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 @ $780.00 dollars or +7.80 points, Emini ES ($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 @ $780.00 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=1952


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

Stocks rise after hiring surge; Dow misses 18,000

NEW YORK (AP) — A strong jobs report boosted U.S. and European stocks Friday, and left the Dow Jones industrial average just short of the 18,000 mark.

The main focus in the markets was the monthly hiring numbers. The Labor Department said U.S. employers added 321,000 jobs last month, the biggest burst of hiring in nearly three years, while the unemployment rate remained steady at 5.8 percent.

Despite the good news, stock gains were restrained. Investors now expect that the robust jobs growth — and other signs the economy is accelerating — could lead the Federal Reserve to raise interest rates sooner than anticipated.

Banks, whose profit margins increase when interest rates rise, were among Friday's biggest gainers. Safety-focused utility stocks, which tend to perform poorly in an improving economy, were among the biggest decliners, along with energy companies, which were hurt once again by lower oil prices.

With Friday's modest increases, the Standard & Poor's 500 index closed out a seventh-straight week of gains. The stretch was its longest winning streak in a year and in stark contrast to the near-correction in the market only a month-and-a-half ago.

"We continue to see this steady drip into the equities markets, and I don't think it's going to stop any time soon," said David Kelly, chief global strategist for J.P. Morgan Funds.

The Dow Jones industrial average rose 58.69 points, or 0.3 percent, to 17,958.79. The S&P 500 index climbed 3.45 points, or 0.2 percent, to 2,075.37. The Nasdaq composite gained 11.32 points, or 0.2 percent, to 4,780.76.

November's jobs report, as well as other positive economic data, could raise expectations among investors that the Federal Reserve will soon start raising interest rates. Last month marks the 10th straight month of job gains above 200,000, and would put 2014 on track to be the best year for hiring since 1999.

The yield on the benchmark 10-year U.S. Treasury note climbed to 2.31 percent Friday from 2.24 percent the day before as investors sold bonds in anticipation of higher rates.

"The bottom line is this was yet another very solid employment report and another strong data point reaffirming the strength of U.S. growth versus a sluggish global (economy)," Rick Rieder, chief investment officer of fundamental fixed income at BlackRock, wrote in a note to reporters.

Investors like seeing a healthy U.S. economy, but are also aware that stock prices are higher partly because of ultra-low interest rates. If the Fed believes the U.S. economy is overheating, they could raise interest rates and it could cause stock prices to decline.

Not all stocks would be losers in a higher interest rate environment. Bank stocks rose Friday, with JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo up 1 percent to 2.5 percent. Higher interest rates would allow banks to charge more for loans and that would boost their profits.

Still, those gains weren't enough to push the Dow to another round-number landmark. Just five months after cresting the 17,000-point level for the first time, the Dow is on the verge of 18,000. The blue chips came within nine points of that figure Friday, before pulling back.

Still, the Dow's performance this year has trailed the other major indexes. The average is up 8.3 percent in 2014, while the S&P 500, which is tracked more by mutual funds and Wall Street, is up 12.3 percent. The Nasdaq is up the most, rising 14.5 percent.

The price of oil fell Friday to its lowest level since July of 2009 on continued expectations of high global supplies and Saudi Arabia's decision to cut its prices.

Benchmark U.S. crude fell 97 cents to close at $65.84 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell for the ninth time in the last 10 trading sessions, closing down 57 cents to $69.07 in London.

Energy stocks followed oil prices lower. Chevron fell $1.41, or 1.3 percent, to $110.87. Marathon Petroleum lost $4.52, or 4.7 percent, to $92.15 and Phillips 66 fell $1.95, or 2.6 percent, to $73.02.

Along with the improving economy, the drop in oil prices has been encouraging to investors. Lower oil prices and, in turn, falling gas prices, are effectively a tax cut for the average person, and it could translate into higher spending down the road.

The dollar rose against other currencies as traders anticipated more robust growth in the U.S. and higher interest rates.

The price of gold fell $17.30, or 1.4 percent, to $1,190.40 an ounce. Silver fell 32 cents, or 1.9 percent, to $16.26 an ounce. Copper slipped a penny to $2.90 a pound.

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4:10 pm: [BRIEFING.COM] The Dow (+0.3%), Nasdaq (+0.2%), and S&P 500 (+0.2%) ended the Friday session near their flat lines, allowing the benchmark index to register its seventh consecutive weekly advance. The S&P 500 added 0.4% for the week, while the Russell 2000 (+0.8%) outperformed to extend its weekly gain to 0.7%. Also of note, the tech-heavy Nasdaq outperformed slightly today, but still ended the week in the red (-0.2%).

Prior to the open, the Nonfarm Payrolls report revealed the addition of 321,000 jobs in November while the Briefing.com consensus expected a reading of 230,000. Although the data point came in well ahead of estimates, the stock market struggled for direction before following the financial sector (+1.0%) higher. Outside of financials, only the health care sector (+0.8%) was able to add more than 0.3%. As for the broader market, the S&P 500 notched its high just ahead of noon ET and slipped from that level into the close.

