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 @ $3,010.00 dollars or +30.10 points, Emini ES ($ES_F) futures @ $0.00 dollars or +00.00 points, Light Crude Oil CL ($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 @ $3,010.00 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

Trade Log: 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 in ##TheStrategyLab chat room 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=137&t=1953


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 Advance WRB Analysis Tutorial Chapters @ 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

Analysis -----> Trade Signals

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).

All WRB Analysis Tutorial Chapters 1 - 12 are included in the purchase of the Volatility Trading Report (VTR).

Trading Plan Daily Routine @ http://www.thestrategylab.com/tsl/forum/viewtopic.php?f=252&t=2585

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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 slumped on Monday as the S&P 500 ended lower by 0.7% with seven sectors in the red. The price-weighted Dow (-0.6%) finished a little ahead of the benchmark index while the Nasdaq (-0.8%) and Russell 2000 (-1.3%) lagged.

Equity markets around the world started the new week on a mostly lower note. However, continued hopes for stimulus from the PBoC sent China's Shanghai Composite higher by 2.8% to extend its gain over the past month to 25.0%. The advance took place after the latest trade data showed a better than expected surplus of $54.47 billion, which resulted from a 6.7% drop in imports (expected +3.5%). Hopes for additional stimulus were also present in Europe, but the key indices there could not stay out of the red amid weakness in growth-sensitive listings.

Fittingly, cyclical sectors were also responsible for the weakness in the U.S. with energy (-3.9%) taking it on the chin amid another decline in crude oil. The sector gave back its entire advance from last week while Chevron (CVX 106.80, -4.07) and ExxonMobil (XOM 91.70, -2.12) lost 3.7% and 2.3%, respectively. As for crude oil, the energy component plunged 5.5% to $63.10/bbl, which represents the lowest level since August 2009. Oil was not the only weak spot among commodities as copper and iron ore also retreated following China's trade data. This kept the pressure on the materials sector (-1.6%), which settled only ahead of energy.

Elsewhere, the technology sector (-1.2%) held up relatively well through the morning, but slipped into the afternoon amid broad weakness. Apple (AAPL 112.40, -2.60), Intel (INTC 37.21, -0.46), and Microsoft (MSFT 47.70, -0.73) lost between 1.2% and 2.3% while the PHLX Semiconductor Index sank 1.4%.

Also of note, the consumer discretionary sector (-0.8%) underperformed with shares of McDonald's (MCD 92.61, -3.70) diving 3.8% after the fast food giant reported a 2.2% decline in global comparable store sales in November, paced by a 4.6% decline in U.S. sales.

Although cyclical sectors were responsible for the bulk of the weakness, financials (+0.4%) tried to resist the broad pressure. The sector climbed through the first two hours of action, but returned in the middle of its range by the close to maintain its market-leading December gain of 2.2%.

Meanwhile, the second-best performer of the month-health care (+0.3%)-followed the same pattern as financials. The sector received an early boost from biotechnology after Merck (MRK 61.88, +0.39) agreed to acquire Cubist Pharmaceuticals (CBST 100.60, +26.24) for $102/share, which represents a 35.0% premium to CBST's average stock price over the past five days. Cubist soared 35.3% while the iShares Nasdaq Biotechnology ETF (IBB 313.79, +4.98) jumped 1.6% to a new record high.

Treasuries ended the day near their highs with the 10-yr yield slipping five basis points to 2.26%. However, the front of the curve saw little change with the 2-yr yield slipping one basis point to 0.64%.

For its part, the Dollar Index (89.16, -0.18) took a step back from its multi-year high, but the index is still up more than 11.5% since May. That strength has prompted the Bank of International Settlements to issue a warning about the rising dollar and the potential impact to $1.1 trillion in dollar-denominated loans held by Chinese banks. The BIS said that continued dollar strength increases the potential for a credit shock being sent through East Asia.

Today's participation was in-line with average as roughly 794 million shares changed hands at the NYSE floor.

Tomorrow's economic data will be limited to October Wholesale Inventories (Briefing.com consensus 0.2%) and October JOLTS with both reports set to be released at 10:00 ET.

