Home > July 2012 > Trading Diary July 6th, 2012, Fifth day of Iran Embargo and NFP

Trading Diary July 6th, 2012, Fifth day of Iran Embargo and NFP

July 6th, 2012
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German 2 yr  went into Neg Yield. Shanghai comp had a strange day, with most of the day down with a rally into the close, shanghai futures down a tad. Start of the europe session and we have down open with eur/usd at 1.2373 and AUD/USD at 1.0257. Monti passed 4.5 billion of Italian  Budget cuts. Brent Oil is under that key 100, at 99.66 and Oil at  at 86.07.. AND SPIT, SPX futures is at 1359ish,lol, that darn 1360ish support level. For NFP 100K is what most are looking for.

July 2012

  • Trading_Nymph

    For NYSE advance-decline volume we are in a upside bias but are forming a downtrend line. For tomorrow it is SUPER easy for the market to drop and very hard to rally. Support is a mere -83,000,000 while resistance is 477,000,000 which is really tough on this low volume week. So no matter what the NFP is, the market favors a move down.

  • Trading_Nymph

    China is cutting Refinery…POLL-Asian refiners to pare output on poor margins, low demand

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    Tue Jul 3, 2012 12:35pm IST* Poor margins, low demand force refiners to reduce runs* Steepest prediction is for fall to 70 percent of capacity* Most cite surprise China slowdown as key factor for run cutsBy Meeyoung Cho and Manash GoswamiSINGAPORE, July 3 (Reuters) – Asian refiners are set to lower operations further in the second half of the year as a slowdown in demand from China slashes profits from processing a barrel of crude into fuels in a market already suffering from sliding consumption in the West.Paring runs would put further pressure on oil prices, which have already slumped more than a quarter to $98 a barrel on Wednesday since their highs of over $128 in March.Investors had bet on China to drive oil demand growth as the faltering economic outlook in the West reduces energy usage. But a surprise slowdown in the world’s second-largest oil consumer has forced many to temper this expectation.A Reuters poll of 10 refiners, banks and analysts showed that all forecast a fall in refinery runs in Asia in the second half. The steepest prediction is for operations to slide to an average 70 percent of capacity, with most others expecting them to be around 80 percent from about 85 percent now.”The economic slowdown has prompted refiners to cut runs in all regions,” said David Wech, head of research at JBC Energy in Vienna. “We see Asian refinery utilisation averaging at just above 80 percent in 2012, down by almost 2 percentage points year on year.”A majority of those polled cite the impact a widening debt crisis in Europe is having on China’s economy, saying the situation is worse than what most had expected.China’s slowing consumption is barely expected to offset falling demand in developed economies, lowering global oil demand growth to the slowest pace this year since the financial crisis, a separate poll by Reuters last week showed.That poll showed global demand is expected to grow by 900,000 barrels per day (bpd) this year to 89.8 million bpd, down from an average estimate of 1 million bpd in January.China’s apparent oil demand rose 0.8 percent from a year earlier to 9.38 million bpd in May and was up 0.9 percent versus April, when the figure fell for the first time in more than three years, Reuters calculations from official data showed.CHINA DEMANDThe weak May demand figure was in part a result of lacklustre refinery operations. China’s refinery throughput in May fell 0.7 percent from a year ago, marking the second straight month of decline as the world’s second-largest economy slows.”Third quarter and fourth quarter refining margins will be down from wherever they are in second quarter,” said Sushant Gupta of energy consultancy firm Wood Mackenzie.”The general economic outlook for Europe is still poor and China is showing a slowdown.”Asian refining margins were at $4.75 a barrel on July 2, compared with an average of $5.32 a barrel for the last five days and $7.36 for the last 12 months.Average profits from processing a barrel of crude into products in the past 12 months weakened the most in December to $5.05 a barrel from a high of $9.44 in October.For this year, profits were the highest in January at $8.80 and have successively declined in each month, barring a recovery in April to $7.84.WEAK NAPHTHAA key reason for the fall in refining profits is the decline in income from producing naphtha, the poll showed. Naphtha, used for producing raw materials to make plastics, has suffered because a weak global economy and ample petrochemical supplies have forced plants to pare runs.”The lacklustre light distillate market is also persuading refiners to cut runs at this point in time,” said Wech of JBC Energy.Naphtha margins stood at $51.10 a tonne premium on July 2, less than half the average value of $114.03 a tonne for so far this year. It fell to a low of $3.20 a tonne premium on June 13 as petrochemical makers held back naphtha purchases as the European debt crisis crimped consumer demand.Increase in refining capacity in the region is another factor weighing on margins, the poll showed. China alone is expected to bring 350,000 bpd of capacity online this year, in addition to 360,000 bpd added last year.

