Friday, December 23, 2011

Holiday wishes

This blog came to life on February 23rd of 2009 with a three-part mission: to help crystallize my thoughts on markets and travel, to share these ruminations with whomever might care to read them (caveat: such readers would surely be better served by investing their time elsewhere), and to archive these personal considerations and experiences for my own later review.

Some semblance of elegant symmetry exists between this 2/23 christening date and the 12/23 appellation of the present, perhaps rendering as auspicious this post’s design, which aims to be an overview of sorts, an essay for taking stock. Additionally, the elapsed time between incarnation and the present amounts to just a few weeks over the round number of 1000 days – 1033 to be precise, according to the calculator on – further adding impetus to the idea of thoughtful review.

And yet, there’s precious little to comment upon. The blog has generated few posts (and yes, the author knows who is to blame!) – 37 in 2009 and again in 2010, then a mere 18 in the nearly-elapsed 2011, inclusive of these scribbles.

Limitation in quantity also extends to quality. As epitomized by this review, too much focus appears directed toward aimless verbosity, too little on impactful substance. At least breadth of content has proceeded according to original design, spanning the disparate realms of markets, aviation and travel, with unification indirectly attempted by tie-in to my own experiences. But whether such a collection of less than congruous topics carries any merit besides satisfaction of my own ego remains an open question.

This is where a promise of improved engagement would logically fit; indeed, a hollow allusion to the shortly upcoming season of New Year’s resolutions would beckon. But I’ll refrain from any such statement.

Instead, I’ll offer the comment that, should regular posting of markets-related analytics come to fruition, it would likely meet the original three-part mission of the blog, and quite emphatically at that. I’d better examine my own views, these would be shared with some semblance of a public, and my record would be open to subsequent self-examination. The same could be said of regular output of aviation and travel content.

Perhaps the most emotionally fulfilling motivation for true engagement with this at-once public and private pad is still altogether different. I savour the deliberately, elegantly, purposefully written word. And while I have never taken much interest in literature or composition, I do feel alluring and deeply emotional parallels in reading, say, an expertly edited article in the FT’s Arts section and, on the other hand, intensely experiencing an evocative piece of art or music. All potentially bring about an intense happiness, a flooding of the brain with some neurotransmitter, a sometimes subliminal experience akin even to that felt in romantic pursuits or significant personal accomplishments.

I’m not fooling myself; my own child’s play on this (cob-web filled) corner of the internet, when set against the kind of writing that I find inspiring, is even more inferior than is the painful screeching of nails on a chalkboard vis-à-vis brilliant calligraphy. Making matters worse is that I can’t devote the requisite time to polishing my attempts at a coherent essay. The blog has always been meant as an evening “wind-down” vehicle, a phase-of-day when neither time nor the perfection-seeking motivation is in relative abundance. In any event, my current professional goals center firmly on technical analysis and trading profitability (in that order), not on packaging bits of markets wisdom for wider dissemination.

Those disclaimers aside, I sincerely hope you’ll join me on this journey to more committed and substantive engagement with the markets, et al – and, moreover, that I take up the invitation, too!

Tomorrow is Christmas Eve, often the most joyful day of the year, individually and collectively, in the Polish community of which I am a part. In that spirit, I wish everyone a most restful and lovely holiday, that each might discover their most hopeful and selfless selves, that generosity and the spirit of communion with others, loved ones and friends and acquaintances alike, might flourish in each of your minds. May you re-evaluate and re-discover, re-think and re-commit.

I will certainly be treasuring the upcoming days’ re-orientation of mind and soul. But all the same, I will return with bubbling eagerness to my great love of the present, disciplined analytics of that bewitching social creature known as the financial markets, upon the resumption of business in the New Year.

Happy Holidays and Merry Christmas!

Thursday, October 27, 2011

Copper, et al, at resistance

Many low-risk trade ideas (i.e. trade theses that are suitable for tight stops) have presented themselves during today's ebullient markets. One of these is to short copper futures (/HG). Here's a chart with 4-hour bars, stretching from early 02/2011.

/HG, 4-hour bars

The upper line of the red price channel is nicely defined, exactly touching 3 important highs. The bottom line is not well defined, though its slope is significant in other portions (not highlighted above in any way) of the chart's price action.

As mentioned, this trade thesis has a tight stop: penetration of the upper line of the red price channel, i.e. about $3.73. One potential profitable-exit point is the lower line of the green price channel, i.e. about $3.52.

Of note, copper futures are normally presented, as is my understanding, in dollars-per-tonne (1 tonne = 1,000 kg, but 1 ton = 2,000 lbs = 907.19 kg). This observation is based on usually seeing copper futures prices quoted in the Financial Times; thus, it's a British perspective. This is relevant as /HG quotes copper in dollars-per-pound; thus, the futures price is not in the range of several thousand dollars, as might be expected, but rather only a few dollars.

Thursday, August 18, 2011

DCA-ORD on United: Efficiency and Gemuetlichkeit

This post is a culmination of a trip that began with a MKE-ORD hop on Skywest and an ORD-LGA journey with United.

The return journey from Washington Reagan to Chicago O’Hare was characterized by efficiency and Gemuetlichkeit.

