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.