Nasdaq Composite +13.5% YTD
S&P 500 +11.5% YTD
Dow Jones Industrial Average +7.7% YTD
Russell 2000 +0.3% YTD

3:35 pm: [BRIEFING.COM]

Oil prices tanked today as oversupply concerns continue, which following OPEC's call of not reducing output on Thanksgiving
Jan crude oil dropped 5.5% to end the day at $63.10/barrel
Jan natural gas also tanked, dropping 5.3% to $3.60/MMBtu
Precious metals staged a late-day rally
Feb gold closed +$4.8 at $1195/oz, while Mar silver rose +0.02 to $16.28/oz
Mar copper lost 1 cent to $2.89/lb

2:55 pm: [BRIEFING.COM] The S&P 500 trades lower by 0.6% with one hour remaining in the session. The benchmark index spent the first three hours of the session near its flat line, but was pressured to lows by significant weakness among most cyclical sectors. The energy sector (-3.5%) has been at the center of the retreat as crude oil fell to its lowest level since August 2009.

On the upside, countercyclical sectors have held up relatively well with health care (+0.4%), telecom services (+0.5%), and utilities (+0.6%) holding modest gains while the consumer staples sector (-0.1%) has spent the bulk of the session near its flat line.

Elsewhere, Treasuries remain on their highs with the 10-yr yield down six basis points at 2.25%.

2:30 pm: [BRIEFING.COM] Not much let up to the continued selling pressure that has the S&P 500 trading lower by 0.9%. Like the market, the energy sector (-4.1%) sits at a fresh low while most other cyclical groups also trail the broader market.

To that point, consumer discretionary (-1.0%), industrials (-1.3%), materials (-1.7%), and technology (-1.4%) also trail the S&P 500 while the financial sector (+0.2%) has surrendered the bulk of its intraday gain. Similarly, the health care sector has narrowed its gain to just 0.2%, but biotechnology remains strong with the iShares Nasdaq Biotechnology ETF (IBB 313.16, +4.34) higher by 1.4%.

The biotech ETF is on track for a record close while the health care sector has extended its 2014 advance to 27.5%.

2:00 pm: [BRIEFING.COM] The S&P (-0.8%) has slipped to a fresh low amid continued weakness in the cyclical sectors.

The U.S. economic calendar is light for the first half of the week. Any trading off of economic news is likely the result of global economic factors.

Although German industrial production growth provided a positive surprise in October (Briefing.com Consensus 0.1%), growth decelerated substantially (0.2% from 1.4%) from its September level.

The Japanese recession was worse than originally reported. GDP declined 0.5% in the third quarter, down from a 0.4% decline in the preliminary release. The Briefing.com Consensus expected Q3 2014 GDP to be revised up to -0.1%.

Not all of the economic data was bad. China reported an increase in its trade surplus in November, from $45.4 bln in October to $54.4. That easily topped the Briefing.com Consensus expectation of $45.5 bln.

Housing starts in Canada increased 6.5% in November to 195,620, and was in-line with the Briefing.com Consensus forecast of 195,000. Building permits increased by 0.7%, down from a 12.5% gain in October.


1:35 pm: [BRIEFING.COM] In recent trade, U.S. equities remain near their lows of the day with the Dow Jones Industrial Average and S&P 500 both down 0.6%, while the Nasdaq is slightly lower, down 0.8%.

Financials are continuing their gains from Friday and outperforming on the day (+0.3%) while energy is showing the largest losses (-3.7%). The entire energy sector is being affected and driven lower by the continually lower price of crude oil. The benchmark for U.S. oil prices, West Texas Intermediate, is down 4% on the day to a new five-year low of $63.06.

Notably, the Dow Jones Transportation Average (-1.0%) has not rallied today as oil prices have continued to sag. That is owed primarily to weakness in the rails, which follows some analyst downgrades of Norfolk Southern (NSC) and Canadian Pacific (CP). Airlines, on the other hand, continue to enjoy the benefits of lower fuel costs, but have slipped from their best levels in conjunction with the broader market retreat.

12:55 pm: [BRIEFING.COM] The major averages trade lower across the board at midday with the Russell 2000 (-0.6%) and Nasdaq Composite (-0.5%) pacing the retreat. Meanwhile, the S&P 500 has given up 0.4% with five sectors in the red.

Equity indices have slipped to lows after spending the bulk of the morning near their flat lines, which reflected a battle between four influential sectors. On the upside, financials (+0.6%) and health care (+0.6%) have shown strength from the start with the health care sector receiving support from biotechnology after Merck (MRK 61.52, +0.03) agreed to acquire Cubist Pharmaceuticals (CBST 100.72, +26.36) for $102/share, which represents a 35.0% premium to CBST's average stock price over the past five days. Cubist has soared 35.5% while the iShares Nasdaq Biotechnology ETF (IBB 314.21, +5.40) trades higher by 1.8%.