I had been ticketed to travel DCA-ORD-MKE, departing National Airport at 4:35p and arriving at Mitchell Field at 6:55p, with a brief 40 minute O’Hare layover in the interim. Arrival into Milwaukee would be well-timed for connection to the 7:45p departure of an Amtrak train back to Chicago’s Union Station. Anticipated afternoon thunderstorms in the Chicagoland area, however, led United to cancel the 4:35p DCA-ORD flight. I’d been anticipating the move, as United often pares its flight schedule on routes with hourly service when summer thunderstorms threaten. I noticed the cancellation online around Noon and immediately called the 1K desk for rebooking onto the 5:31p DCA-ORD flight, with the ORD-MKE connection deferred until the following morning. Indeed, I called so soon that upgrade inventory still remained on the new flight, allowing me to immediately clear into the F cabin (although this feat was assisted by the equipment on this later flight: a 757-200 with 24 forward-cabin seats).

Being a connoisseur of early morning flights –the blush of dawn, the endless possibilities of a new day, license for copious consumption of steaming coffee – I was thrilled at exchanging my evening ORD-MKE dash for one at 6:44a on the following day. The morning service would likewise connect nicely with a Chicago-bound Amtrak Hiawatha train, and I was looking forward to the rose-coloured light with which the sun might bathe Chicago’s northern suburbs during my time as airborne observer of the lands below. And I knew that, once I satiated my hunger for natural beauty outside my window, I could redirect my charged and rested mind to the crisp pages of the morning’s hot-off-the-press Financial Times.

But these musings on beauty and knowledge would concern the following day. This Tuesday afternoon would bring a different experience entirely: the quintessence of efficiency and comfort between the Washington and Chicago markets, namely a flight with United’s B757 on the DCA-ORD route.

Why do I boldly describe the journey as such? Indeed, I am writing about U.S. domestic, short-haul commercial air travel, hardly a glamorous topic for most. I will attempt a defense shortly, just after I sketch my transit to the airport.

With the 5:31p departure time bearing down with increasing weight, I departed my friend’s Arlington, VA home at 4:40p – a daringly late departure time by even my highly risk-seeking standards. In the half-hour prior, I was mesmerized by investigation of a notable session in the gold futures market – the yellow metal had sharply accelerated its upward trend and suggested itself as being in a short-term capitulation phase – and, subsequent to mapping the price action’s channels over charts of varying time frame, decided to open a small short position in GLD, one of the metal’s ETFs. All this was finally accomplished by 4:40p, and with a slight jog I emerged from chilly air-conditioning and into the oppressive Washington summer heat.

My friend’s apartment is situated midway between the Clarendon and Rosslyn metro stops; thus, after only a few minutes, I was descending into the relative cool of the underground. While riding the exceptionally lengthy escalator into the depths of Rosslyn, I quickly called up the Washington Metro website on my phone, learning that a DCA-bound train would be departing in a mere minute. Lady luck was smiling upon me.

And so, I was at Reagan with a comfortable 25 minutes before departure time. The security line into United’s pier of gates was particularly short, and I was pleased to avoid the full-body scan on this encounter with the “Agency.”

Pleased and relieved at the efficiency of my transit between Rosslyn and air-side Reagan, I invested some of my surplus pre-departure minutes toward changing into a fresh shirt. I then approached the gate, elected to check my large roll-aboard (as I correctly anticipated that the diminutive overhead bins in F would be already filled), and strode aboard among the last of the passengers.

Allow me, reader, a brief, impassioned interlude: flight with a United Boeing 757 between Reagan and O’Hare is a truly singular experience! My accolades are merited by the journey’s combination of superlative iterations of various factors, including airport locations, frequency of alternative services, and aircraft equipment. Thus: Reagan and O’Hare are both highly convenient airports to my destinations in Washington and Chicago, respectively; United is the only airline to offer hourly service from early morning through evening on the route, with nearly all service operated by mainline aircraft and crews; and of United’s approximately fifteen daily flights on the DCA-ORD route, at least one is usually operated by the Boeing 757, a superior allocation owing to its stately and beautiful proportions, generously sized forward cabin, and rich history as backbone of the United domestic network during the recent past.

Turning left at door 2L, I ventured the few steps to the starboard window seat at row 2 and settled in. The haze of time obscures precise recollection of many pre-departure details – I record this account about a fortnight later – but I believe pre-departure beverages were offered and Channel 9 was enabled.

Takeoff proceeded with minimal delay down runway 19, allowing for customary views of the Mall and Georgetown before establishment of a westerly heading. Once the flight crew settled our aircraft at cruise, further beverage orders were taken and the snack basket was offered. The below exhibits of evidence confirm that I ordered a glass of red wine (merlot, if I recall correctly) and helped myself to a package of Popchips (et al).

Landing occurred, if memory serves, on O’Hare’s 22L, with our approach consisting of a gallop approximately above Western Avenue for much of the Chicago’s length before adjusting heading toward the northeast to meet the downwind channel for our runway. Our 180-degree turnaround then took place over the Lake, just off the coast of Highland Park.

The flight’s rollout from 22L positioned us ideally for a short taxi to the middle of the C pier of Terminal One, where we parked at gate C17. Upon deplaning, I made my way immediately to baggage claim, where my gate-checked bag emerged after a reasonable wait of three or five minutes.

