.5% YTD

3:30 pm: [BRIEFING.COM]

Gold rallied shortly after the pit session open in a continuation of yesterday's strength, still popping off of last Friday's first dip of the year below $1,200. The metal closed higher by 0.4%.
Silver started off the pit session in relatively tight range, but opposite gold, the metal began trickling lower for most of the day, but still managed to squeak out a 0.1% gain.
Crude moved lower today, by 1.6%, falling with stocks after the IMF cut its global growth forecasts, nearing but not touching what would have been its lowest close in 17 months.
Natural gas rose 1.3% today following yesterdays decline on forecasts calling for milder weather; Dec futures overtook yesterday's pit session highs closing up nearly 1.3%.

3:00 pm: [BRIEFING.COM] The S&P 500 (-1.0%) has slipped to a fresh low with one hour remaining in the session. The utilities sector (+0.6%) is the lone advancer, while five sectors display losses of 1.0% or more.

The Consumer Credit report for August was just released by the Federal Reserve and it showed that consumer credit increased by $13.50 billion. That was lower than the Briefing.com consensus estimate of $20.00 billion. The prior month's credit growth was revised to $21.60 billion.

2:30 pm: [BRIEFING.COM] There has been a defensive approach to today's market as growth concerns predominate with the weak data out of Germany, the continued weakness in the Russell 2000 (-0.8%), and the developing underperformance of the Dow Jones Transportation Average (-1.6%).

The only sectors showing a gain at this time are the defensive-oriented utilities (+0.7%) and consumer staples (+0.1%) sectors; meanwhile, longer-dated Treasuries are rallying with participants showing little fear of inflation pressures.

The 10-yr note is up 18 ticks and its yield has dropped seven basis points to 2.36%. That solid move is tied in with the aforementioned growth concerns as U.S. equity investors are cutting risk exposure in cyclical sectors and European investors are seeking yield with recession concerns and ECB policy driving down regional rates and the euro.

Coca-Cola (KO 44.04, +0.44), Procter & Gamble (PG 83.68, +0.11), AT&T (T 33.51, +0.02), and Wal-Mart (WMT 77.60, +0.25) are the only Dow components trading higher at this time.

1:55 pm: [BRIEFING.COM] The S&P 500 began today's session in the 1958 area after ending yesterday's affair just north of the 1965 level. The benchmark index then slipped to a session low near 1947 and has been bouncing between that mark and its opening level throughout the session.

Interestingly, dip buyers have had all day to place their bets, but with just two hours left in the session, five of six cyclical sectors continue trailing the broader market. Furthermore, the energy sector (-0.1%) held a modest gain not too long ago, but the group has returned into the red as crude oil slumped into the pit close (-1.3% at $89.14/bbl).

1:30 pm: [BRIEFING.COM] The S&P 500 (-0.5%) remains pressured amid weakness in heavily-weighted sectors. The top-weighted group-technology (-0.7%)-trails the broader market even as the largest component-Apple (AAPL 99.54, -0.09)-trades little changed.

However, other top-weighted sector members have not held up nearly as well. Google (GOOGL 580.33, -7.45) is lower by 1.3%, while Intel (INTC 33.67, -0.44), Microsoft (MSFT 45.64, -0.45) and Qualcomm (QCOM 73.98, -0.74) display comparable losses.

On a separate note, the Treasury has concluded a $27 billion 30-yr note auction, which drew a yield of 0.994% with a bid/cover ratio of 3.42x.

1:00 pm: [BRIEFING.COM] The major averages trade broadly lower at midday with the S&P 500 down 0.7%. The benchmark index has fared a bit better than the blue-chip Dow, which is lower by 0.8% at this juncture.

Equity indices slumped out of the gate amid weakness in European equities. The cautious posture overseas stemmed from a disappointing Industrial Production report from Germany (-4.0%; expected -1.5%), which led to a short-lived retreat in the euro. The single currency fell below the 1.2600 level in the morning, but has worked its way back to 1.2650 against the dollar. In turn, this has contributed to a modest decline in the Dollar Index (85.74, -0.19).

