News: GDP Final for Q4 = 5.6%
The Commerce Department reported Friday that the economy grew at a 5.6 percent pace in the October-to-December quarter in its third and final estimate of economic activity during the period.
About two-thirds of the growth in GDP in the fourth quarter was accounted for by changes in inventories, not by final sales. Businesses had been reducing their overstocks at the fastest pace in generations earlier in the year, and then sharply slowed the pace of reductions in the fourth quarter. The change in inventories accounted for most of the fourth-quarter growth.
For the current quarter, which ends next week, economists are forecasting a slowdown to 2.8% annualized growth. They expect growth will be more balanced than in the fourth quarter, with a larger contribution from sales and less from the inventory adjustment.
For all of 2009, GDP fell 2.4%.
Source: MarketWatch.com
Trading Lesson
Every so often (or you could say when I'm lazy or my report is missing actual content..)
I will add fun trading lessons DIRECTLY FROM MY TRADING JOURNAL.
If you don't really care about a real trader who worked close to the NYSE then skip ahead to the technicals part. The writing below is informal.
Location : 5 minutes from the NYSE Exchange
Where: Private equity fund.
When: 2008
'Does anyone smoke' -
Only 1 person raised their hand.
This was the first question my trading boss told our group. At the time I was unsure WHY, but today, I know WHY.
He then went on to say
'Don't worry, by the end of the year, half of you guys will pick up smoking.. That is the market for you'
At the time I was thnking about what my boss told me, and I really thought he was kidding.
At the end of my work-term, I actually considered it.
Why?
The market is a bully.
The market does not care what race you are, what buying power you have, if your the nicest person in the world, he will beat you to the ground...
It is your responsibility to put up a fight. IMO, the best way to fight with mr. market is to RUN. As a young kid, I hated standing up for myself when I got bullied.. why? because I could get hurt.. and I'm a very sensitive guy.. so I loved to run. I apply the same concepts in trading.
Ok, so call me a wuss, but it's not being a wuss if you just decide to not trade when things are not going your way.. it takes courage. The market cannot bully you if your flat.
You essentially have two options when the market is going against you.
- Run, and leave the FIGHT with a couple of bruises and your bank account will be moderately damanged
OR
- Fight, and potentially leave the fight with two black eyes and a broken leg, and a depleted bank acconut since you'll have to pay for surgery.
(okay dumb analogy.. I know!)
Fighting the market is: Averaging Down, Being Overly/Positioned Biased in one direction for no real apparent reason (when your short.. most of us are soo certain that the market is going to drop).. the best I advice I can say to you is that when the market is just not going your way--just leave the trade.
My Sentiment: A reversal can occur at any time as long as the $3.93-$4.00 area holds as support.
ROC (-11) : Sell Signal Still in Effect
MACD (-): Sell signal still in effect
ADX 45+: The bearish trend is Overextended.
ADX>45 = Overextended Trend
ADX 20-45 = Defined Trend
ADX<20 No trend
Ultimately, a good trade would be to go long UNG with 2.5% stops.. (this trade is a counter-trade so you have a much higher probability of being stopped out.. and also I am never short/long any natural gas into Thursday's NGI report).
Next Support Level: $3.93-4.00 & $3.60-$3.65
Next Resistance Levels/Targets (Optimal Short Entries): $4.45-4.50 [w/stops]
Please see last week's report (mar 19th) for the weekly chart. My view of the long-term trend does not change.. IMO, it is pointless to make an updated chart to account for a single new candlestick [The nature of weekly indicators is that it ignores intraday noice-as opposed to day charts-. It it best to make a daily chart up (which I did above). I hope you understand.
COTs will be talked about on friday night/saturday morning.