In sum, the journey was notable for its efficiency: I left for Reagan less than an hour before departure, experienced no delays enroute to O’Hare, and was retrieving my checked bag only 3 hours after departing my friend’s house in Arlington. The trip was United’s shuttle service at its speediest.

In addition, the feeling of Gemuetlichkeit was palpable, at least for this ardent United lover. It was a pleasure to fly aboard the Boeing 757, the upgrade into the forward cabin was most welcome, and the efficiency cited above further reinforced the feeling of satisfaction.

Tuesday, August 9, 2011

9 August (Tues), Morning charts

The following is a rapid-fire snapshot of Wall Street's four main indices from the perspective of 5-minute bars.

The charts, being a market-hours-only account of the action, hide the tremendous drama seen in the last overnight session, when S&P 500 futures (/ES) first swooned from a close near 1115 to below 1080, only to rocket to a hair below 1150 a few hours later, all while North America slept.

At the moment, markets remain poised for a major Fed announcement, which some hope will bear revelations of QE3.

S&P 500 (SPX), 5-minute bars:

DJIA (DJX), 5-minute bars:

NASDAQ (COMP), 5-minute bars:

Russell 2000 (RUT), 5-minute bars:

Friday, August 5, 2011

5 August (Fri), Chart roundup

As the markets close out the most volatile week of the year – indeed, price action is eerily reminiscent of the horrors of February 2008 – a look at the daily-bars charts of leading financial futures contracts is most instructive.

/ES, daily bars:

/YM, daily bars:

/NQ, daily bars:

/TF, daily bars:

Tuesday, August 2, 2011

2 August (Tues), Evening summary

Today’s Wall Street action was a merciless knife through the soft butter of trendlines galore. At the 4p EST closing bell, the S&P 500 was 2.56 percent lower, while the DJIA and NASDAQ gave up 2.18 and 2.75 percent, respectively. Financial futures contracts continued tip-toeing lower through the after-hours market.

Among the casualties was a 9-month price channel on the S&P 500 E-mini futures contract (/ES) – the line is coloured yellow in the chart below. The June nadir of 1252.25 was undercut as well. After-hours trade brought /ES to the round number of 1250 and several ticks below. The next significant price-channel support on the daily-bars chart appears a good distance away, near 1225.

/ES, daily bars:

The gold contract (/GC), sometimes a measure of risk aversion and other times one of risk appetite, today rallied in vertiginous fashion; clearly the zeitgeist of today's session pronounced the yellow metal as a safe harbour. In fact, gold has rallied so much in recent days that the current price -- about $1660 an ounce (yes, already so high!) – kisses a significant upward-sloping price channel on the daily-bars chart. As such, price action is at heightened risk of creating a short-term top.

/GC, daily bars:

Monday, August 1, 2011

1 August (Mon), Evening summary

Markets were whipsawed today in turbulent trade, with S&P 500 E-mini futures (/ES) registering a range of nearly 35 points. Of particular note, the period of 9:30a to 10:15a (EST) saw the /ES contract plummet nearly 30 points, in the process undercutting the lows of last week’s volatile markets. The afternoon saw a rebound, unlike the bearish declines seen on every afternoon of last week, but the indices nonetheless closed lower.

At the close of trade, the S&P 500 settled 0.41 percent lower, the DJIA inched down 0.09 percent, and the NASDAQ slipped 0.43 percent. The small-cap Russell 2000 shed 0.52 percent.

The swift declines of the last six sessions chart in particularly elegant fashion with respect to DJIA E-mini futures (/YM). Consider their 15-minute bars chart below. A single price channel fits many critical points of the data, including today’s capitulation low and the high of the subsequent afternoon rally. Of note as well is last night’s overnight price action: a princely rally. Indeed, such was the futures’ immediate reaction to Sunday’s news that a debt-ceiling deal was tentatively accomplished.

/YM, 15-minute bars:

Shifting to a more macro perspective, there exists significant evidence that today’s capitulation low may be durable. A 4-hour bars chart of /ES supports this thesis of a durable low through a snug price channel (the peach coloured lines in the chart below). Indeed, the slope of this line also carries significance when plotted within the price channel (for instance, as depicted by the green line).

/ES, 4-hour bars:

More evidence for a bullish outlook exists in the precious metals market. Neither silver nor gold are leaping to fresh highs, which indicates that investors are not acutely fearful of a fresh financial crisis. More specifically, silver futures (/SI) continue to ease off the highs reached in the middle of last week: $39.32 (latest tick) versus a high of $41.46 on Wednesday, July 27th. The gold futures contract (/GC) is some $15 off its high of $1637 reached last week.

Nonetheless, the market is in a confirmed bearish reversal: lower lows are in abundance. Caveat emptor.

Saturday, July 30, 2011

ORD-LGA on United: Comfort despite delays

This account of an evening flight to New York is the continuation of a trip that began with a morning hop-skip-&-jump via regional jet from Milwaukee’s Mitchell Field to Chicago O’Hare.

After three-quarters of a workday – par the course for a Friday – it was again time to fly. The day had begun with a drive from Chicago to Milwaukee followed by an immediate return journey in the skies, as mentioned above, and it would wind down in the same, ahem, elevated manner.

Boarding pass already in hand, I arrived at O’Hare’s Terminal One drop-off curb some 30 minutes before my flight’s scheduled departure time of 5:30p. The timing was a tad tight, considering that the duration of Friday evening security lines have both a higher mean and variance than the typical case. And such description applies to United’s elite TSA line too, perhaps even more emphatically.