The lack of broad strength following a solid jobs report was a reflection of concerns that the Fed may be inclined to hike the fed funds rate sooner than the market expected. These concerns showed up in the Dollar Index (89.34, +0.64) and the Treasury market with the 10-yr note diving to send the benchmark yield higher by seven basis points to 2.31%. At the front of the curve, the 2-yr yield climbed nine basis points to 0.64%.

Conversely, higher Treasury yields contributed to the strength in the financial sector, which is poised to benefit from improved net interest margins of banks. If rates rise at the short end of the Treasury yield curve that would allow banks to charge higher interest on loans while deposit rates would likely remain close to where they are now. Top-weighted sector members rallied across the board with Dow components JPMorgan Chase (JPM 62.70, +1.32) and Goldman Sachs (GS 195.45, +3.50) spiking 2.2% and 1.8%, respectively, while the sector ended the week ahead of the remaining nine groups (+1.8%).

Meanwhile, the remaining cyclical sectors settled closer to their flat lines. Consumer discretionary (+0.3%) and industrials (+0.2%) registered modest gains while energy (-1.2%), materials (-0.1%), and technology (-0.2%) ended in the red.

The industrial sector was underpinned by defense and transport stocks. The PHLX Defense Index rose 0.6% while the Dow Jones Transportation Average gained 0.4%.

Elsewhere, the discretionary sector received support from restaurants, homebuilders, and media names while retailers underperformed after American Eagle Outfitters (AEO 11.91, -1.90), Big Lots (BIG 40.00, -7.95), and Five Below (FIVE 37.61, -5.24) disappointed with their results or guidance. Gap (GPS 40.74, +0.18) bucked the trend, climbing 0.4%, after reporting better than expected same store sales for November, but the SPDR S&P Retail ETF (XRT 92.43, -0.30) shed 0.3%.

Also of note, the top-weighted technology sector spun its wheels throughout the day as large cap components weighed while chipmakers rallied after Freescale Semiconductor (FSL 24.79, +1.36) was upgraded to 'Buy' from 'Hold' at Evercore ISI. Shares of FSL jumped 5.8% while the PHLX Semiconductor Index settled higher by 1.0%.

Chipmakers helped the Nasdaq Composite finish a little ahead of the broader market while biotechnology also chipped in with the iShares Nasdaq Biotechnology ETF (IBB 308.81, +2.61) climbing 0.9%. In turn, the strength helped the health care sector (+0.8%) register a solid gain.

On the downside, the energy sector (-1.2%) was pressured by a 1.8% decline in crude oil ($66.75/bbl) while the rate-sensitive utilities sector (-0.8%) lagged as Treasury yields climbed.

Today's participation was a bit below average with 738 million shares changing hands at the NYSE floor.

Economic data included nonfarm payrolls, trade balance, factory orders, and consumer credit:

Nonfarm payrolls increased by 321,000 in November, up from an upwardly revised 243,000 (from 214,000), while the Briefing.com consensus expected nonfarm payrolls to add 230,000 new jobs
That was the biggest increase in payrolls since 360,000 jobs were added in January 2012
Private payrolls increased by 314,000 in November after adding an upwardly revised 236,000 (from 209,000) in October. The consensus expected 228,000 new private jobs
Obviously, a three-handle jobs gain is impressive, which tells us that there was still a considerable amount of people unemployed who were looking for jobs
However, those who already had jobs were able to demand a 0.4% increase in average hourly earnings, which suggests that the number of available qualified workers is diminishing, thus forcing employers to pay their workers more money to keep them at their current job
Gains in hourly earnings and the average workweek led to a 0.9% increase in aggregate wages, which was the largest increase since 2006
The unemployment rate held at 5.8%, as expected
The U.S. trade deficit narrowed slightly in October, falling from an upwardly revised $43.60 billion (from $43.00 billion) in September to $43.40 billion while the Briefing.com consensus expected a decline to $42.00 billion
The goods deficit was virtually unchanged at $62.70 billion while the services surplus increased to $19.20 billion from $19.10 billion
Factory orders declined 0.7% in October after declining an upwardly revised 0.5% (from -0.6%) while the Briefing.com consensus expected an increase of 0.3%
The large downside surprise resulted from weaker oil prices, which caused a 6.5% decline in petroleum refinery orders. This led to a 1.5% decline in nondurable goods orders after those orders declined only 0.2% in September
The Consumer Credit report for October showed an increase of $13.20 billion, which was lower than the Briefing.com consensus estimate of $16.50 billion

Monday's session will be free of economic data.

Nasdaq Composite +14.5% YTD
S&P 500 +12.3% YTD
Dow Jones Industrial Average +8.3% YTD
Russell 2000 +1.5% YTD

Week in Review: S&P 500 Posts Seventh Weekly Gain

The major averages began December on a lower note with relative weakness among cyclical sectors keeping the market under pressure throughout the Monday session. The Nasdaq Composite (-1.3%) and Russell 2000 (-1.6%) paced the slide while the S&P 500 settled lower by 0.7% with eight sectors ending in the red. Equities faced selling pressure from the opening bell after the overnight session reminded investors about persistent growth concerns around the globe. In Asia, China's HSBC Manufacturing PMI fell to an eight-month low (50.3; expected 50.5) while Japan's debt rating was lowered to A1 from Aa3 at Moody's. Making matters worse, Germany's Manufacturing PMI slid into contraction (49.5; expected 50.0) while the eurozone Manufacturing PMI narrowly avoided the same fate (50.1; expected 50.4). Accordingly, the concerns about major economies kept cyclical sectors under pressure with five of six growth-sensitive groups ending behind the broader market.

