Morning Update: 6/14/2012

The stock market indices had a strong morning and a very weak afternoon and ended up negative on the day. The day started out with a little move down, and then they quickly snapped back to new 2-day highs. They then rolled over, bounced, and then came down hard after the lunch hour when the Nasdaq 100 dropped from 2557 to 2520, a 37-point drop. The S&P 500 dropped from 1327 to 1310, a 17-point drop. In the last 10 minutes they bounced to avoid even steeper losses.

Stepping back and reviewing the hourly chart patterns, the indices had a very negative afternoon on news from overseas, and only the last 10-minute snapback prevented them from closing at the lows for the day.

It was a decidedly negative day, and while we’re stepping back to look at the overall pattern over the last month or so, we see a large potential head-and-shoulder bottom forming. It depends on whether or not they hold support or rally back or not.

We’ll have to see how that goes in the next few days.

 

Instrument Strategy Market pos. Quantity Entry price Exit price Profit
ES 09-12 Initiative Trade Balance Extreme Short 3 1317.75 1305.75 1786.5
NQ 09-12 Initiative Trade Balance Extreme Short 1 2549.25 2536 260.5
NQ 09-12 Initiative Trade Balance Extreme Short 3 2549.25 2536 781.5
NQ 09-12 Initiative Trade Balance Extreme Short 2 2547.75 2550 -99
NQ 09-12 Initiative Trade Balance Extreme Short 1 2547.75 2550 -49.5
NQ 09-12 Initiative Trade Balance Extreme Short 1 2547.75 2550 -49.5
NQ 09-12 Initiative Trade Balance Extreme Short 4 2548 2549.5 -138
NQ 09-12 Initiative Trade Balance Extreme Short 2 2547.5 2549.25 -79
NQ 09-12 Initiative Trade Balance Extreme Short 2 2547.5 2549.25 -79


Earnings
Thursday, June 14

Economics
08:30 Initial Jobless Claims – consensus 375K, prior 377K
08:30 Continuing Claims – consensus 3269K, prior 3293K
08:30 Consumer Price Index – consensus -0.2%, prior 0.0%
08:30 CPI Ex Food & Energy – consensus 0.2%, prior 0.2%
08:30 CPI NSA – consensus 229.800, prior 230.085
08:30 Current Account Balance – consensus -$132.0B, prior -$124.1B
11:00 Fed to purchase $1.5b-2.25b in 25 to 30-year bonds
1:00 U.S. to sell $13b in 30-yr bonds (reopening)
04:30 JPY Industrial Production
07:30 CHF Swiss National Bank Rate Decision
08:00 EUR ECB Publishes June Monthly Report
09:00 EUR Eurozone CPI
12:30 UK to sell GBP1.5b 48-year bonds

Before:
Kroger (KR) EPS 73c, revs $29.25B
Smithfield Foods (SFD) EPS 56c, revs $3.23B
After:
No major earnings

The PPI dropped 1.0%, more than the expected 0.6%. Retail sales were down 0.2%, in line with expectations. Oil inventories dropped 200,000 barrels. Last week they dropped 100,000. On Thursday we will get the CPI and jobless claims.

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