I was unfazed upon stepping into the terminal, however, for just seconds before I received an Easy Update email that the departure time of United 462 would be pushed to 6:01p on account of an air traffic control delay. The security line bared its fangs but bit gently; I was through in about fifteen minutes.

At this point some cooling of my heels was unfortunately in order – my preferred modus operandi for airport arrivals is seamless passage through the security theater, down the concourse, and into the jetbridge either at the precise commencement of boarding (if traveling with a roll-aboard) or upon the reverberation throughout the crevices of the terminal of my flight’s final boarding call.

Some twenty minutes later, around 5:40p, the gate agent finally propped open the Bravo 10 jetbridge door and began United’s cumbersome boarding procedure. Fortunately, I did not have to wait and cringe as the ridiculous litany of mileage program tiers was sequentially invited to rush the boarding pass control choke-point, as I exercised my option of boarding at the beginning of the whole charade. Stepping onboard the post-merger colours A320 aircraft, I found the flight attendants and pilots chatting merrily and stepped expeditiously into my window seat in row two.

Unfortunately, our flight was in a hurry to go nowhere. As boarding wrapped up, the flight deck crew welcomed us aboard and announced the availability of Channel 9; yet no sooner had we pushed back and commenced taxiing, before I heard (on Channel 9) ATC’s instructions for us to hold 90 minutes in the “scenic pad.”

To this passenger at least, the wait was no tremendous trouble. I unfurled the day’s Wall Street Journal and enjoyed its contents alongside a plastic cup of red wine (glassware is generally not deployed by U.S. airlines while still on the ground). To the flight crew’s further credit, a refill was offered, and I also received an accompanying (plastic) glass of sparkling water upon my request. In no time the hour-and-change passed, our engines were restarted and warmed, and we were taxiing to runway 9R.

At this point, I must comment: the air traffic controller working the 9R – 4L pair was quite the pro! The young, female voice was anything but tenderly feminine; indeed, she suavely motored through an interminable chain of commands, all articulated with the speed of an auctioneer and yet with unslurred precision. At one point, she announced a Shuttle America E170 as cleared for takeoff while the preceding Airbus was still lifting its mains off the tail end of the runway. When the regional jet hesitated in commencing the roll, the controller reiterated the instruction, this time with slight agitation and an emphasis of the clearance as being for “immediate” takeoff. The Embraer complied, and only seconds after becoming airborne an arriving E145 glided in for a landing on the same runway.

Soon enough, we too were climbing into the heavens, all the while proceeding down the runway heading of 90 degrees. The sun was now mere inches over the western horizon and the day was cloudless, meaning that the reddish, sideways light that illuminated Des Plaines, Niles, Morton Grove and Evanston resulted in spectacular views. Periodic glances back toward the wing and pulsating turbofan confirmed that the celestial orb was dramatically low and of a fiery orange hue. What a brilliant sight!

In short order, our A320 made landfall in extreme southwestern Michigan, and the colours outside began morphing into the pale reds and haunting violets that might be found in a Rothko work.

The snack service soon commenced in the forward cabin, with the antipasti consisting not of edible offerings but, rather, of service runs that distributed hot towels, linen for the tray-table, and the passengers’ drinks of choice. (I shifted from red to white wine.) Service was efficient albeit not terribly gracious.

The pièce de résistance was the trayed “snack” distributed to each passenger. The offering is stated parenthetically as United’s reservations system terms the service as such (i.e. as a snack), however, in reality - and fortunately - the meal is considerably more substantive. Passengers have a choice between a panini turkey sandwich and a pasta salad with feta cheese. I opted for the latter and was not disappointed.

To be clear, one must expect a United Airlines domestic meal to err on the side of fat and carbohydrates, and my pasta salad was drenched in a fair bit more oil than I’d usually choose to apply. But I was resigned to a less healthy meal than is my norm, and was furthermore quite hungry; thus, I savoured the pasta, crumbled feta, and chopped assortment of cucumber, tomato and lettuce for what it was: an imperfect but appreciated dose of flavor and sustenance. The white wine accompanied the pasta and vegetables well, and its taste featured interesting hints of spice.

The evening’s route:

As the meal service wound down and tray-tables were cleared, I ordered a final beverage – another sparkling water with lime – and, for a change, bit into some intellectual matter: some end-of-the-workweek introspective writing. Output was greased by the concoction of alcoholic potions earlier consumed, and moments after I finished, our flight deck crew commenced descent.

The evening’s journey across space, thought and experience had one more quick, unplanned addition: a hold of one or two circuits in the vicinity of Trenton, NJ. Soon enough, however, ATC cleared our approach to La Guardia’s runway 22, and I savoured the unique crackle and directness of NY Approach controllers as we vectored toward a wheels-down at 10:51p.

Although the journey ended with a delay exceeding two hours, I cannot say that it was anything but comfortable.

Friday, July 29, 2011

MKE-ORD with Skywest: a splendid hop

This morning featured a welcome change of pace: the typical early-morning cycling jaunt to the local coffee shop was replaced by a quick hop into O’Hare with Skywest.