Equities enjoyed a broad rebound on Tuesday after Monday's retreat. The S&P 500 settled higher by 0.6% while the Russell 2000 (+1.2%) displayed relative strength. The benchmark index spent the day in a steady advance with M&A news acting as a supportive factor. In the technology sector (+0.3%), Cypress Semiconductor (CY) agreed to a $4 billion merger of equals with Spansion (CODE) while health care component (+1.1%) Avanir Pharmaceuticals (AVNR) agreed to be acquired by Otsuka Pharmaceuticals for $3.5 billion in cash. Also of note, insurer Aviva (AV) announced its acquisition of Friends Life Group.

The market ended the midweek session on an upbeat note with the Russell 2000 (+1.0%) pacing the advance for the second day in a row. Meanwhile, the S&P 500 posted a more modest gain of 0.4% with seven sectors ending in the green. Cyclical sectors were responsible for the bulk of the advance as all six growth-sensitive groups ended in the green while health care (+0.2%) was the lone gainer on the countercyclical side.

The stock market ended the Thursday session on a modestly lower note ahead of Friday's Nonfarm Payrolls report for November. The S&P 500 shed 0.1% while the Russell 2000 (-0.5%) underperformed. Thursday served as a perfect reminder for how dependent global equity markets have become on central bank stimulus. The first reminder occurred during the Asian session with China's Shanghai Composite soaring 4.3% amid expectations the People's Bank of China will introduce additional stimulus measures. While the advance was impressive, it pales in comparison with an 18.3% surge in the index since November 20. Meanwhile, the second reminder manifested itself through volatility in European and U.S. markets in reaction to the European Central Bank's latest policy statement and subsequent press reports. ECB President Mario Draghi did not call for the start of a sovereign QE program, which had been expected by some. However, a Bloomberg report indicating the ECB will prepare a broad-based QE package for the January meeting helped fuel a rebound.

3:35 pm: [BRIEFING.COM]

Oil prices extended losses today following news that Saudi Arabia cut selling prices to Asian and U.S. buyers
Jan crude oil settled $0.87 lower at $66.75/barrel
Natural gas rallied today after declining 19% since Nov 20, almost putting the commodity in an official bear market
Jan nat gas ended today's session 4.1% higher at $3.80/MMBtu
Feb gold fell $17.20 to $1190.20/oz, while Mar silver fell $0.29 to $16.26/oz

3:00 pm: [BRIEFING.COM] The S&P 500 has narrowed its gain to 0.1% as most sectors inched away from their recent levels.

The Consumer Credit report for October was just released by the Federal Reserve and it showed an increase of $13.20 billion. That was lower than the Briefing.com consensus estimate of $16.50 billion. The prior month's credit growth was revised to $15.40 billion from $15.90 billion.

2:30 pm: [BRIEFING.COM] Afternoon action continues with the S&P 500 (+0.2%) trading about three points below its best level of the session. Barring a late-afternoon slide, the benchmark index will post its seventh consecutive weekly advance (+0.4%) and finish at a new record high.

Similarly, the Dow (+0.4%) is also on track for its seventh weekly advance in a row (+0.8%), while the Nasdaq (+0.3%) has not been able to keep up. The index is lower by 0.2% for the week as it continues working its way back from a 1.3% dive on Monday.

Treasuries remain close to their lows with the 10-yr yield up seven basis points at 2.31%.

The Consumer Credit report for October (consensus $16.50 billion) will be released at 15:00 ET.

1:55 pm: [BRIEFING.COM] Equity indices remain near their recent levels with the Russell 2000 (+0.7%) maintaining the lead.

November realized the largest increase in payrolls since January 2012.

More importantly, gains in hourly earnings and the average workweek led to a 0.9% increase in aggregate wages. That was the largest increase since 2006.

Large income gains are necessary for consumption growth, and the November surge will likely cause an acceleration in retail sales growth.

1:30 pm: [BRIEFING.COM] The markets have dropped slightly under their highs of the day with the Dow Jones Industrial Average now 30 points under the psychologically important 18k level. If equities are able to hold their gains, both the Dow Jones Industrial Average and S&P 500 will close in record high territory as the US indices close out another week of strong gains.

Utilities continue to be the weakest sector on the day (-1.1%) as investors grapple with the possibility that the strong jobs report this morning may encourage the Fed to raise the fed funds raise earlier than expected in 2015. Financials remain the largest outperformer on the day (+1.2%). In recent trade, energy (-0.2%) has rebounded from its deep losses earlier as commodities rally off their lows of the day with Brent Crude now positive on the day.

At 14:45 ET Federal Reserve Vice Chair Fischer is expected to speak at the IMF's Fiscal Affairs Department 50th Anniversary Conference.


