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Daily Trade Signals
for All Major Markets incl. Currencies, Forex,
Energies, Financials, Grains, Indices, Metals, Softs Daily Trading Signals
Up
Trend
Down
Trend
No
Trend
Daily P/L Tracking for
Active Signals Documented
Track Record2003(+237.3%) - 2004(+120.3%) - 2005(+42.7%) - 2006(+86.9%) - 2007(+32.67% YTD)
Oct 30, 2006 - Overnight Global News
US Q3 earnings - This will be another busy week for Q3 earnings with 94 companies out of the S&P 500 due to report. Reporting season then starts to wind down with only 24 companies reporting next week and 17 reporting in the following week. Q3 earnings on balance have been much better than expected. Q3 earnings growth for the S&P 500 companies is now expected at +17.4%, well above expectations of +14.0% as recently as October 1, according to Thomson First Call. Regarding companies that have reported Q3 earnings, 74% have reported earnings that are above expectations, much more than the usual 60%, according to Thomson First Call. The market is then expecting earnings growth to slow to +10.6% in Q4, +8.4% in Q1, and +6.5% in Q2. Companies with market caps above $50 billion reporting earnings this week include Verizon Communications today, Procter & Gamble on Tuesday, Time Warner on Wednesday, Qualcomm on Thursday, and Berkshire Hathaway on Friday.
Today's Japan Sep industrial production report of -0.7% m/m was stronger than the market consensus of -0.9%. The weak report nevertheless sparked some strength in Dec JGBs today (+0.16 at 134.31). The government is projecting a further -0.2% decline in industrial production in October and then a +0.5% rebound in November. The weakness in industrial production supports the market consensus that the Bank of Japan at its meeting that concludes tomorrow night (ET time) will leave its monetary policy unchanged with an overnight rate of 0.25%. The market consensus is that the BOJ will raise rates another notch by the end of Q1-2007.
Overnight U.S. Stock News
Dec S&Ps this morning are trading -3.10 points. Bearish factors include continued economic worries after last Friday's weak US GDP report of +1.6% and this morning's weakness in overseas stocks. Bullish factors overnight include the 2-tick rally in T-note prices and the sharp sell-off in crude oil prices of -$1.14 per barrel. The US stock market last Friday sold off fairly sharply after the US GDP report of +1.6% sparked worries about a weaker than expected economy (Dow -0.60%, S&P 500 -0.85%, Nasdaq Composite -1.20%). Tech stocks led by Intel were hurt last Friday after Goldman Sachs reduced its growth forecast for mother-board shipments.
European stocks are trading moderately lower this morning (Stoxx -0.61%, FTSE -0.60%). The Nikkei index today fell sharply by -1.90% due to concern about Japanese export demand with the weak US GDP report of +1.6%.
Verizon (VZ) is down -0.6% in European trading this morning ahead of its earnings report today (analyst consensus 66 cents). Humana reported its earnings this morning at 95 cents per share, which was mildly below the consensus of 98 cents per share.
American Power Conversion (APCC) surged +28.8% (+$6.77 to $35.53) this morning in European trading after France's Schneider Electric offered a 30% premium to buy the company for $36 per share, or $6.1 billion in cash.
Wal-Mart (WMT) is down -0.4% in European trading this morning after reporting on Saturday that same-store sales in October were weak at +0.5%. That was below an earlier prediction for 1% growth and was below the plan for growth of 2-4% growth.
Exelon (EXC) is down -1.2% in European trading this morning because Citigroup cut its rating on the stock to "hold" from "buy."
KB Home (KBH) fell -2.2% in after-hours trading last Friday after the homebuilder said it received a bond default notice from an investor because of delays in filing its financial statements.
Lowe's (LOW) rallied 1.1% in after-hours trading after Jim Cramer recommended the stock on his "Mad Money" show because he said that more people will do more home remodeling.
Princeton Review (REVU) is likely to be active today after saying late Friday that it will restate earnings for 2004 and 2005 to account for its accounting treatment of preferred stock.
Research in Motion (RIMM) announced late Friday that the SEC has begun a formal inquiry into the company's stock option practices.