Health care and financials represent nearly 30.0% of the entire market, but their strength has been unable to outweigh significant losses in energy (-3.1%) and technology (-1.0%), which account for roughly 29.0% of the S&P 500. Furthermore, consumer discretionary (-0.6%), industrials (-0.5%), and materials (-1.3%) also lag.

Notably, the energy sector has tumbled amid another plunge in crude oil, which is lower by 3.8% at $63.37/bbl. The energy sector outperformed last week, but the growth-sensitive group has retraced that move today. Chevron (CVX 107.26, -3.61) and ExxonMobil (XOM 92.12, -1.70) hold respective losses of 3.2% and 1.8% while the sector is now down 1.9% since the end of November.

Also of note, the top-weighted technology sector has led the market lower in recent going with some of its largest components fueling the move. Apple (AAPL 112.44, -2.56) and Intel (INTC 37.16, -0.51) hold respective losses of 2.2% and 1.3% while the PHLX Semiconductor Index is lower by 1.1%.

Short-dated Treasuries are little changed while longer maturities display gains. The 10-yr yield is lower by two basis points at 2.28% while the 30-yr yield has slipped four basis points to 2.93%.

12:30 pm: [BRIEFING.COM] Recent action saw the major averages dive to fresh lows in a move that was largely driven by weakness in the technology sector (-1.0%).

As mentioned earlier, the tech sector has been slipping steadily from its early high with top-weighted components like Apple (AAPL 112.53, -2.47), Microsoft (MSFT 47.94, -0.49), and Intel (INTC 37.09, -0.58) fueling the slide. The three names are currently down between 1.0% and 2.2%.

Elsewhere, financials (+0.5%) and health care (+0.5%) remain in the green, but both groups have pulled back from their highs.

With stocks under pressure, the CBOE Volatility Index (VIX 13.32, +1.50) hovers near its recently-established high as investors show demand for volatility protection.

11:55 am: [BRIEFING.COM] The major remain within a shouting distance of their respective flat lines. The Dow, Nasdaq, S&P 500, and Russell 2000 all trade with gains or losses of no more than 0.1%.

Heavily-weighted financials (+0.8%) and health care (+0.9%) have been able to pad their early gains, but the pair has been unable to lift the market, which remains pressured by a big plunge in the energy sector (-3.2%) and the steady retreat in technology (-0.5%). Similar to the tech sector, chipmakers have extended their losses with the PHLX Semiconductor Index now down 0.6%. Avago Technologies (AVGO 101.21, -2.76) is the weakest component, down 2.7%.

11:25 am: [BRIEFING.COM] Equity indices continue drifting near their recent levels with the S&P 500 holding a one-point loss. The benchmark index has yet to make a sustained move into the green as the energy sector (-2.9%) continues exerting pressure on the broader market.

Elsewhere, the technology sector traded in-line with the broader market in the early going, but the top-weighted group is now lower by 0.4%. The sector has retreated due in part to the significant weakness in the shares of Apple (AAPL 113.43, -1.57). The largest sector component is lower by 1.4% while other influential members trade mixed. Chipmakers trade a bit ahead of the sector, but behind the broader market with the PHLX Semiconductor Index down 0.3%.

Also of note, Treasuries have climbed to new highs. The 10-yr yield is lower by two basis points at 2.29%.

10:55 am: [BRIEFING.COM] The major averages hover near their best levels of the day with the Nasdaq Composite (+0.2%) holding a slim gain while the S&P 500 sits right below its flat line.

The benchmark index has been able to return to unchanged thanks to the continued strength in health care (+0.7%) while the financial sector (+0.7%) has also contributed to the rebound. However, the weakest performer of the day-energy-has widened its decline to 2.5% as crude remains under pressure. The energy component is lower by 3.0% at $63.89/bbl. As for major sector members, Chevron (CVX 107.47, -3.40) and ExxonMobil (XOM 92.39, -1.43) trade lower by 3.1% and 1.5%, respectively.

Outside of energy, the materials sector (-0.6%) is the only other group trading with a loss larger than 0.2%.