As for equities, cyclical sectors have been responsible for the bulk of today's retreat with five of six growth-sensitive groups trailing the broader market. Currently, the industrial sector (-1.2%) sits at the bottom of the leaderboard with transports contributing to the underperformance. The Dow Jones Transportation Average is lower by 1.2% today, and is now down 2.4% since Friday.

Similar to industrials, heavily-weighted consumer discretionary (-0.8%), financials (-0.9%), and technology (-0.8%) sectors also trail the broader market.

On the upside, the energy sector (+0.1%) is the lone cyclical outperformer despite continued weakness in crude prices (-0.8% at $89.58/bbl).

Meanwhile, the countercyclical side has had a mixed showing with consumer staples (+0.1%), telecom services (-0.3%), and utilities (+0.6%) displaying relative strength, while health care (-1.0%) lags. Biotechnology has factored into the weakness, but the iShares Nasdaq Biotechnology ETF (IBB 269.37, -2.35) has narrowed its loss to 0.9% after being down near 2.0% at the start of the session.

Treasuries have been climbing steadily since this morning and the 10-yr note is currently higher by half a point with its yield down six basis points at 2.37%.

Economic data released this morning was limited to the Job Openings and Labor Turnover Survey for August, which indicated job opening increased to 4.835 million from 4.605 million.

The Consumer Credit report for August (Briefing.com consensus $20.00 billion) will cross the wires at 15:00 ET.

12:30 pm: [BRIEFING.COM] Recent action saw the S&P 500 (-0.5%) embark on another rebound attempt. The benchmark index has strung together an eight-point rally over the past hour with the 100-day moving average (1961) lurking roughly five points above the current level.

Last Wednesday, the S&P 500 fell below its 100-day average and has been trading in the neighborhood of that level since then. Furthermore, last Thursday represented the first time that the benchmark index spent the entire day below its 100-day average since early February.

Elsewhere, the Nasdaq Composite marked today's session low just below the 100-day average of its own (4418).

12:00 pm: [BRIEFING.COM] Not much change in the major averages with the S&P 500 (-0.6%) trading within a few points of its session low.

The industrial sector (-1.0%) has trailed the remaining cyclical groups from the start amid notable weakness in transport stocks. At this time, all 20 components of the Dow Jones Transportation Average hover in the red with 13 of 20 showing losses in excess of 1.0%. Including today's decline, the bellwether complex is down 1.9% since the end of September.

However, it is worth mentioning that the recent pullback has narrowed DJTA's year-to-date gain to 12.0%, which still leaves the group well ahead of the S&P 500, which has added 5.7% so far this year.

11:25 am: [BRIEFING.COM] The S&P 500 (-0.8%) has slipped back near its early low after being unable to climb above its opening level. Generally speaking, cyclical sectors have been responsible for the bulk of today's losses as five of six growth-oriented sectors trail the broader market. The energy sector (+0.3%) is the lone outperformer among cyclical groups, but this comes after the sector plunged 3.8% last week.

Meanwhile on the countercyclical side, the health care sector (-1.3%) is the only group that has been unable to keep pace with the broader market. Biotechnology remains weak, but the iShares Nasdaq Biotechnology ETF (IBB 268.56, -3.16) has narrowed its loss to 1.2% after being down in excess of 2.0% at the start of the session.

Elsewhere, Treasuries have climbed to fresh highs, pressuring the benchmark 10-yr yield to 2.38% (-5 bps).

10:55 am: [BRIEFING.COM] Equity indices remain under pressure with the Dow Jones Industrial Average (-0.5%) trading a bit behind the S&P 500 (-0.4%).