12:55 pm: [BRIEFING.COM] The major averages trade near their highs at midday with the Russell 2000 (+0.9%) in the lead. Meanwhile, the Dow (+0.5%), Nasdaq (+0.4%), and S&P 500 (+0.3%) hold slimmer gains.

Equity indices have spent the first half of the session in a slow, but steady ascent after the November jobs report came in well ahead of estimates (321,000; Briefing.com consensus 230,000). The strong data point has weighed on Treasuries, suggesting market participants believe the report could cause the Fed to hike the fed funds rate sooner than expected. The 10-yr yield has spiked eight basis points to 2.32% while the 2-yr yield is higher by 10 basis points at 0.65%.

Fittingly, the increase in expectations for a swifter rate hike has underpinned the financial sector (+1.2%) which trades well ahead of the remaining nine groups. The sector is poised to benefit from higher rates as they would improve net interest margins of banks. If rates rise at the short end of the Treasury yield curve that would allow banks to charge higher interest on loans while deposit rates would likely remain close to where they are now. Dow components JPMorgan Chase (JPM 62.78, +1.40) and Goldman Sachs (GS 196.64, +4.69) have jumped 2.3% and 2.4%, respectively.

Outside of financials, the health care sector (+0.8%) is the only group sporting an increase larger than 0.4%. Biotechnology has underpinned the group with the iShares Nasdaq Biotechnology ETF (IBB 308.20, +2.00) trading higher by 0.7%.

The outperformance of biotechnology has boosted the Nasdaq, which has also received another measure of support from chipmakers. The PHLX Semiconductor Index is higher by 0.6% with Freescale Semiconductor (FSL 24.60, +1.17) up 5.0% after the stock was upgraded to 'Buy' from 'Hold' at Evercore ISI.

However, top-weighted components of the technology sector (+0.1%) have not been able to keep pace with the broader market. IBM (IBM 163.56, -0.49), Microsoft (MSFT 48.64, -0.20), and Google (GOOGL 532.15, -10.43) are down between 0.3% and 1.9% with Google pressured after Bank of America/Merrill Lynch downgraded the stock to 'Neutral' from 'Buy.'

On the downside, the energy sector (-0.4%) lags amid another decline in crude oil, which is lower by 1.2% at $66.04/bbl.

Economic data included nonfarm payrolls, trade balance, and factory orders:

Nonfarm payrolls increased by 321,000 in November, up from an upwardly revised 243,000 (from 214,000), while the Briefing.com consensus expected nonfarm payrolls to add 230,000 new jobs
That was the biggest increase in payrolls since 360,000 jobs were added in January 2012
Private payrolls increased by 314,000 in November after adding an upwardly revised 236,000 (from 209,000) in October. The consensus expected 228,000 new private jobs
Obviously, a three-handle jobs gain is impressive, which tells us that there was still a considerable amount of people unemployed who were looking for jobs
However, those who already had jobs were able to demand a 0.4% increase in average hourly earnings, which suggests that the number of available qualified workers is diminishing, thus forcing employers to pay their workers more money to keep them at their current job
The unemployment rate held at 5.8%, as expected
The U.S. trade deficit narrowed slightly in October, falling from an upwardly revised $43.60 billion (from $43.00 billion) in September to $43.40 billion while the Briefing.com consensus expected a decline to $42.00 billion
The goods deficit was virtually unchanged at $62.70 billion while the services surplus increased to $19.20 billion from $19.10 billion
Factory orders declined 0.7% in October after declining an upwardly revised 0.5% (from -0.6%) while the Briefing.com consensus expected an increase of 0.3%
The large downside surprise resulted from weaker oil prices, which caused a 6.5% decline in petroleum refinery orders. This led to a 1.5% decline in nondurable goods orders after those orders declined only 0.2% in September

The Consumer Credit report for October (consensus $16.50 billion) will be released at 15:00 ET.

12:25 pm: [BRIEFING.COM] Not much change in the major averages with the Dow (+0.4%) trading a bit ahead of the S&P 500 (+0.3%).

The price-weighted Dow has been supported by some of its largest components with their strength overshadowing losses among 13 index members. On the upside, Visa (V 263.11, +1.97), Goldman Sachs (GS 196.58, +4.62), and 3M (MMM 162.44, +0.18) hold respective gains of 0.8%, 2.4%, and 0.1%. The trio represents three of the four top-weighted index components.

Elsewhere, Treasuries have returned into the neighborhood of their morning lows. The 10-yr yield is higher by eight basis points at 2.32%.

11:55 am: [BRIEFING.COM] The major averages remain at their best levels of the session with the Dow (+0.5%) and Nasdaq (+0.4%) trading ahead of the S&P 500 (+0.3%).

The tech-heavy Nasdaq has enjoyed significant support from chipmakers (PHLX Semiconductor Index +0.6%) and biotech stocks (IBB +0.8%) while many heavily-weighted sector components have been unable to take part in the advance. Apple (AAPL 115.53, +0.04) trades flat while Cisco Systems (CSCO 27.63, -0.14), Google (GOOGL 534.96, -7.62), and Microsoft (MSFT 48.60, -0.24) are down between 0.5% and 1.5%.