10:35 am: [BRIEFING.COM]

Technically, commodities are lower as measured by the CRB Commodity Index, which is -0.8% at 250.48
However, commodities are mixed overall this morning with energy futures in the red, metals mixed and agriculture mostly higher
Energy stocks are getting smashed again this morning following more weakness in oil and natural gas prices.
Currently, natural gas and oil futures are the worst performers in the commodities space this morning
As a results, energy stocks are getting smoke again this morning
This isn't driven by dollar action as the dollar index is currently flat (-0.05% at 89.24)
Jan crude oil fell as low as $64.10/barrel this morning and remains trading near today's low.
Jan crude is now -2.4% at $64.27/barrel. Brent crude is -2.7% at $67.23/barrel
Natural gas futures are -3.3% at $3.68/MMBtu
Mar silver is +0.2% at $16.30/oz, while Feb gold is +0.3 at $1193.80/oz
Mar copper is sitting +0.2% at $2.91/lb

9:55 am: [BRIEFING.COM] The S&P 500 (-0.1%) continues holding a slim loss, but the Nasdaq Composite (+0.1%) has recovered from the opening weakness thanks to strength in biotechnology after Cubist Pharmaceuticals (CBST 100.80, +26.44) was acquired by Merck (MRK 61.28, -0.21).

The resulting strength in the health care sector (+0.6%) has helped the S&P 500 erase the bulk of its opening loss, but five of six cyclical sectors remain in negative territory. Notably, the energy sector is lower by 1.9% while the top-weighted technology sector (-0.1%) trades in-line with the broader market.

Treasuries remain just above their flat lines with the 10-yr yield at 2.31%.

9:40 am: [BRIEFING.COM] The major averages began the session with modest losses. The S&P 500 trades lower by 0.1% with six sectors in the red.

Merck's (MRK 61.50, +0.02) acquisition of Cubist Pharmaceuticals (CBST 100.87, +26.51) has given a boost to the iShares Nasdaq Biotechnology ETF (IBB 312.99, +4.18), which trades higher by 1.4%. Meanwhile, the health care sector (+0.5%) is one of just four groups trading in the green. Similar to health care, two of the remaining three advancers-telecom services (+0.2%) and utilities (+0.2%)-come from the countercyclical side.

On the cyclical side, the financial sector trades slightly higher while the remaining groups hover in the red with energy (-1.5%) showing the largest decline amid a 2.1% drop in crude oil ($64.42/bbl).

9:11 am: [BRIEFING.COM] S&P futures vs fair value: -5.00. Nasdaq futures vs fair value: -13.50. The stock market is on track for a modestly lower open with futures on the S&P 500 trading five points below fair value. Index futures held their ground through the Asian session, but slumped to lows shortly before markets in Europe opened for action.

Japan was expected to revise its Q3 GDP to -0.1% quarter-over-quarter (-0.5% y/y) from -0.4% (-1.6% y/y), but instead the revision came in lower than expected at -0.5% quarter-over-quarter (-1.9% y/y). The bad data has boosted the yen, sending the dollar/yen pair lower by about 70 pips to 120.83.

Meanwhile in Europe, QE chatter has persisted, but that has not been able to prevent a broad decline with UK's FTSE (-0.9%) leading the weakness. European Central Bank member Ewald Nowotny commented on the region, saying he observed a "massive weakening" in the Eurozone and there is a high possibility of a lower inflation rate in the first quarter. Treasury yields are lower across the region with Germany's 10-yr down six basis points at 0.68% and Spain's 10-yr yield lower by three basis points at 1.79%.

Also of note, The Bank of International Settlements sounded a warning about the rising the dollar. The BIS said that continued dollar strength increases the risk of a credit shock being sent through Chinese banks that hold more than $1.1 trillion in dollar-denominated loans. The dollar index hovers just north of unchanged today and is up 12.0% since May.

On the corporate front, Cubist Pharmaceuticals (CBST 101.04, +26.68) has spiked 35.9% in pre-market action after agreeing to be acquired by Merck (MRK 61.49, 0.00) for $102/share, which represents a 35.0% premium to CBST's average stock price over the past five days. Elsewhere, McDonald's (MCD 93.42, -2.81) is indicated to open lower by 3.0% after reporting a 2.2% decline in global comparable store sales in November.

Treasuries hold slim gains with the 10-yr yield lower by a basis point at 2.30%.