Three sectors-consumer staples (+0.1%), energy (+0.6%), and utilities (+0.1%)-have erased their early losses, while the remaining seven groups are down between 0.3% (telecom services) and 0.9% (industrials). To that point, the industrial sector lags amid weakness in transport stocks. The Dow Jones Transportation Average is lower by 1.0% with 19 of its 20 components in the red. Defense contractors also lag with PHLX Defense Index trading down 0.7%.

On the upside, the energy sector sits in the lead even with crude oil down 0.8% at $89.63/bbl.

10:30 am: [BRIEFING.COM]

The dollar index slide lower in morning trade and is now back in the red. It's currently down 0.1% at 85.85
Energy is mixed this morning with WTI crude oil near its LoD, which was just recently hit and natural gas near its HoD, which was just recently hit
Nov crude oil is currently -1.1% at $89.38/barrel, while Nov nat gas is +0.9% at $3.93/MMBtu
Precious metals are inverse of each other this morning.
Dec gold is holding a modest gain of +0.2% at $1209.30/oz, while Dec silver is sliding lower and just hit a new LoD. Silver is now -0.4% at $17.16/oz
Dec copper is -0.3% at $3.03/lb

10:00 am: [BRIEFING.COM] The S&P 500 (-0.8%) remains near its opening low with nine sectors holding losses. The rate-sensitive utilities sector (+0.2%) is the lone advancer at this juncture, while the consumer staples sector (-0.1%) follows not far behind.

Treasuries have continued their advance, pressuring the benchmark 10-yr yield down to 2.38% (-4 bps).

Just released, the Job Openings and Labor Turnover Survey for August indicated job opening increased to 4.835 million from 4.605 million.

9:40 am: [BRIEFING.COM] The major averages slumped out of the gate amid weakness in all ten sectors. The S&P 500 trades lower by 0.8% with the health care space (-0.9%) leading the opening retreat. Biotechnology is largely responsible for the early relative weakness with the iShares Nasdaq Biotechnology ETF (IBB 266.85, -4.87) down 1.8%. In turn, this has weighed on the Nasdaq Composite (-0.9%).

Health care notwithstanding, other influential sectors like consumer discretionary (-1.0%), financials (-1.1%), and industrials (-1.2%) also trail the broader market.

Treasuries have extended their gains with the 10-yr yield now down three basis points at 2.39%.

9:12 am: [BRIEFING.COM] S&P futures vs fair value: -6.40. Nasdaq futures vs fair value: -8.50. The stock market is on track for a cautious start to the session as futures on the S&P 500 trade six points below fair value. However, the current level represents an improvement after futures were down nearly 14 points earlier in the night. The weakness followed a disappointing Industrial Production report from Germany (-4.0%; expected -1.5%), which has pressured the euro/dollar pair into the 1.2600 area. Similar to U.S. futures, the euro has climbed off its worst level of the night, but remains lower against the dollar (-30 pips).

Participants in the U.S. did not receive any economic data this morning, but the Job Openings and Labor Turnover Survey for August will be released at 10:00 ET, while the August Consumer Credit report (Briefing.com consensus $20.00 billion) will cross the wires at 15:00 ET.

On the corporate front, Sodastream (SODA 22.64, -4.93) is indicated to open lower by 17.9% after guiding Q3 results well below consensus estimates. On a similar note, AGCO (AGCO 43.50, -3.60) and The Container Store (TCS 18.66, -3.23) also issued disappointing guidance.

Treasuries are on their highs with the 10-yr yield down two basis points at 2.40%.

8:57 am: [BRIEFING.COM] S&P futures vs fair value: -6.30. Nasdaq futures vs fair value: -8.30. The S&P 500 futures trade six points below fair value.

Markets ended mixed across Asia. The Bank of Japan kept policy on hold, but Governor Haruhiko Kuroda reiterated the central bank is ready to provide more easing if needed. However, dissent has begun to grow against the language calling for 2.0% inflation within two years. Elsewhere, the Reserve Bank of Australia held its Cash Rate unchanged at 2.50% for the 14th meeting in a row. Also of note, pro-democracy protests in Hong Kong persisted for the 12th day, but have begun to show signs of dwindling.