As for the technology sector, the top-weighted group trades flat.

11:30 am: [BRIEFING.COM] Equity indices have returned to their highs with the S&P 500 up 0.2%.

Five of six cyclical sectors sit in the green, but only financials (+1.1%) sport an increase larger than 0.3%. The growth-sensitive sector is poised to benefit from a swifter fed funds rate hike, which would improve net interest margins of banks. If rates rise at the short end of the Treasury yield curve that would allow banks to charge higher interest on loans while deposit rates would likely remain close to where they are now.

However, a flattening yield curve could become a concern for Treasury portfolios of large banks. The Treasury yield curve has flattened following today's jobs report with the 2y-10y spread narrowing to 168 basis points from 173 basis points yesterday. Furthermore, the 2y-30y spread is now at 235 basis points, down from 243 basis points yesterday.

10:55 am: [BRIEFING.COM] The Dow (+0.3%), Nasdaq (+0.2%), and S&P 500 (+0.1%) continue holding modest gains while the Russell 2000 (+0.7%) remains in the lead.

The outperformance of the small-cap Russell 2000 has been a supportive factor for other high-beta areas like biotechnology, transport stocks, and chipmakers.

The iShares Nasdaq Biotechnology ETF (IBB 308.15, +1.95) trades higher by 0.6% while the broader health care sector (+0.5%) is the top performer at this juncture. Furthermore, the sector represents this quarter's top performer with a 10.2% spike.

Elsewhere, the Dow Jones Transportation Average (+0.8%) has returned to unchanged for the week after displaying relative weakness on Monday. The bellwether complex has enjoyed broad support as 19 of its 20 components sport gains.

Also of note, chipmakers have rallied behind Freescale Semiconductor (FSL 24.12, +0.69) after the stock was upgraded to 'Buy' from 'Hold' at Evercore ISI. The stock has spiked 2.9% while the PHLX Semiconductor Index has added 0.4%. Strikingly, the strength has been unable to lift the technology sector (-0.1%), which is enduring pressure from some of its top-weighted components. Google (GOOGL 532.60, -9.98) has surrendered 1.9% after Bank of America/Merrill Lynch downgraded the stock to 'Neutral' from 'Buy.'

10:35 am: [BRIEFING.COM]

Following the jobs numbers this morning, precious metals dropped to new lows on the day, while the dollar index spike to a new high for today.
In current action, the dollar index remains near today's high, which continues to weigh on commodities, and is currently +0.7% at 89.29.
Oil prices are taking a hit this morning after Saudi Arabia cut prices on oil to Asian and U.S. buyers.
Prices were cut again because the Saudis are continuing to fight for market share.
Natural gas reversed today after a recent sell-off, which has been seen since November 20 when prices were closer to $4.50/MMBtu
In current price action:
Jan crude oil is -2.4% at $65.25/barrel
Jan natural gas +1.8% at $3.72/MMBtu
Feb gold -1.1% at $1193.20/oz
Mar silver -1.9% at $16.27/oz
Mar copper -0.4% at $2.90/lb

10:00 am: [BRIEFING.COM] The S&P 500 trades higher by 0.2%.

The just-released factory orders report for October indicated orders decreased 0.7%, which was worse than the Briefing.com consensus estimate that called for an increase of 0.2%. The September reading was revised up to -0.5% from -0.6%.

9:40 am: [BRIEFING.COM] The major averages have climbed out of the gate with the Russell 2000 (+0.6%) setting the early pace. Meanwhile, the S&P 500 (+0.2%) hovers just above its flat line with five of six cyclical sectors holding gains.

The financial sector (+0.9%) is an early leader, which could be related to expectations of a swifter rate hike from the Federal Reserve. To that point, the 10-yr yield is higher by five basis points at 2.29%.

Outside of financials, the remaining advancers sport gains of no more than 0.3% apiece. The materials sector is the second-best performer while consumer discretionary (+0.3%), and technology (+0.3%) also trade ahead of the broader market.

On the flip side, the energy sector is lower by 0.2% while crude oil trades down 1.1% at $66.12/bbl. Elsewhere, consumer staples (-0.3%), telecom services (-0.3%), and utilities (-0.8%) also hover in the red.

The October Factory Orders report will be released at 10:00 ET (Briefing.com consensus 0.2%).

9:15 am: [BRIEFING.COM] S&P futures vs fair value: +0.90. Nasdaq futures vs fair value: +3.50. The stock market is on track for a slightly higher open with futures on the S&P 500 trading a point above fair value. Index futures held modest gains through the night, but retreated following the November jobs report, which was a lot stronger than expected with the addition of 321,000 jobs while the Briefing.com consensus expected a reading of 230,000. The unemployment rate held at 5.8% while hourly earnings increased 0.4% (consensus 0.2%).

Interestingly, index futures dipped in initial reaction and are currently just above their pre-market lows. In all likelihood, the report will lead to speculation that the Fed may be inclined to raise rates sooner than the market expected. That appears to be the concern in the bond market with Treasuries on their lows with the 10-yr yield up seven basis points at 2.30%.