8:58 am: [BRIEFING.COM] S&P futures vs fair value: -4.80. Nasdaq futures vs fair value: -12.80. The S&P 500 futures trade five points below fair value.

Markets in Asia started the trading week on a mixed note. China's Shanghai Composite surged 2.8% following a spike in the trade surplus that was largely driven by a 6.7% drop in imports (expected 3.5%). In all likelihood, expectations for more easing from the People's Bank of China fueled the advance.

In economic data:
China's trade surplus expanded to $54.47 billion from $45.41 billion (expected surplus of $43.15 billion) as imports fell 6.7% year-over-year (consensus 3.5%; prior 4.6%) while exports increased 4.7% (forecast 7.9%; last 11.6%)
Japan's Q3 GDP was revised down to -0.5% quarter-over-quarter from -0.4% (expected -0.1%) while the year-over-year reading was revised down to -1.9% from -1.6% (expected -0.5%). GDP Capital Expenditure fell 0.4% quarter-over-quarter (consensus 0.8%; last -0.2%) while GDP Price Index was reported at 2.0% (expected 2.1%; prior 2.1%). Separately, Economy Watchers Current Index fell to 41.5 from 44.0 (expected 45.9)

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Japan's Nikkei inched up 0.1% amid strength in industrial names. Ube Industries and Kawasaki Heavy Industries both up near 3.3%.
Hong Kong's Hang Seng added 0.2%, but ended near its low as consumer names weighed. Galaxy Entertainment, Sands China, and Belle International lost between 2.2% and 3.0%. Bank of China led, climbing 4.6%.
China's Shanghai Composite surged 2.8% to continue its breathless rally on hopes for more stimulus from the PBoC. China State Construction Engineering and China First Heavy Industries both surged the limit, 10.0%.
India's Sensex lost 1.2% after spending the session in a steady retreat with Infosys leading the index lower. The stock surrendered 4.8%. Coal India outperformed, climbing 2.3%.

Major European indices trade lower across the board with France's CAC (-0.9%) leading the region lower. Notably, European Central Bank member Ewald Nowotny said he observed a "massive weakening" in the Eurozone and there is a high possibility of a lower inflation rate in the first quarter.

Economic data was limited:
Eurozone Sentix Investor Confidence improved to -2.5 from -11.9 (expected -9.7)
Germany's Industrial Production inched up 0.2% month-over-month (expected 0.2%; last 1.1%)
Swiss CPI was unchanged month-over-month (expected -0.1%; last 0.0%) while Retail Sales increased 0.3% year-over-year (consensus 0.9%; prior 0.5%)

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Germany's DAX is lower by 0.6% with utilities on the defensive. E.On and RWE are lower by 1.4% and 1.8%, respectively. Commerzbank outperforms with an increase of 1.2%.
UK's FTSE has given up 0.9% amid weakness in miners and industrials. BHP Billiton, CRH, and Weir Group are down between 1.9% and 2.6%.
In France, the CAC trades down 0.9% with Cie de St-Gobain down 6.2% after the company's offer to acquire Sika was rejected. Bouygues and Renault outperform with gains close to 0.5% apiece.
Spain's IBEX is down 0.6%. Construction names Abengoa and Acciona hold respective losses of 2.1% and 1.2% while peers FCC and Sacyr outperform with gains of 2.5% and 0.5%, respectively.

8:26 am: [BRIEFING.COM] S&P futures vs fair value: -5.10. Nasdaq futures vs fair value: -12.80. U.S. equity futures remain near their lows with S&P 500 futures five points below fair value. If the current standing holds, the benchmark index will begin the week on a cautious note after registering seven consecutive weekly gains, totaling 10.0% since October 17.

Investors have not received much in terms of corporate news today and there is no economic data on today's calendar. Treasuries slumped overnight, but the 10-yr note has returned to unchanged after a steady climb off its low that was notched shortly after 4:00 ET. Currently, the benchmark yield sits just below 2.31%.

Also of note, the Dollar Index (89.39, +0.06) holds a slim gain of 0.1%.

7:59 am: [BRIEFING.COM] S&P futures vs fair value: -4.40. Nasdaq futures vs fair value: -11.80. U.S. equity futures trade modestly lower amid cautious action overseas. The S&P 500 futures hover four points below fair value following an overnight session that has featured some good, bad, and the ugly.