In economic data:
Japan's Leading Index fell to 104.0 from 105.4 (expected 104.2)
Hong Kong's Manufacturing PMI ticked down to 49.8 from 49.6 (consensus 50.7)
India's HSBC Services PMI rose to 51.6 from 50.6 (expected 50.9)
Australia's AIG Construction Index rose to 59.1 from 55.0

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Japan's Nikkei fell 0.7% as the yen strengthened. Fujifilm rallied to its best level in six years following word its drug is being considered for more widespread use after reportedly treating some Ebola patients.
Hong Kong's Hang Seng rose 0.5%, climbing for the third consecutive session. Casino stocks continued to see volatility as Sands China added 0.7% while MGM China shed 0.9%.
China's Shanghai Composite was closed for Golden Week, but will reopen tomorrow.
India's Sensex fell 1.1% to its lowest levels since mid-October. Pharma weighed as Cipla and Dr. Reddy's Laboratories lost 3.5% and 3.2%, respectively.

Major European indices trade lower across the board. In France, Finance Minister Michel Sapin said the European Commission lacks the authority to reject a budget due to missed deficit targets, signaling the country will present a weaker budget than previously expected.

Participants received several data points:
Germany's Industrial Production fell 4.0% month-over-month (expected -1.5%; prior 1.6%)
France's government budget deficit widened to EUR94.10 billion from EUR84.10 billion
Great Britain's Industrial Production was unchanged month-over-month (expected 0.2%; previous 0.4%), while the year-over-year reading rose 2.5% (consensus 2.6%; last 2.2%). Separately, Manufacturing Production ticked up 0.1% month-over-month, as expected
Swiss Retail Sales rose 1.9% year-over-year (expected 0.7%; previous -0.3%). Separately, CPI ticked up 0.1% month-over-month (expected 0.2%; prior 0.0%), while the year-over-year reading fell 0.1% (consensus 0.0%; last 0.1%)

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Great Britain's FTSE is lower by 0.4% with consumer names leading the retreat. Airlines easyJet and International Consolidated Airlines are both down near 6.0%, while Carnival, TUI Travel, and InterContinental Hotels hold losses between 1.9% and 3.8%. Rio Tinto trades higher by 5.3% after rejecting Glencore's takeover offer.
Germany's DAX trades lower by 0.5% amid weakness in financials. Commerzbank has given up 2.4% and Deutsche Bank holds a loss of 1.5%. Lanxess outperforms with a gain of 2.0%.
In France, the CAC trades down 1.0%. Technip is the weakest performer, down 2.1%. Steelmaker Valeo outperforms with a solid gain of 1.7%.
Spain's IBEX has given up 1.4% amid weakness in most components. Construction names lag with Abengoa, Acciona, and Sacyr down between 2.8% and 8.0%.

8:26 am: [BRIEFING.COM] S&P futures vs fair value: -5.10. Nasdaq futures vs fair value: -4.80. U.S. equity futures continue hovering in the red, but they have been able to erase the bulk of their losses. The S&P 500 futures were down as much as 13 points below fair value, but have narrowed their loss to five points.

The rebound off the lows has coincided with the Dollar Index bouncing off an overnight low of its own. Currently, the Dollar Index is flat, but that has masked some euro weakness (EURUSD -40 pips), which resulted from a disappointing Industrial Production report from Germany (-4.0%; expected -1.5%).

8:01 am: [BRIEFING.COM] S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -7.80. U.S. equity futures hold modest losses amid cautious action overseas. The S&P 500 futures hover six points below fair value after spending the entire night in negative territory. Futures slumped following a disappointing Industrial Production report from Germany (-4.0%; expected -1.5%), which has pressured the euro back below the 1.2600 level against the dollar. Conversely, the Dollar Index (86.01, +0.07) has received a modest boost after slumping from a four-year high yesterday.