View from the tail end of the morning’s 22-minute hop:

To be clear, I adore my 6am cycling sprints down deserted streets for fresh-brewed coffee. Yet, it’s been several weeks since my last full-throttled acceleration down a runway, and today’s morning satiated my hunger.

The day began perhaps an hour earlier than most other weekdays. Some twenty minutes after a 4:15a alarm interrupted my dreams, I was beginning the approximately 75-mile drive to Milwaukee’s Mitchell Field, from which a Bombardier aircraft would shuttle me to Chicago’s O’Hare.

Where was I coming from? Ah yes, the northwest side of Chicago, a stone’s throw from my flight’s destination, O’Hare.

A quick explanation is in order. United Airlines, in accordance with common industry practice, publishes dearer airfares on nonstop routes than on connecting ones, particularly when the one-stop itineraries touch a market with spirited competition (as is the case with Mitchell Field). In planning this day’s trip to New York, I compared the comprehensive value of a no-hassles nonstop from O’Hare against that of a Milwaukee origination and selected the latter.

Thus, I was sprinting to Mitchell Field in the early morning, arriving under an auspicious, orange-tinged sky at the pregnant hour of 5:30a. The run-through of airport formalities was delightfully well-greased – Easy Checkin machine for my boarding passes, an inquiry at the ticket counter for a standby card that was expeditiously and pleasantly granted, a no-wait priority security lane for the first act of the day’s security theater, arrival at the gate to coincide with the commencement of boarding.

(Clearance of the flight’s standby list occurred with no drama, immediately after my arrival at the gate. Despite showing Y1 B0 availability in United’s reservations system, the flight left with a small handful of open seats.)

Push-back occurred in a punctual manner, and I enjoyed some moments of relaxation. Indeed, I had just enjoyed the good fortune of arriving into my window seat with neither the stress of cutting it too close nor the disappointment of being too early and waiting. Moments later the flight deck crew applied take-off power, and we were off!

Track of the morning flight:

Skywest enjoys the well-earned reputation of superior service in the class of regional carriers, and my morning flight was an emphatic affirmation of this perception. No sooner had Skywest (d.b.a United Express) 5475 leveled off at a 7,000 foot cruise, indicated by the pilots with a set of four chimes, but the personable flight attendant began the first of several waltzes down the aisle, first with coffee, next with bottled water, finally on the obligatory trash and safety check runs. Naturally, this would be normal behaviour on any flight in Europe or Asia, or on U.S. routes in excess of ~150 miles. Not so on the 66-mile MKE-ORD sector. I was very impressed.

Touchdown occurred at 6:44a on runway 27L, and we (the passengers) were entering Terminal 2 via the relatively well-situated gate F2A around 6:50a. After a quick Blue Line journey, I was back to where I started from, three hours later and one additional aviation experience richer.

29 July (Fri), Afternoon trade

The futures market made two significant downward moves overnight, first on news that House Speaker Boehner’s debt ceiling deal would not come to a vote that night, i.e. that the Speaker could not secure the requisite votes from members of his party, and second on release of the latest quarterly U.S. GDP statistic (+1.3 percent), which was weak.

/ES, daily bars:

The impact of these announcements pulled the S&P 500 E-mini futures to 1278.5 and ruptured a significant price channel line (as the reader can see for herself above).

Although the afternoon reaction has been bullish, taking the contract not only to 1290 price channel point but beyond to 1300, the bears might not have yet capitulated. The 1274 and 1263 areas – other price channel support points indicated in the chart above – may yet exert a downward pull before the debt impasse is resolved.

Thursday, July 28, 2011

28 July (Thurs), Morning call

Index futures are moderately higher this morning, being boosted by the 8:30a (EST) release of weekly jobless claim figures, which fell more than expected: down 24,000 to 398,000. (Source: CNBC)

Of particular interest will be whether S&P 500 futures (/ES) can clear the overnight high of 1306.

Two DJIA component stocks currently present a particularly interesting picture: Chevron (CVX) and Hewlett Packard (HPQ).

CVX, hourly-bars:

With regard to the former, Chevron has come into a critical support point of three separate price channels, all based on an hourly-bars chart. That said, the picture is not particularly promising to bulls. The longest of the channels (peach-colored) is already breached, while the middle-length channel (green-colored) will be broken if prices open near the current, pre-market bid / ask levels (about 105.3). The highest-sloping price channel (yellow-colored) is valid down to about $104.7. Additionally, this last price level – approximately $104.7 – has served since March as a horizontal support / resistance level.

Of note, Chevron will release quarterly earnings results tomorrow, July 29th, at 18:00 (EST).

HPQ, hourly-bars:

Hewlett Packard has successfully formed an inverted head-and-shoulders pattern between May 17th, its prior earnings release (which was clearly disastrously received) and the present, a strongly bullish signal. The top line of the green price channel represents the neckline of the figure, while lows of late-May and mid-July are the twin shoulders. The mid-June nadir is, naturally, the head. A rally above the neckline on July 22nd completed the inverted head-and-shoulders figure, and the current pullback to that trendline, represented by yesterday’s close at $36.71, is a buying opportunity (per the above framework).

The theory would be invalidated by significant penetration of the neckline, namely a move of a dime or two below yesterday’s close.

HPQ earnings are not due until mid-August.

