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  • Proprietary Trading Weekly Market Recap For Friday, Dec. 6, 2013

    Stocks Notch Up Solid October

    October was a strong month for proprietary trading of stocks which ended the week on a positive although gains were muted. The S&P 500 index notched up a 4.46% gain in October which is one of the best on record. Historically October has produced negative returns for investors which makes this year all the more special.

    There were a number of high profile companies releasing earnings during the past week which were stronger than expected. Facebook released earning on Wednesday evening that knocked the cover off the ball. The stock price initially soared but comments from the CFO that discussed the flat trajectory of gaining new young users pushed the stock back toward unchanged. Apple released earnings earlier in the week which were also better than expected, but the stock price received little positive price action.

    Recent European economic data including very soft inflation data has reduced yields in the EU and fanned speculation that the ECB could cut interest rates when they meet next week. The yield differential has moved in favor of the greenback putting pressure on the Euro which has declined nearly 3 big figures in the last two trading sessions.

    The ECB is scheduled to meet next week on Thursday and already there are calls for an EU rate cut. The very low levels of inflation which were released during this week have created a deflationary environment which could handle additional stimulus. Although a cut in the refinance rate is unlikely the ECB will likely generate a dovish statement during their press conference which could ease some of the tension on the Euro. The ECB might also consider eliminating the penalty to banks for using the LTRO.

    The FOMC met this week and eliminated a line from there statement which focused on the fiscal brinkmanship which was taking place during their last meeting. Data in the US has been relatively weak but strong enough to attract capital given the recent softness in the EU data.

    Manufacturing data globally improved in October, as Chinese, Canadian and US numbers where stronger than expected. The Institute for Supply Management (ISM) said its index of U.S. factory activity rose to 56.4 last month from 56.2 in September, the best print since April 2011. Economists had expected a reading of 55. In Canada the manufacturing sector grew at the fastest pace in 30 months in October, according to the RBC Canadian Manufacturing Purchasing Managers' Index. The headline number rose to 55.6, up from 54.2 in September.

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    The Dow Industrial Average hit a new all-time high this week, but has not been able to convincingly push through the 15,700 area. Momentum has slowed while the RSI is printing near 61, which is the upper end of the neutral range. Visit proprietary trading training and day training courses for more educational resources.

    Dec 08 7:28 PM | Link | Comment!
  • Proprietary Trading Weekly Market Recap For Friday, Nov. 22, 2013

    Stock Notch up New All-time Highs

    The trajectory of stock prices over the past week follow the prior week move which saw a rally in the latter half of the week. Thursday was turnaround day for the US markets, notching up a solid rally which is poised to have the S&P 500 index hit a new all-time high. Stocks were led this week by small cap shares, as the Russell 200 surged nearly 1.8% on Thursday. Economic data released during the week in the US was mixed. Inflation data was subdued, as was the Philly Fed survey but the jobless claims report came in stronger than expected. For the week the S&P 500 index closed up 0.37% closing above 1,800 for the first time in its history.

    Mid-week the labor department released inflation data. Producer prices fell for a second straight month in October, according to the BLS. The producer price index declined 0.2 percent last month driven down by falling gasoline prices. On a year over year basis wholesale prices increased 0.3 percent after climbing by a similar number in September. Core producer prices which remove food and energy increased 0.2 percent in October.

    In October, the consumer price index declined 0.1 month over month after rising 0.2% in September. Economists had expected the CPI to remain unchanged. CPI printed at 1.0% year over year from September's 1.2% reading, which was in line with expectations. The core CPI, which excludes food and energy increased by 0.1% in October month over month, and the year over year in consumer inflation, was unchanged from September at 1.7.

    Jobless claims slipped 21,000 last week to 323,000, according to the Labor Department. That's the lowest level of weekly unemployment benefit applications since late September. Analysts were expecting jobless claims to fall to 335,000. The Labor Department reported that the four-week average fell 6,750 to 338,500. The four-week average has dropped for the third straight week.

    The financial sector of the US stock market has lagged behind the rest of the S&P 500 index during most of the 2013 rally. Financial have historically been a leader, but have not been able to capture the mantle until recently. With rates remaining very accommodative, and the shape of the yield curve continuing to steepen, financial are likely to be the leaders moving through the balance of 2013.

    (click to enlarge)

    Nov 25 11:11 AM | Link | Comment!
  • Proprietary Trading Weekly Market Recap For Friday, Nov. 15, 2013

    Equity markets regain their momentum in the latter part of the week, as the S&P 500 and the Dow Industrials notch up all-time highs. The Nasdaq surged higher later in the week, despite many of the momentum stocks facing headwinds. Janet Yellen testimony in front of the Senate banking committee was greeted with positive sentiment which helped equity bourses regain traction.

    Although technology shares had a mixed performance during the week, some of the benchmarks were under pressure. Cisco Systems (NASDAQ:CSCO) had a substantial decline on Thursday after the networking company released worse than expected earnings. After the closing bell on Wednesday Cisco reported their fiscal Q1 results. The company reported that revenue rose just 1.8%, compared with its projection of 3% to 5% growth. Cisco followed up by projecting a decline of 8% to 10% in the current period, an unusually downbeat forecast. Cisco tumbled nearly 11% on Thursday.

    Energy shares were under pressure during the week as crude oil prices tumbled to $93 per barrel. Prices could face additional headwinds according to a report from OPEC that touched on non-OPEC supply. On Tuesday the Organization of the Petroleum Exporting Countries said that non-OPEC countries would produce more oil than previously expected this year, while the International Energy Agency predicted that the U.S. may become the world's largest oil producer in the next couple of years.

    In its monthly report issued Tuesday, OPEC said it now expects producers outside of the organization to boost oil supply this year by an additional 35,000 barrels a day, with output expanding from the U.S. and Canada in the third quarter. OPEC boosted its global demand forecast by 34,000 barrels a day and projected that global demand for OPEC crude will decline by 300,000 barrels a day next year.

    The retail sector experience a mix of earnings results during the week with Macy's (NYSE:M) notching up solid gains, while Wal-Mart (NYSE:WMT) reported top and bottom line numbers that were worse than expected. For the three months ended November. 2, 2013 Macy's profit rose to $177 million, or 47 cents a share, from $145 million, or 36 cents a share, a year earlier. Revenue increased 3.3% to $6.28 billion. Analyst's survey had expected earnings of 39 cents and revenue of $6.19 billion.

    Stocks were also buoyed by a strong performance in Asian shares. The Nikkei jumped on Friday more than 2% and notched up a 7% rally for the week. The Shanghai surged on Friday, closing up more than 2%.

    Nov 17 11:00 AM | Link | Comment!
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