Treasuries hold modest gains with the 10-yr yield down one basis point at 2.41%.

In U.S. corporate news of note:

AGCO Corporation (AGCO 42.14, -4.96): -10.5% after guiding Q3 results below analyst expectations
CalAmp (CAMP 17.86, +1.36): +8.2% after beating bottom-line estimates on in-line revenue
Container Store (TCS 18.75, -3.14): -14.3% after missing revenue estimates and guiding below analyst estimates
SodaStream (SODA 24.00, -3.57): -13.0% after priming the market for disappointing Q3 results


The Job Openings and Labor Turnover Survey for August will be released at 10:00 ET, while August Consumer Credit (Briefing.com consensus $20.00 billion) will cross the wires at 15:00 ET.

Reviewing overnight developments:

Asian markets ended mixed. Japan's Nikkei -0.7%, Hong Kong's Hang Seng +0.5%, and China's Shanghai Composite was closed
In economic data:
Japan's Leading Index fell to 104.0 from 105.4 (expected 104.2)
Hong Kong's Manufacturing PMI ticked down to 49.8 from 49.6 (consensus 50.7)
India's HSBC Services PMI rose to 51.6 from 50.6 (expected 50.9) Australia's AIG Construction Index rose to 59.1 from 55.0
In news:
The Reserve Bank of Australia made no changes to its policy, keeping its rate at 2.5%, as expected
The Bank of Japan also left its key rate unchanged at 0.1%, as expected. Furthermore, Governor Haruhiko Kuroda said more easing can be implemented, if needed
Bank Indonesia made no changes to its policy, keeping its key rate at 7.5%, as expected
Major European indices trade lower across the board. Great Britain's FTSE -0.6%, Germany's DAX -0.8%, and France's CAC -1.1%. Elsewhere, Italy's MIB -1.1% and Spain's IBEX -1.6%
Participants received several data points:
Germany's Industrial Production fell 4.0% month-over-month (expected -1.5%; prior 1.6%)
France's government budget deficit widened to EUR94.10 billion from EUR84.10 billion
Great Britain's Industrial Production was unchanged month-over-month (expected 0.2%; previous 0.4%), while the year-over-year reading rose 2.5% (consensus 2.6%; last 2.2%). Separately, Manufacturing Production ticked up 0.1% month-over-month, as expected
Swiss Retail Sales rose 1.9% year-over-year (expected 0.7%; previous -0.3%). Separately, CPI ticked up 0.1% month-over-month (expected 0.2%; prior 0.0%), while the year-over-year reading fell 0.1% (consensus 0.0%; last 0.1%)
In news:
In France, Finance Minister Michel Sapin said the European Commission lacks the authority to reject a budget due to missed deficit targets, signaling the country will present a weaker budget than previously expected.

6:32 am: [BRIEFING.COM] S&P futures vs fair value: -9.00. Nasdaq futures vs fair value: -15.00.

6:32 am: [BRIEFING.COM] Nikkei...15,783.83...+107.50...+0.50%. Hang Seng...23,422.52...-107.10...-0.70%.

6:32 am: [BRIEFING.COM] FTSE...6,522.88...-40.80...-0.60%. DAX...9,139.16...-70.40...-0.80%.

IMF Cuts Global Outlook as Risk of ‘Frothy’ Stocks Raised

By Andrew Mayeda Oct 7, 2014 1:23 PM ET

The International Monetary Fund cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach “frothy” levels.

The world economy will grow 3.8 percent next year, compared with a July forecast for 4 percent, after a 3.3 percent expansion this year, the Washington-based IMF said. U.S. growth is helping lead a worldwide acceleration that’s weaker than the fund predicted 2 1/2 months ago as the outlooks for the euro area, Brazil, Russia and Japan deteriorate.