Wednesday, July 27, 2011

27 July (Wed), Evening summary

Markets plummeted today, continuously falling as the day wore on and ending virtually at session lows. Losses for the major indices ranged between 1.6 and 3.0 percent.

The broad-market S&P 500 surrendered 2.03 percent, while the DJIA and NASDAQ reversed their relative performance statistics of the recent sessions; the collection of industrials shed 1.58 percent, but the Naz was punished to the tune of 2.65 percent. The Russell 2000, inherently more volatile due to its being composed of small-cap stocks, fell 2.95 percent.

Uncertainty about the debt ceiling outcome continues to bedevil the markets. Indeed, media coverage is getting more frenzied by the day. Of note, there has been no significant positive development since last Friday’s impasse between the President and Speaker – none that has made the media coverage at least. The crisis has surely been a very significant contributor to gold’s ascent from $1480 per ounce to $1631, all since July 4th. Yet, today gold fell.

/GC, 4-hour bars:

Gold futures (/GC) appear to have hit price channel resistance during today’s session, reaching $1631 and then recoiling. But this withdrawal, coming on a risk-off, 2-percent-S&P-selloff day, suggests that investors are not single-mindedly panicking about a forthcoming default, as that might logically entail the purchase of gold.

The story in silver futures (/SI) is similar. Price has rallied impressively over the month (from $34 to $41.5 since Independence Day), but it eased today after touching price channel resistance.

/SI, 4-hour bars:

Among today’s biggest stories was the iShares Russell 2000 ETF (IWM), which declined with a monstrously red candle to price channel support at $80.0. As the discerning reader can infer from the chart below, IWM has made a tight-fitting (and, therefore, significant) nine-month price channel; its high, low and midpoint fit all intra-period highs and lows. Today’s sell-off has come to rest right on the channel’s lower support. Will tomorrow bring the expected bounce?

IWM, daily bars:

Tuesday, July 26, 2011

26 July (Tues), Evening summary

This trader’s attention has been focused of late on E-mini NASDAQ 100 futures (/NQ) as in the last few sessions the contract is consistently outperforming its peer index-tracking futures and, in a YTD chart with daily bars, seems poised for an upside break.

First, some brief commentary on the chart, an analysis that complements the written and graphical musings expounded in the 22 July evening summary. Please refer to the chart below.

/NQ, daily bars:

A notably bullish indication of the recent past occurred in mid-July when a brief downtrend in /NQ failed to reach the lower trendline (which connects the lows of mid-March and mid-June), instead halting in the 2325 vicinity. The price then roared back, not only retesting the upper resistance trendline, but also setting an incremental new high. The quickness of the upper trendline’s retest is also significant; the previous 2 tests were spaced some 2.5 months apart, while the current assault comes but two weeks after the last. Finally, the appearance of the last three candles as so-called dojis (meaning that the open and close is nearly identical) indicates that bears are unable to overpower the bulls, despite price action being at a purported resistance level.

This trader’s hypothesis is as follows: /NQ will continue treading water at this level – a few more dojis are in store – with a fresh bullish leg coming next week on news of a debt ceiling deal. For surely some deal will come. (If there were indeed non-negligible risk of a deal, Treasuries, the USD, and gold would be making bigger moves right now.)

To offer a quick bigger-picture summary, here’s how the indices ended today’s trade.

It was a marginally negative day across the board with another interesting instance of divergence between the DJIA and NASDAQ. The broad-market S&P 500 surrendered 0.41 percent, while the DJIA and NASDAQ shed 0.73 percent and 0.10 percent, respectively.

Friday, July 22, 2011

22 July (Fri), Evening summary

Among the standouts in today’s trade was a sharp contrast in the performances of the DJIA and the NASDAQ; the index of blue chips took a haircut of 0.34 percent, while its tech-heavy cousin advanced 0.86 percent. (The S&P 500 was virtually unchanged at +0.09 percent.)

The modest 24-point pop of the NASDAQ masks the important technical level reached in today’s trade, but a 4-hour bars chart of E-mini NASDAQ 100 futures (/NQ) bears all. Today’s price action catapulted the contract into highly significant price channel resistance. Yet the resistance is in stark danger of failing, as today marks its second test in short succession (the last was on 7/7). The shallow pull-back in the interim did not plumb down to the depths of the lower price channel, adding further evidence to the thesis of fragile resistance. An advance beyond 2440 or 2450 in next week’s trade would render the near-term outlook as strongly bullish.

/NQ, 4-hour bars:

Shifting perspective to the daily chart of /NQ, the viewer can easily attribute significance to the upper trendline of February to July, which is nothing but the upper line of the price channel mentioned above.

The broadening of the YTD price oscillations hint at an unstable topping formation which might portend a forthcoming bear market, although such an interpretation would be more plausible with more markedly diverging trendlines. In any event, an upside breakout -- so long as it is not a bear trap -- would naturally reject the hypothesis of there being any topping formation whatsoever.

/NQ, daily bars:

Changing gears, there appeared to be an opportunity during today’s market action for a long punt of Dow Jones Industrial Average Spdr ETF (DIA). A 3-minute bars chart reveals a well-formed channel of the week’s price action, and weakness during the 9:00am (CST) hour seemed to be headed for support at ~$126.00. Had selling pressure brought DIA to that level, it would have represented a relatively low-risk long entry point. Yet the trade did not appear; bulls emphatically appeared $0.25 too soon.