Today's U.S. Market Focus
This week’s key US economic news includes today’s Sep core PCE deflator (expected +2.4% vs Aug’s +2.5%), tomorrow’s Oct US consumer confidence report (expected +3.5 to 108.0), Wednesday’s Oct ISM manufacturing index (expected +0.1 to 53.0), Wednesday’s Oct vehicle sales report (expected 16.2 mln vs 16.6 mln in Sep), and Friday’s Oct unemployment report. Friday’s Oct payroll report is expected to show another lackluster increase of +125,000 and an unchanged level of unemployment at the 5-year low of 4.6%. Fed Chairman Bernanke speaks on Wednesday on the topic of community development banks.
Fed policy - Expectations for Fed policy eased after last Friday’s weaker than expected Q3 GDP report of +1.6%. The market is no longer discounting a small 10% chance of a Fed tightening in the Dec-Jan period, as it was earlier last week. The market is now fully discounting an unchanged monetary policy through January 2007, and is then fully discounting a 25 bp rate cut to 5.00% by July and a 42% chance of a further cut to 4.75% by September. The next FOMC meeting isn’t until December 12, when the market is unanimously expecting no change in Fed policy.
PCE Deflator – The market consensus is that today’s Sep PCE deflator will ease to +3.0% y/y from +3.2% y/y in August. The core PCE deflator, which is the Fed’s preferred inflation measure, is expected at +0.2% m/m, matching Aug’s +0.2% increase. On a year-on-year basis, the Sep core PCE deflator is expected to ease to +2.4% from +2.5% in August. Any decline in the core PCE deflator today would be welcome news since the core PCE deflator in August rose to an 11-1/2 year high of +2.5%. The core PCE deflator has risen sharply by 0.5 points from +2.0% to +2.5% just since spring, which is one of the reasons behind the Fed’s concern that core inflation may not decline as Fed expects. If the core deflator should be stronger than expected today at +2.5% or even +2.6%, then the market may build back in a small chance of a Fed rate hike in the Dec-Jan timeframe. The FOMC in its Sep 20 meeting minutes said that Fed members feared that there was a “substantial risk” that core inflation would not drop as they expect. The Aug core PCE deflator of +2.5% was well above the generally-accepted 2.0% ceiling for inflation. The Fed would normally still be in a tightening mode in a response to a core deflator of +2.5%. However, the Fed stopped its tightening due to the weaker economy, the slumping housing sector, and the tightening that is still in the pipeline from its 2-year-long hike in the funds rate from 1.0% to 5.25%.
Dec T-note prices this morning are trading +2 ticks, extending last week's strong upside momentum. T-note prices last Friday extended the sharp 3-session rally after the Q3 GDP report came in weaker than expected at +1.6%. The T-note market had already rallied sharply last Wednesday and Thursday after the FOMC at last week's meeting essentially rolled-over its post-meeting statement and did not tighten up its language on inflation risks. The other main bullish factor late last week was the conclusion of the Treasury's three T-note auctions. The Treasury this Wednesday will announce the details of the 3-year and 10-year T-note auctions to be held next Wednesday and Thurday.
The dollar this morning is trading mixed with the dollar/yen down -0.17 yen and the euro/dollar down -0.17 cents. The dollar index in the latter half of last week fell sharply due to the FOMC minutes on Wednesday and the weaker than expected US GDP report of +1.6% on Friday. Those reports undercut expectations for Fed tightening and undercut US interest rate differentials as well.
Dec crude oil prices this morning are trading sharply lower by $1.14 g due to continued concern that OPEC will not cut production by enough to quickly draw down world inventories. Dec crude oil prices last Friday closed +39 cents, reversing part of the previous session's sharp $1.04 sell-off and consolidating above last Monday's contract low. The market is mainly focused on the extent to which OPEC will implement its Oct 19 production cut of 1.2 mln bbl and the weather in the northeast US which will determine heating oil demand.
Sep personal income expected +0.3%, Aug +0.3% m/m. Sep personal spending expected +0.2%, Aug +0.1% m/m. Sep PCE deflator expected +3.0%, Aug +3.2% y/y. Sep core PCE deflator expected +0.2% m/m and +2.4% y/y, Aug +0.2% m/m and +2.5% y/y.