“In advanced economies, the legacies of the precrisis boom and the subsequent crisis, including high private and public debt, still cast a shadow on the recovery,” the IMF said in its latest World Economic Outlook. “Emerging markets are adjusting to rates of economic growth lower than those reached in the precrisis boom and the postcrisis recovery.”

The outlook buttressed the case made by IMF Managing Director Christine Lagarde, who warned last week that officials need to act to prevent a prolonged period of sluggish growth, a trend she called the “New Mediocre.” Raising growth in emerging and advanced economies “must remain a priority,” the IMF report stated.

The Standard & Poor’s 500 Index declined for a second day, falling 0.7 percent to 1,950.79 at 1:07 p.m. in New York. The equity benchmark is about 3 percent lower than a record reached on Sept. 18. The MSCI World Index dropped 0.6 percent to 1,670.23.

According to the report, a sustained period of policy interest rates near zero in advanced economies has raised the risk that some financial markets may be overheating.

“Downside risks related to an equity price correction in 2014 have also risen, consistent with the notion that some valuations could be frothy,” the lender said without naming specific markets.

The U.S. is a bright spot, according to the IMF. The world’s largest economy is predicted to grow 2.2 percent this year, compared with a 1.7 percent projection in July. Next year, the the U.S. is seen expanding 3.1 percent, compared with a 3 percent pace forecast in July.

Fed Tightening

The IMF said it expects the Federal Reserve to start raising interest rates in the middle of next year, a projection that’s in line with the median estimate of economists surveyed by Bloomberg. The U.S. central bank has held the federal funds target rate near zero since December 2008.

“The slack in the economy, well-anchored inflation expectations, and downside risks to the outlook imply that the current accommodative monetary policy remains appropriate,” according to the fund.

The euro area will grow 1.3 percent next year, slower than the 1.5 percent pace predicted in July, after a 0.8 percent gain this year, according to the IMF.

“We see the major risk in the stalling of the euro zone,” IMF Economic Counselor Olivier Blanchard said in an interview on Bloomberg Television. “The risk of recession is there,” he said, adding that European authorities should increase infrastructure spending to boost growth.

If inflation doesn’t improve in the currency bloc, the European Central Bank may need to do more to stave off deflation, including the purchase of sovereign bonds, according to the fund.

Japan’s Expansion

Japan, where consumer spending has been curbed by a sales-tax increase, also had its outlook cut. The IMF said Japan’s economy will expand 0.8 percent next year, compared with a 1.1 percent advance predicted in July.

Among emerging markets, Brazil suffered the biggest cut to its growth outlook. The country’s economy is expected to grow 0.3 percent in 2014, down from the IMF forecast of 1.3 percent in July. The IMF now sees Brazil growing 1.4 percent next year, compared with 2 percent in July.

China is forecast to expand 7.4 percent this year and 7.1 percent next year, little changed from the fund’s forecasts in July.

The fund said it is concerned some investors may be “underpricing risk” and “not fully internalizing the uncertainties surrounding the macroeconomic outlook and their implications for the pace of withdrawal of monetary stimulus in some major advanced economies.”

Crisis Watch

The IMF’s ability to spot coming crises such as potential asset bubbles is the subject of debate among academics, former officials and its own staff.

An advisory panel that included former Russian Finance Minister Alexei Kudrin and former Mexican central bank governor Guillermo Ortiz reported last week that the fund is in danger of missing “the big risks” because it tries to spot “every risk ‘under the sun.’”

A staff assessment, released alongside the advisory report, said the IMF needs to better understand “how risks map across countries, and how spillovers can quickly spread across sectors to expose domestic vulnerabilities.”

In a statement accompanying the new growth forecasts, Blanchard warned of complacency.

“These risks should not be overplayed, but policy makers clearly must be on the lookout,” he said. “Macroprudential tools are the right instruments to mitigate these risks; whether they are up to the task, however, is an open question.”