In addition to the jobs report, investors received the October trade data, which showed the trade deficit narrow to $43.40 billion from $43.60 billion while the Briefing.com consensus expected a reading of $42.00 billion.

More data remains on the schedule with October Factory Orders (Briefing.com consensus 0.2%) set to be released at 10:00 ET and the Consumer Credit report for October (consensus $16.50 billion) scheduled for a 15:00 ET release.

On the corporate front, investors received another batch of retail earnings with American Eagle Outfitters (AEO 12.50, -1.31), Big Lots (BIG 44.71, -3.24), and Five Below (FIVE 37.73, -5.12) disappointing with their results or guidance. On the upside, Gap (GPS 41.95, +1.39) is on track for a higher open after reporting better than expected same store sales for November.

8:56 am: [BRIEFING.COM] S&P futures vs fair value: +3.10. Nasdaq futures vs fair value: +8.50. The S&P 500 futures trade three points above fair value.

Markets gained across much of Asia. Rumblings of further rate cuts from the People's Bank of China provided support. Elsewhere, more polls suggested Japan Prime Minister Shinzo Abe's LDP will win a super majority in the upcoming election.

In economic data:
Japan's Leading Index fell to 104.0 from 105.6 (expected 104.2)
Australia's AIG Construction Index dropped to 45.4 from 53.0

------

Japan's Nikkei edged up 0.2% to its best levels since July 2007 as the yen slid below 120.00. Exporters continued to reap the benefits of the weak yen as Komatsu jumped 3.0% and Sony tacked on 1.3%.
Hong Kong's Hang Seng rose 0.7%, testing its best levels since mid-September, but was unable to break out. Financials led the way amid continued speculation of a PBOC rate cut. China Construction Bank and Industrial & Commercial Bank of China rallied 3.0% and 2.6%, respectively.
China's Shanghai Composite rose 1.3%, gaining for the 11th time in 12 sessions. The index has spiked 20% over that stretch. Financials saw robust gains with Agricultural Bank of China surging 8.9%.
India's Sensex shed 0.4% to post its first losing week in seven. The Index was dragged down by profit-taking in IT names as Wipro fell 2.3% and Infosys lost 1.5%.

Major European indices trade higher across the board with Italy's MIB (+2.8%) in the lead. Elsewhere, Germany's Bundesbank cut its 2014 GDP forecast for the country to 1.4% from 1.9% and lowered its 2015 outlook to 0.8% from 1.8%. Harmonized inflation for 2014 is expected to come in at 0.9%, down from 1.1%, while the 2015 forecast was lowered to 1.1% from 1.5%

Economic data was limited:
Eurozone Q3 GDP was left unrevised at 0.2% quarter-over-quarter, as expected
Germany's Factory Orders rose 2.5% month-over-month (expected 0.6%; last 1.1%)
Spain's Industrial Production increased 1.2% year-over-year (consensus 1.4%; last 1.0%)

------

UK's FTSE is higher by 0.8% with consumer names in the lead. Carnival, Intertek Group, and International Consolidated Airlines hold gains between 2.3% and 3.3%. Miners lag with Anglo American, BHP Billiton, Fresnillo, and Rio Tinto down between 0.6% and 1.9%.
In France, the CAC trades up 1.7% with all but two components in the green. Financials Credit Agricole, BNP Paribas, and Societe Generale are among the leaders with gains between 1.9% and 2.8%. On the downside, Gemalto is the weakest performer, down 1.3%.
Germany's DAX has added 1.7% with help from bank shares. Deutsche Bank and Commerzbank are higher by 2.6% and 1.6%, respectively.
Italy's MIB has spiked 2.8% amid strength in financials. Banco Popolare, Intesa Sanpaolo, UBI Banca, and Unicredit have jumped between 3.8% and 5.0%.

8:33 am: [BRIEFING.COM] S&P futures vs fair value: -1.10. Nasdaq futures vs fair value: +1.50. The S&P 500 futures trade one point below fair value.

November nonfarm payrolls came in at 321,000, while the Briefing.com consensus expected a reading of 230,000. Nonfarm private payrolls added 314,000 against the 228,000 expected by the consensus. The unemployment rate held at 5.8%, as expected by the Briefing.com consensus.

Hourly earnings rose 0.4% while the consensus expected growth of 0.2%. The average workweek was reported at 34.6, which is what the consensus expected.

Separately, the October trade deficit narrowed to $43.40 billion from $43.60 billion, while the Briefing.com consensus expected the deficit to come in at $42.00 billion.

7:56 am: [BRIEFING.COM] S&P futures vs fair value: +2.40. Nasdaq futures vs fair value: +6.20. U.S. equity futures trade modestly higher amid upbeat action overseas. The S&P 500 futures hover two points above fair value after spending the bulk of the night in positive territory.

Although markets in Europe and U.S. were shaken yesterday, they did not stay down for long and have recovered the bulk of Thursday's losses. However, some volatility is expected to surround the 8:30 ET release of the Nonfarm Payrolls report for November (Briefing.com consensus 230K).

In addition to jobs data, investors will receive the October Trade Balance (consensus -$42.00 billion) at 8:30 ET. The Factory Orders report for October (consensus 0.2%) will cross at 10:00 ET and the day's data will be topped off with the 15:00 ET release of the Consumer Credit report for October (consensus $16.50 billion).