0830 ET
Richmond Fed President Jeffrey Lacker speaks on monetary policy tactics and strategy in Baltimore.
0915 ET
Chicago Fed President Michael Moskow delivers welcoming remarks in Chicago at Chicago Fed’s conference on “Can Higher Education Foster Economic Growth?”
1300 ET
Weekly 3-mo and 6-mo T-bill auctions.
Canada
0830 ET
Canada Sep industrial product price expected –0.7% m/m, Aug –0.5% m/m. Sep raw materials price index expected –4.0% m/m, Aug –3.5% m/m.
Japan
1850 ET
Japan Sep industrial production expected –0.9% m/m and +4.9% y/y, Aug +1.8% m/m and +5.9% y/y (Sun night ET release time).
1830 ET
Japan Sep jobless rate expected 4.1%, Aug 4.1%. Sep job-to-applicant ratio expected 1.09, Aug 1.08 (Mon night ET release time).
1830 ET
Sep Japan Sep overall household spending expected –2.1% y/y, Aug –4.3% y/y.
1900 ET
Bank of Japan monetary policy meeting (overnight rate expected unch at 0.25%).
2030 ET
Japan Sep labor cash earnings expected +0.2% y/y, Aug –0.5% y/y. Sep overtime earnings, Aug +1.3% y/y.
France
0245 ET
French Oct quarterly mfg survey.
1800 ET
French Sep unemployment change expected –20,000, Aug +9,000.French Sep unemployment rate expected 8.9%, Aug 9.0%.
United Kingdom
0430 ET
UK Sep final M4, prelim +1.0% m/m and +13.7% y/y. Sep final M4 sterling lending, Aug +17.0 bln stlg.
0430 ET
UK Sep net consumer credit expected +800 mln stlg, Aug +800 mln stlg. Sep net lending secured on dwellings expected +9.0 bln stlg, Aug +9.1 bln stlg.
0430 ET
UK Sep mortgage approvals expected 119,000, Aug 119,000.
Signals are generated & published daily before market opens based on closing prices & daily statistics. Account trades one FUTURES contract per $25,000 investment.All signals are entered Market On Close (MOC) or Stop Close Only (SCO).
*All Hypothetical #'s & narratives assume profit is taken out at the end of each year. Reinvesting profits would lead to larger gains.
Narratives by Year & in Total
In total from 2003-2006, an initial investment of $25,000 earned $121,797 profit, to end the 4-year period with an account value of $146,797, for a total gain of 487,2% & an average annual gain of 121,8%. The average monthly gain (in 4 years) was 10,1%.
In 2006, an initial investment of $25,000 earned $21,717 profit, with a YTD account value of $46,717, a YTD gain of 86,9% & an annualized gain of 86,9%, at a run rate to more than double the initial investment. The average monthly gain YTD is 7,2%.
In 2005, an initial investment of $25,000 earned $10,682 profit, to end the year with an account value of $35,682, an annual gain of 42,7%. The average monthly gain was 3,6%.
In 2004, an initial investment of $25,000 earned $30,080 profit, to end the year with an account value of $55,080, an annual gain of 120,3%, again more than doubling the initial investment. The average monthly gain was 10%.
In 2003, an initial investment of $25,000 earned $59,318 profit, to end the year with an account value of $84,318, an annual gain of 237,3%, more than tripling the initial investment. The average monthly gain was 19,8%.
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DISCLAIMER: INDIVIDUAL ACCOUNT PERFORMANCE RESULTS MAY VARY DUE TO A VARIETY OF FACTORS, TO INCLUDE STARTING DATE, ACCOUNT SIZE, COMMISSIONS, PASS-THROUGH FEES, SLIPPAGE & OTHER FACTORS.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.THE RISK OF LOSS IN TRADING COMMODITY FUTURES MAY BE SUBSTANTIAL. ONLY RISK CAPITAL SHOULD BE USED FOR SUCH INVESTMENTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
Daily Trade Signals
for All Major Markets