Geopolitical Risks

The IMF said it is expecting a recession in Ukraine and stagnation in Russia in 2014, with the effects waning in 2015 and beyond. The effect could be broader if natural-gas and crude-oil markets are disrupted, according the fund.

In the Middle East, the IMF anticipates severe effects of military strife in Iraq and Libya. Oil prices could rise sharply if crude production is disrupted, the fund said.

Blanchard said the world economy faces a balancing act.

“On the one hand, countries must address the legacies of the global financial crisis, ranging from debt overhangs to high unemployment,” he said. “On the other, they face a cloudy future. Potential growth rates are being revised downward, and these worsened prospects are in turn affecting confidence, demand, and growth today.”

It is not unusual for the IMF’s forecasts to change. Since it first publicly projected 2014 growth in January 2013 with an estimate of 4.1 percent, it has revised its forecast seven times, leading to today’s projection of 3.3 percent.

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editors responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net Brendan Murray, Alister Bull

Gold Extends Rebound From 2014 Low as China Returns From Break

By Jasmine Ng and Glenys Sim Oct 7, 2014 10:54 PM ET

Gold rose as the drop to this year’s low lured Chinese buyers returning from a weeklong break, while investors awaited minutes of the Federal Reserve’s last meeting. Platinum extended a rally from a five-year low.

Bullion for immediate delivery climbed as much as 0.5 percent to $1,214.54 an ounce, and traded at $1,213.31 by 10:53 a.m. in Singapore, according to Bloomberg generic pricing. The metal dropped on Oct. 6 to $1,183.24, the lowest since Dec. 31. Platinum advanced for a third day as Russia and South Africa prepared to meet to discuss ways to buoy prices.

Gold is being supported as markets in China opened after being shut from Oct. 1-7, according to Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. Demand in India is set to pick up before the Diwali festival on Oct. 23, according to Mark Keenan, head of Asia commodities research at Societe Generale SA. China overtook India as the largest consumer last year.

“India and China’s robust growth in consumer demand will only benefit physical gold demand,” Joel Crane, an analyst at Morgan Stanley, wrote in a report today. In the near term, a stronger dollar and rising real U.S. interest rates will generate “considerable headwinds” for gold and other precious metals, he said.

The Bloomberg Dollar Spot Index was little changed before the Fed releases minutes of its Sept. 16-17 meeting, when monthly bond-buying was cut a seventh time and policy makers kept a pledge to hold rates near zero for a “considerable time.” Gold also rose as the MSCI All-Country World Index fell toward a five-month low after the International Monetary Fund cut its 2015 outlook for global growth.

Five-Year Low

A third day of gains today would be the longest rally in more than a month. Bullion for December delivery traded at $1,213.30 an ounce on the Comex in New York from $1,212.40 yesterday, when futures climbed for a second day. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, were unchanged for a third day yesterday at 767.47 metric tons, the least since December 2008.

Platinum for immediate delivery rose 0.7 percent to $1,267.44 an ounce after tumbling on Oct. 6 to $1,190.25, the lowest level since 2009. Palladium traded at $786.03 an ounce from $785.79 yesterday, when prices completed a two-day, 4 percent advance.

Russia and South Africa, together holding about 80 percent of the earth’s platinum-group metal reserves, are set to meet to discuss ways to buoy prices. Officials from Russia’s central bank and OAO GMK Norilsk Nickel, the biggest producer of palladium, will attend the meeting next month, said Natural Resources Minister Sergei Donskoi. One option is for the central banks to boost buying of platinum and palladium, he said.

“A concerted effort by the two largest PGM producers might be enough to arrest the decline,” ANZ’s Thianpiriya said by e-mail today. Spot silver rose 0.5 percent to $17.2761 an ounce.

To contact the reporters on this story: Jasmine Ng in Singapore at jng299@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Ovais Subhani

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

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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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