DIA, 3-minute bars:

As this trading day blended into the evening, the nation’s eyes turned to Washington, where the debt ceiling drama continued as House Speaker Boehner walked out of negotiations with President Obama. The President promptly convened a news conference during which he described in no uncertain terms the fragility of the negotiations and the dearth of time remaining. The (24-5) futures market was already closed for the weekend. In the alternative, how negative might the reaction have been?

Thursday, July 21, 2011

21 July (Thurs), Evening summary

Markets powered higher today, with S&P 500 E-mini futures (/ES) rising almost continuously from 5:00am CST straight into the after-hours market and tallying a cumulative appreciation of nearly 30 points (from ~1315 to ~1345).

The AH price at the moment –- 1343 @ 19:50 CST –- places /ES at price channel resistance on a 4-hour-bars chart. Should this resistance fail, subsequent selling pressure should develop around 1353, another price channel resistance area from the same chart.

/ES, 4-hour bars:

The daily-bars chart of /ES shows the futures contract had been developing a head-and-shoulders pattern from the start of the year through this past Monday (July 18), but the powerful rallies of Tuesday and today have significantly endangered the pattern’s completion. This is a bullish development, and it would be confirmed with a break above the trendline connecting the two shoulders (currently 1353).

Successful completion of the H&S pattern would require a break below the neckline, currently a price <1263. Of course, that may still transpire; such patterns sometimes have multiple right and/or left shoulders.

/ES, daily bars:

The S&P 500 ETF (SPY) presented a low-risk long opportunity in the market’s opening minutes, when prices opened above the 2.5-month horizontal support / resistance level of $133.20. A pullback to this area was predictably arrested, and prices commenced a renewed ascent that would last the entire session.

SPY, 1-hour bars:

Cisco Systems (CSCO) was a bullish standout in today’s markets, rallying over 3.4 percent. Anecdotally, the top of today’s WSJ contained the headline “Layoffs Deepen Gloom” and covered, inter alia, Cisco’s announcement of earlier this week to shed several thousand positions.

Downsizing had, in fact, overtaken CSCO long ago, as evidenced in the daily-bars chart. The capitulation low of mid-June ($14.78), however, has proven to be a mid-term low. A critical test will be whether CSCO can pierce significant price channel resistance just above, today at $16.62. Even if it eventually does, there is likely to be a short-term opportunity for a low-risk short play.

CSCO, daily bars:

Bank of America (BAC) has been an even more notable performer this week. The stock capitulated to significant price channel support at $9.40 and has since rebounded 9 percent.

BAC, daily bars:

The picture on the hourly-bars chart is just as impressive, with the YTD price action nicely defining the dominant price channel, and with the ex-$9.40 bounce occurring right on cue.

BAC, hourly bars:

A broad-market overview reveals that indices recorded gains in the range of 1 percent. The S&P 500 gained 1.35 percent, the DJIA added 1.21 percent, and the NASDAQ notched on 0.72 percent. These statistics reveal a considerable 0.63 percent divergence between the top-performing of the main three indices (the S&P 500) and the worst-performing (the NASDAQ). The Russell 2000 appreciated by 1.07 percent.

Sunday, January 2, 2011

Vienna, and Vienna to Krakow with LOT

Wien is an invigorating city for indefatigable seekers of intellectual and productivity-catalyzing inspiration. The city exudes a synthesis of the impeccable Germanic-Scandinavian functionality, historicity and/or civic beauty is the rule rather than the exception, there is a refreshing nonconformity with regards to retail standardization, particularly with regards to the cancer of the most ubiquitous Western brands. And it’s all packaged into a Hochdeutsch language milieu despite its extra-German localization. Five stars by my book!

The visit began swimmingly. I disembarked from the Airport-to-Centre Standtbahn at Rennweg, followed by ever-unfailing (knock on wood!) situational awareness instincts straight to the unmarked, picturesque row-house (row-house in the German sense, to be sure, not the Washingtonian one) which bears the Pension Bosch, and delighted in allowing the grandmotherly proprietress to show me around my efficiently appointed studio. At 40 EUR per night, inclusive of an exquisite Teutonic breakfast, I was not complaining about having to walk some feet to the shower, which was not en suite.

The day was spent, true to my personality, busily engaged at two of the town’s one-of-a-kind cafes. These were not local versions of Costa Coffee; rather, classic Viennese cafes are relics of 19th century urbane society, all priced for pauper-ish intellectuals and/or riffraff. Both classes would surely comprise the class of patrons in the ancient and less distant past alike. Waitstaff were dressed to the nines – in black tie, no less. But Melange went for about 3 or 4 EUR, Reisling (about 93mL) for 2 or 3.

Morning brought the bittersweet reality of imminent flight. Forthcoming travels on LOT, particularly inbound to the ojczyzna, are unequivocally occasions of great joy, for the journey and destination alike. The morning’s ride aboard LO 228 would be extraordinarily special. Not only would I enjoy breathing-in the usual airline formalities in the poetry of the Polish language, but I’d enjoy the twin rarities that are an international LOT journey aboard the ATR and, furthermore, an international sector that does not have Warsaw’s Okęcie as origin or terminus. Minutia for the vast majority, but meaningful to me.

