CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
Stock futures are slightly higher as I write this. Traders have shown indecision in the last week and will continue to do so until prices break out of the current range in either direction.
The Bullish Percent Index in the gold mining shares continues to drop with each successive drop in the price of gold. As you can see, the miners are in “hatred” mode.
There sure are a lot of negative articles on gold and gold mining shares right now. We will find out if they are right soon enough, but rarely is the herd profitable.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^ATX | ATX | 2,458.23 |  23.89 (0.98%) | Components, Chart, More |
| ^BFX | BEL-20 | 2,558.00 | 16.30 (0.64%) | Components, Chart, More |
| ^FCHI | CAC 40 | 3,705.23 | 13.74 (0.37%) | Components, Chart, More |
| ^GDAXI | DAX | 7,732.15 | 56.32 (0.73%) | Components, Chart, More |
| AEX.AS | AEX General | 338.90 | 1.53 (0.45%) | Components, Chart, More |
| ^OSEAX | OSE All Share | 521.23 | 1.25 (0.24%) | Components, Chart, More |
| ^OMXSPI | Stockholm General | 373.60 | 0.02 (0.01%) | Components, Chart, More |
| ^SSMI | Swiss Market | 7,540.58 | 55.59 (0.74%) | Components, Chart, More |
| ^FTSE | FTSE 100 | 6,349.14 | 23.26 (0.37%) | Components, Chart, More |
| FPXAA.PR | PX Index | 1,006.03 | 10.10 (1.01%) | Chart, More |
| MICEXINDEXCF.ME | MICEX Index | 1,487.17 | 0.00 (0.00%) | Chart, More |
| GD.AT | Athex Composite Share Price Index | 1,011.09 | 12.61 (1.26%) | Chart, More |
http://finviz.com/futures.ashx
http://finviz.com/fut_chart.ashx?p=m5&t=ES
http://finviz.com/fut_chart.ashx?p=m5&t=ZB
http://finviz.com/fut_chart.ashx?p=m5&t=DX
http://finviz.com/fut_chart.ashx?p=m5&t=GC
http://finviz.com/fut_chart.ashx?p=m5&t=SI
http://finviz.com/fut_chart.ashx?p=m5&t=CL
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from Seeking Alpha
Caterpillar (CAT)
Feb28: 5:56 AM Caterpillar (CAT) intends to cut 1,400 out 3,700 jobs at its Gosselies factory near Charleroi in Belgium. Caterpillar produces hydraulic excavators, loading vehicles and engine parts at the plant.
Microsoft (MSFT)
Feb27: 11:20 AM The business versions of Office 365 (MSFT) are officially out. Prices range from $20/user/month for Enterprise & Government version to $12.50/user/month for the Small Business Premium version. An InfoWorld review praises 365’s feature set, admin tools, and ease of use, while granting “there’s still plenty of room for improvement.” With its latest Office refresh, Microsoft has gone out of its way to encourage a mass migration to subscription services, as it tries to keep Google Apps at bay.
Royal Bank of Canada (RY)
Feb28: 7:50 AM More on Royal Bank of Canada (RY) FQ1 earnings: Net income of $1.36/share up 12% Y/Y. Retail business income +11% Y/Y, with volume growth offsetting shrinking net interest margin. Wealth Management income +24%. As opposed to TD Bank, Capital Market business is strong, with income +25% Y/Y. Tier 1 capital ratio of 9.3%. 6:19 AM Royal Bank of Canada (RY): FQ1 EPS of C$1.36. The board declares C$0.63/share quarterly dividend, 5% increase from prior dividend of $0.60. Forward yield 4.06%.
Telefonica (TEF)
Feb28: 4:12 AM Telefonica (TEF): Q4 net profit -82% to €473M, with Venezuela’s currency devaluation hurting earnings by €417M. Debt -€5B to to €51.3B, plans to cut debt to €47B in 2013. To pay cash dividend of €0.75 a share.