Treasuries hold losses with the 10-yr yield up almost three basis points at 2.26%.

In U.S. corporate news of note:

Ambarella (AMBA 56.50, +0.87): +1.6% after beating earnings and revenue estimates
American Eagle Outfitters (AEO 12.95, -0.86): -6.2% after reporting in-line results and guiding Q4 earnings below consensus estimates
Big Lots (BIG 47.50, -0.45): -0.9% following its one-cent miss on light revenue
Five Below (FIVE 38.00, -4.85): -11.3% in reaction to in-line results and disappointing guidance
Ulta Salon (ULTA 133.00, +7.26): +5.8% after its better than expected earnings overshadowed below-consensus guidance

Reviewing overnight developments:

Asian markets ended mixed, but Japan's Nikkei (+0.2%), Hong Kong's Hang Seng (+0.7%), and China's Shanghai Composite (+1.3%) posted gains.
In economic data:
Japan's Leading Index fell to 104.0 from 105.6 (expected 104.2)
Australia's AIG Construction Index dropped to 45.4 from 53.0
In news:
China's Shanghai Composite endured a volatile session, but was able to continue its recent hot streak. The index has added 20.0% in 12 sessions.

Major European indices trade higher across the board. United Kingdom's FTSE +0.8%, Germany's DAX +1.3%, and France's CAC +1.3%. Elsewhere, Spain's IBEX +1.8% and Italy's MIB +2.3%.
Economic data was limited:
Eurozone Q3 GDP was left unrevised at 0.2% quarter-over-quarter, as expected
Germany's Factory Orders rose 2.5% month-over-month (expected 0.6%; last 1.1%)
Spain's Industrial Production increased 1.2% year-over-year (consensus 1.4%; last 1.0%)
Among news of note:
Germany's Bundesbank cut its 2014 GDP forecast for the country to 1.4% from 1.9% and lowered its 2015 outlook to 0.8% from 1.8%. Harmonized inflation for 2014 is expected to come in at 0.9%, down from 1.1%, while the 2015 forecast was lowered to 1.1% from 1.5%

6:58 am: [BRIEFING.COM] S&P futures vs fair value: +3.00. Nasdaq futures vs fair value: +9.00.

6:58 am: [BRIEFING.COM] Nikkei...17,920.45...+33.20...+0.20%. Hang Seng...24,002.64...+170.10...+0.70%.

6:58 am: [BRIEFING.COM] FTSE...6,712.75...+33.20...+0.50%. DAX...9,976.79...+125.40...+1.30%.

U.S. Stocks Rise to Record; Dollar Gains, Bonds Fall

By Stephen Kirkland and Jeremy Herron Dec 5, 2014 4:07 PM ET

The dollar climbed to a five-year high, U.S. stocks rose to records and Treasuries fell as signs of a strengthening economy bolstered the case for higher interest rates. Crude dropped to the lowest since 2009.

The Standard & Poor’s 500 Index (SPX) rose 0.2 percent at 4 p.m. in New York, erasing a brief loss in the final 10 minutes of trading to close at an all-time high. The Dow Jones Industrial Average (INDU) ended at a record after rising to within 10 points of 18,000. JPMorgan Chase & Co. rallied 2.2 percent to lead financial shares higher. The Bloomberg Dollar Spot Index jumped 0.9 percent. The 10-year Treasury yield increased 7 basis points to 2.30 percent. West Texas Intermediate crude lost 1.5 percent. The Stoxx Europe 600 Index surged 1.8 percent amid speculation for more stimulus. Gold sank 1.4 percent.

Employers in the U.S. added 321,000 jobs in November, driving wage gains and highlighting increased corporate confidence the economy will endure a global slowdown. The Federal Reserve is weighing jobs growth as it decides when the economy is strong enough to withstand higher rates. European equities rebounded from the biggest drop in seven weeks after two officials familiar with deliberations said the central bank will consider a proposal for broad-based asset purchases at the next monetary-policy meeting on Jan. 22.

“It was an amazing jobs report, with gains across every sector,” Joe “JJ” Kinahan, chief strategist at TD Ameritrade Holding Corp., said in a phone interview. The firm manages about $653 billion in client assets. “It really was a number that Wall Street wasn’t prepared for. The market doesn’t like surprises so there was selling pressure but the number is too good to sell on based off of that.”

Exceeding Estimates

The advance in payrolls exceeded the most optimistic projection in a Bloomberg survey of economists. The jobless rate held at a six-year low of 5.8 percent. Average hourly earnings rose 0.4 percent, the biggest gain since June of last year.

Fed policy makers said they plan to raise interest rates in 2015, even as the outlook for global inflation remains low with the price of crude oil down more than 35 percent this year. They meet Dec. 16-17.

Among stocks moving today, financial shares in the S&P 500 rallied 1 percent for the biggest advance among 10 main groups. JPMorgan Chase and Goldman Sachs Group Inc. paced gains in the Dow average.

Bank Rally

“Financials are a proxy for the overall economy, and the possibility of a normal interest rate environment is constructive to banks,” Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank, said in a phone interview. “Financials in general make money on the spread, borrowing money and lending it out at higher rates.”