First, the good. Equity markets in Asia have started the week on an upbeat note. China's Shanghai Composite rallied 2.8% following a spike in the trade surplus ($54.47 billion from $45.41 billion) that was largely driven by a 6.7% drop in imports (expected 3.5%). In all likelihood, expectations for more easing from the People's Bank of China fueled the advance.

Then, the bad. Japan's Nikkei (+0.1%) inched higher despite a disappointing batch of data. The country was expected to revise its Q3 GDP to -0.1% quarter-over-quarter (-0.5% y/y) from -0.4% (-1.6% y/y), but instead the revision came in lower than expected at -0.5% quarter-over-quarter (-1.9% y/y). The bad data was good for the yen, which was bad for USD/JPY, which is currently lower by about 40 pips at 121.10.

And now, the ugly. The Bank of International Settlements sounded a warning over the weekend about the rising the dollar. The central banks' central bank said that due to a tremendous volume of off-shore dollar lending ($9 trillion), particularly in leveraged markets, continued strengthening of the greenback could send a severe credit shock through Asia. The BIS stressed that majority of these transactions are completely out of US legal purview due to the dollar's status as the reserve currency. With Chinese banks holding $1.1 trillion in these loans, the stress from a large swing can lead to ugly consequences. The dollar index has soared more than 12.0% since May and is up another 0.1% today.

Over in Europe, QE chatter has persisted, but that has not been able to prevent a broad decline with UK's FTSE (-0.8%) leading the weakness. European Central Bank member Ewald Nowotny said he observed a "massive weakening" in the Eurozone and there is a high possibility of a lower inflation rate in the first quarter. European debt has been in demand with Germany's 10-yr yield lower by five basis points at 0.69% and Spain's 10-yr yield down three basis points at 1.79%.

Treasuries are little changed with the 10-yr yield at 2.31%.

There is no economic data on today's calendar.

In U.S. corporate news of note:

Cubist Pharmaceuticals (CBST 101.10, +26.74): +36.2% after agreeing to be acquired by Merck (MRK 61.58, +0.09) for $102/share, representing a 35.0% premium to CBST's average stock price over the past five days.

Reviewing overnight developments:

Asian markets ended higher. Japan's Nikkei +0.1%, Hong Kong's Hang Seng +0.2%, and China's Shanghai Composite +2.8%
In economic data:
China's trade surplus expanded to $54.47 billion from $45.41 billion (expected surplus of $43.15 billion) as imports fell 6.7% year-over-year (consensus 3.5%; prior 4.6%) while exports increased 4.7% (forecast 7.9%; last 11.6%)
Japan's Q3 GDP was revised down to -0.5% quarter-over-quarter from -0.4% (expected -0.1%) while the year-over-year reading was revised down to -1.9% from -1.6% (expected -0.5%). GDP Capital Expenditure fell 0.4% quarter-over-quarter (consensus 0.8%; last -0.2%) while GDP Price Index was reported at 2.0% (expected 2.1%; prior 2.1%). Separately, Economy Watchers Current Index fell to 41.5 from 44.0 (expected 45.9)
In news:
China's decline in imports represented the first year-over-year drop in that category in three months

Major European indices trade lower across the board. Great Britain's FTSE -0.9%, France's CAC -0.8%, and Germany's DAX -0.6%. Elsewhere, Italy's MIB -0.8% and Spain's IBEX -0.7%
Economic data was limited:
Eurozone Sentix Investor Confidence improved to -2.5 from -11.9 (expected -9.7)
Germany's Industrial Production inched up 0.2% month-over-month (expected 0.2%; last 1.1%)
Swiss CPI was unchanged month-over-month (expected -0.1%; last 0.0%) while Retail Sales increased 0.3% year-over-year (consensus 0.9%; prior 0.5%)
Among news of note:
European Central Bank member Ewald Nowotny said he observed a "massive weakening" in the Eurozone and there is a high possibility of a lower inflation rate in the first quarter

6:45 am: [BRIEFING.COM] S&P futures vs fair value: -3.80. Nasdaq futures vs fair value: -11.00.

6:45 am: [BRIEFING.COM] Nikkei...17935.64...+15.20...+0.10%. Hang Seng...24047.67...+45.00...+0.20%.

6:45 am: [BRIEFING.COM] FTSE...6693.28...-49.60...-0.70%. DAX...10046.32...-40.80...-0.40%.

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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