TD Bank (TD)
Feb28: 7:41 AM More on TD Bank (TD) FQ1 earnings: Adjusted EPS pf $2/share up 9% Y/Y. Retail business is strong, with Canadian operations posting an 11% income gain Y/Y, U.S. up 12%. U.S. wholesale banking (trading, M&A), a different story, with profit off 18%. Tier 1 capital ratio of 8.8%. Book value/share of $48.78, up from $45 a year ago. 6:50 AM The Toronto-Dominion Bank (TD) declares $0.81/share quarterly dividend, 5.2% increase from prior dividend of $0.77. Forward yield 3.93%. For shareholders of record Apr. 03. Payable Apr. 30. Ex-div date Apr. 01.
Wal-Mart (WMT)
Feb28: 5:34 AM Wal-Mart’s (WMT) long-running inventory problems are “getting worse”, U.S. CEO Bill Simon has reportedly told an internal meeting. “We run out quickly and the new stuff doesn’t come in,” said Simon, who’s appointed a VP to fix the problem. A Wal-Mart spokesman downplayed Simon’s comments, although Californian department manager Evelin Cruz described them “as dead on.”
Vad’s Catch of the Day
Kaimu’s Sound Money
Deron’s Daily ETF Analysis
Stocks followed through on Tuesday’s reversal action with impressive gains across the board. All major averages gained at least 1.0%, with the S&P 500 and Dow Industrials leading the way at +1.3%. The rally was broad based, with 217 of the 239 industry groups we follow closing in positive territory.
While on the surface it seems that Wednesday’s advance was powerful, there was one very big piece of the puzzle missing and that was volume. Turnover actually decreased by 11% on the NYSE and by 6% on the Nasdaq. The light volume was surprising given the large percentage move and broad participation. The NYSE and Nasdaq volume pattern remains bearish (higher volume down days and lighter volume up days), as we have yet to see a bullish accumulation day in the past few weeks. We’d like to see at least one accumulation day print in a major index before we jump back in to the market on the long side.
Most leading ETFs or stocks are in need of a few weeks of rest after a decent advance and recent increase in volatility. For example, iShares Dow Jones Transportation ETF ($IYT) broke out from a 10-month long base and rallied about 15% before stalling out. Note the pick up in volatility the past two weeks. This is a sign that the price action may need a few weeks of base building. A 4-5 week base above the 50-day MA would be ideal:
First Trust DJ Internet Index Fund ($FDN) failed a recent continuation breakout to highs and has pulled back to the 50-day moving average. Like $IYT, $FDN needs another a few more weeks of sideways consolidation above the rising 50-day MA:
iShares Dow Jones US Oil & Gas Exploration ($IEO) has recently pulled back to the 50-day MA, after a base breakout at $66. On the chart below, note the pick up in volatility on the way down to the 50-day MA. As $IEO digests the recent advance over the next few weeks, the price action should tighten up while setting higher lows within the base:
On the individual stock side, several big cap leaders are holding up: $LNKD, $NFLX, $KORS, $AIG, $GS, $BAC, $JPM, $YHOO, $VLO, $VMED, and $HD are a few. We also keep tabs on what relative strength stocks are breaking down below the 50-day MA, and they are: $FSLR, $SSYS, $VSI, $HSNI, $MHO, $DDD, $RNF, $VMC, $RKUS, $VAC, $DDS, $GNRC,$LCC, $RYL, $REGN, $LEN, and $URBN.
As mentioned above, we have no problem returning to the long side within the next few days if setups are there and a major average prints an accumulation day. But until that happens, we are staying primarily in cash, with a few selective short positions. Subscribers to The Wagner Daily, our ETF and stock picking newsletter for swing traders, should note our updated stop prices in the watchlist section above. Details at http://www.morpheustrading.com.
Point and Figure on Canada
OptionOracle
Harp’s Roadmap
Cara on the Metalminers
Cara on the International Markets
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
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