Arriving at Wien Schwechat, I found myself in possession of a comfortable 55 minutes until scheduled departure time, but I swiftly discovered that generous buffer to be insufficient for the deluge of humanity assaulting all the Austrian Airlines check-in counters, including the Business Class / Star Gold area. (OS serves as the ground-handling agent for LO @ VIE.) Somewhat perturbed, I fluttered around the large check-in hall, searching for some anomalous distribution of the mob, all to no avail. I was quite convinced that, were I to wait at the shortest line available to me, some 20-30 minutes might easily elapse before I could check my bag. That would not do, given the constraint of baggage check-in cut-off time. And so I hopped to a kiosk, obtained my boarding pass, and dashed directly to the security check preceding the B30s bus gates, where I successfully passed through with my grossly oversized roll-aboard, over-sized liquids and all.

LO 228 was every bit as worthwhile as I’d anticipated. The load on the 9:40a push service was light – some 15-20 passengers on the 72-seat (+/-) aircraft, leading to speedy boarding of our ubiquitous Cobus tarmac bus. Boarding of the AT7 proceeded via the rear door – the only option on this type and its AT5 cousin – where one of the two F/As issued greetings and offered a selection of the day’s press, from which I grabbed the Puls Biznesu. (I don’t recall whether non- Polish language titles were available, and I was disappointed to see the Warsaw Business Journal, my usual pick, as out-of-stock, which is unfortunately a common situation in recent years.)

I’d be ensconced in 13D on this sector, a most fortunate choice for a trifecta of reasons. First, owing to the rear boarding and deplaning of the aircraft, rearward seats offer superior convenience, and row thirteen is the second-last row of economy. (Note that business class is the last two rows on most international services of this aircraft, occupying rows 15 and 16.) Second, the noise of the twin turboprop powerplants is considerably less pronounced and, furthermore, less bothersomely variable in shifts of frequency than is the case up front. (If that sounds a bit odd, your experience with turboprops is clearly limited; or you’ve been flying too much Business Class!) Finally, the herd instinct is invariably to book-up the forward seats, leaving the prime rearward seats not only desirable for their own sake, but also for the considerably greater likelihood of having empty seats all around for spreading out.

Our taxi commenced some minutes late, around 9:50a, and our Eurolot-operated aircraft was airborne around the top of the hour. From there, we proceeded along a relatively straight course to Krakow, bisecting the Czech Republic, itself covered by thick white cloud, and crossing into Poland not far from the city of Zywiec – incidentally, where I’d be heading after touching down at KRK. Clouds thinned somewhat over the Carpathian mountains and the Zalew Zywiecki, i.e. the lake just north of Zywiec, was dimly visible. Indeed, our aircraft flew almost directly overhead the dam that marks the apex of this most-recognizable geographic feature along the 200-odd mile flight path of the VIE-KRK sector.

Service onboard slightly exceeded expectations, the non-existent Warsaw Business Journal notwithstanding. An almond-topped muffin – plastic-wrapped though nonetheless substantive in size and acceptable in taste – was offered by the crew soon after take-off, an improvement over the sickly pieces of cheese and cured meat that I was expecting based on past experience. In the beverage service that followed shortly thereafter, I selected the usual combination for whenever I enjoy the good fortune of being a guest of LO, indeed, a duet that is only available on this very airline: black tea with a generous circular slice of fresh lemon (and I swear, they brew Lipton, admittedly a tea of the proletariat, though an unfailing brand when paired with fresh lemon), and blackcurrant juice. Mmmmm, I could go for both right now!

Descent began all-too-soon; normally, I’m quite impatient when travelling on the AT7, with its 500 kph cruise; but this 200-mile hop is wicked short, quite counter-intuitively given its over-flight of three countries. Snow flurries greeted our arrival at John Paul II International Airport, and I enjoyed further good fortune still by just catching the 11:16a departure of the ironically-christened “Airport Express” train to Krakow Glowny. In all, it was a grand morning: first impressions in Wien, a sensory symphony with LOT to that lovely country on the banks of the Wisla, and all in time to catch an early lunch in central Krakow.

Saturday, January 1, 2011

AA 757 runway overrun @ Jackson Hole; insightful PAX video provides clues

Jackson Hole, WY is a most interesting airport from the perspective of airline operations. A quick glance at forthcoming Friday flight schedules into the field (I checked Fri, Jan 14 and Fri, Feb 11) reveals a modest 9 scheduled operations, about the expected number for an airport catering only to a finite flow of skiers, but serving no sizeable business or residential community. Here is their (surprising) composition:

3 Delta flights from SLC (1 CR7, 2 319)
3 United flight from DEN (2 CR7, 1 319)
1 United flight from LAX (CR7)
1 United flight from ORD (757)
1 American flight from ORD (757).

The chief surprise: to have a regional airport served by a (admittedly narrow) majority of mainline aircraft -- JAC has 5 mainline flights and 4 regional ones. And two of the mainline flights are on relatively high-capacity Boeing 757s.

One of these 757s took a spill a few days ago: American's flight from Chicago failed to decelerate in sufficient time and subsequently suffered a runway overrun. Here's excellent coverage of the incident courtesy of the Aviation Herald.

And, the raison d' etre for this post is this: a vivid passenger video of the landing, complete with insightful post-incident commentary by a knowledgeable third-party.