Energy shares continued a selloff, with producers in the S&P 500 falling 1.2 percent as the price of oil retreated. Chevron Corp. sank 1.3 percent.

West Texas Intermediate for January delivery dropped 1.5 percent to $65.84 a barrel in New York. Brent in London lost 0.8 percent. Both settlements were the lowest since 2009.

Saudi Arabia offered customers in Asia the lowest discounts in at least 14 years on its crude, bolstering speculation that the OPEC member is defending market share. Crude slumped 18 percent last month as the Organization of Petroleum Exporting Countries kept its output quota, letting prices fall to a level that may slow U.S. production.

Treasury Yields

Benchmark Treasury 10-year note yields rose to the highest level since Nov. 25, while two-year note yields added 10 basis points to 0.64 percent, reaching the highest since April 2011.

“Today’s number brings expectations of an interest rate increase in a little bit,” Chris Gaffney, senior market strategist at EverBank Wealth Management in St. Louis, said via phone. “Two months ago numbers like these may have been bad for stocks but maybe we’re at the point where the market thinks the economy can grow without the Fed pumping money into it.”

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 trading partners, headed for its highest close since March 2009. It rose 1.4 percent this week for a seventh straight weekly advance.

Dollar Gains

The greenback rose 0.7 percent to $1.22911 per euro and reached $1.2279, the strongest level since August 2012. The U.S. currency climbed 1.4 percent to 121.41 yen, the highest since July 2007.

“This is likely to not only keep the Fed on track to raise rates around the middle of next year, but could begin to spark talk of a potentially earlier interest-rate hike by the Fed,” Omer Esiner, chief market analyst at the currency brokerage Commonwealth Foreign Exchange Inc. in Washington, said by phone. “And, of course, all of this is very positive for the dollar.”

Gold futures for February delivery dropped 1.4 percent to settle at $1,190.40 an ounce. Prices touched $1,130.40 on Nov. 7, the lowest since 2010.

The outlook for higher interest rates erodes the allure of the metal, which generally offers investors returns through increasing prices. Holdings in global exchange-traded funds backed by bullion are at the lowest since 2009, heading for a seventh straight week of declines.

Draghi, Germany

In Europe, stocks capped a fourth weekly advance, rebounding from a drop yesterday after European Central Bank President Mario Draghi refrained from pledging QE for the euro area at the Governing Council meeting.

The ECB’s council expects to consider a proposal that includes sovereign-debt purchases at the next policy meeting on Jan. 22, the two officials said. The comments came after markets closed yesterday.

German factory orders climbed 2.5 percent in October, more than the 0.5 percent predicted by analysts, Economy Ministry data showed.

After the close of trading, S&P cut its rating on the sovereign debt of Italy to BBB- from BBB, saying the country’s weak economic prospects undermine its debt dynamics. Italy’s 10-year bond rate fell six basis points to 1.98 before the downgrade.

Spain’s 10-year yield fell six basis points to 1.83 percent, approaching the record-low 1.804 percent set on Dec. 3. Germany’s 10-year yield rose one basis point to 0.78 percent.

Gauges of automakers, banks and telecommunications companies were among the biggest advancers of the 19 industry groups in the Stoxx 600. Daimler AG rose 3.6 percent, Volkswagen AG increased 3 percent, and Peugeot SA added 3.2 percent.

Vodafone Group Plc. (VOD) climbed 3.1 percent after Goldman Sachs upgraded the shares to buy from neutral, saying Europe’s largest mobile operator will benefit from deal activity in the sector. The company is considering a combination with Liberty Global Plc, people familiar with the matter said Dec. 1.

China, Russia

The Shanghai Composite Index (SHCOMP) rose 1.3 percent, after gaining as much as 2.7 percent and falling 3 percent, with trading volumes 114 percent above the 30-day average, according to data compiled by Bloomberg.

The gauge advanced 9.5 percent in five days, the most for the period since February 2009, amid speculation the People’s Bank of China will cut reserve-requirement ratios after reducing interest rates for the first time in two years last month to support economic growth.

China’s share market “is becoming very speculative,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment, which oversees about $120 million. “The market will be in for a very wild up-and-down next week.”

Russia’s policy makers may be preparing to raise interest rates by more than 400 basis points in the next three months, according to forward-rate agreements tracked by Bloomberg. The ruble climbed 3 percent to 52.89 per dollar, paring its weekly decline to 4 percent following a 10 percent drop the previous week.

Russia Currency

Russia’s central bank, which next meets on rates Dec. 11, sold $1.9 billion of foreign currency on Dec. 3 when the ruble ended its worst six-day drop since 1998. The Bank of Russia intervened in the currency market for the second time since moving to a free float last month, according to a statement on its website today. Policy makers sold $700 million on Dec. 1, the data show.

President Vladimir Putin pledged to punish speculators attacking the ruble with “harsh” measures in his annual address to parliament yesterday and also asked the government and central bank to work together to defend the currency.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jeremy Herron in New York at jherron8@bloomberg.net

To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net Jeremy Herron, Stephen Kirkland

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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