  • Trading_Nymph

    If we want to game China CPI data, we look at hog prices…from the pig site..Pig Prices Rebound After Govt Increases Reserves26 June 2012

    CHINA – The central government’s move to boost pork reserves has taken effect, and prices of live pigs have risen recently after continuous declines over the past four months, China’s top economic planner said.
    The country’s average farm-gate price for pigs rose to 14.08 yuan ($2.21) per kilogram on 13 June, up 1.01 per cent from a week ago, after experiencing a continuous drop in the previous four months, the National Development and Reform Commission (NDRC) said in a statement.After the pig-to-corn price ratio had fallen below 6 to 1, the break-even point for pig farmers, for four consecutive weeks, the NDRC started State procurement of frozen pork from the market in May to increase national reserves and protect farmers against market volatility.The commission said there is still a problem of overcapacity in the pig breeding industry, and advised farmers to reduce stocks of fertile sows.Farmers increased their pig stocks in 2011 when pork prices surged, which drove up supplies and pushed pork prices down this year, industry experts said yesterday.”Pig prices will rise further in the third quarter, as their death rate in the summer heat is usually high,” Ji Guangxin, an analyst at Sublime China information, a Shandong-based commodity information provider, told the Global Times.”Most pig farmers lost money in the first five months of this year, but the rising prices will improve their profit margins,” Dr Guangxin said.Meanwhile, retail prices of pork in China’s 50 biggest cities have also begun to rise since 10 June, the first rise since February, figures from the National Bureau of Statistics showed Sunday.”Pork prices, which make up a large part of food prices in China, will continue to rise and may push inflation up in coming months,” Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultants, told the Global Times. The country’s consumer inflation eased to 3.0 per cent in May from 3.4 per cent in April.Despite price fluctuations, the pig breeding industry has attracted some big companies and investors.Wuhan Iron & Steel Corp unveiled a pig-raising plan in March. The State-owned COFCO Trust Co also released a pork industry financial product in May and so far has raised 15 million yuan. The money will be invested in breeding pigs in Dongtai, Jiangsu Province, and investors’ returns will depend on pork prices in the future.”Big companies’ participation will make the pig breeding industry more consolidated, and the price fluctuations will become less severe,” Dr Wenfeng said.

    ThePigSite News Desk

  • Trading_Nymph

    NFP…Really really bad or really really good could cause a rally. But because the Fed doesn’t meet until Aug it may not be the big mover if either of these appear. BUT a inline or slight up or down could really move this market down.

  • Trading_Nymph

    Amazon is making a Smart Phone to go against AAPL.

  • sub

    hi TN, when you get a chance , can you recommend a practice trading [free ]web site for  rookie…..no hurry thanks ..waiting for a job number .unreal

  • http://pulse.yahoo.com/_BYIE4IB7HKSGYHBPVW6MT4DEIE Iron

    Yesterday’s Market Cap/GDP ratio was 95.4%.  That would give you a 4.1% yearly return expectation over a ten year time frame.  Not very juicy.
    Today is getting better…..but we have a long way to go before a dart throwing monkey (the average investor) can make money in this market.

  • spit

    yikes,wheres TN

  • Trading_Nymph

    Sub, For a free site, One of my Great Teachers was Harry Boxer and he gives a 15 day free trial of his Trading Diary. http://www.thetechtrader.com/ Quick story about Harry Boxer. I met him at the Trading Expo in 2007/2008 at a seminar and I realized I met a fellow junkie when we rolled our eyes at the sametime. He turned out to be a lecturer and told me I should go check him out. OMG he was all Technical and I was all Fundie but we were coming up with the same stocks. I IN FACT got him to start a interactive chat thru out the day on his website because I told him that I would not join his site unless he did. He was the person who told me to read MeGee and Edwards. When he started his chat room it was just mostly me and him talking thru out the day, He taught me so much regarding Technical. Yet, I drove him crazy because I wanted to know why it was moving, not just that it was. After I could “think like Harry”, I decided to go start my own Trading Diary so I could grow on what Harry taught me but to also to develope my own trading style that was inside of me. Harry Boxer does straight T/A McGee and Edwards style and is a amazing trend follower..he has a uncanny instinct from all the years that he has been doing this in getting in and out of a stock..plus he is a amazing Person.

  • Trading_Nymph

    OK I got Eur/USD at 1.2284 and Aud/USD 1.0196..Oil is down to 84.85 and Brent is 98.44

  • Trading_Nymph

    Here I am, I saw the Jobs data hit and knew my SPX 1360 was taken out and rolled over to catch up on Sleep.

  • Trading_Nymph

    Iron, Very good point. Do you do the ratios yourself daily or is their a website that does the math for you?

  • http://pulse.yahoo.com/_BYIE4IB7HKSGYHBPVW6MT4DEIE Iron
  • spit

    thanks so much for the  link TN..

  • Trading_Nymph

    SPX 1342.66ish is next stop for support.

  • Drfunk

    Why does ADP miss so much. Why did people really think we would have 175000. Really would make no sense with rising initial claims falling pmis. Even goldman revised last minute. Stupid

  • Trading_Nymph

    Dennis Gartman indicated that Dr. Copper must be confirmed by Prof Tin, Prof AL and Prof Zinc….at this point we have Dr. Copper, Prof Al and Prof Zinc testing neckline of third shoulder on the 5 year charts and Prof Zinc retested 08 highs and broke thru them over the past few years then went down and retested the 08 highs again and are falling, also testing key support http://www.indexmundi.com/commodities/?commodity=tin&months=60

  • Trading_Nymph

    Dr Funk, NFP data is one of the silliest data points we have and I am amazed on why everyone puts so much power behind it. A good portion of it is made up of “Phone Surveys”, and my thought is that if you lost your job, you may have lost your home and therefore your phone or the unemployed are the only ones home to answer the phone. Plus, with everyone getting away from landlines and going to cell you also have such a huge error rate. Haven’t you notice the HUGE revisions we can get in NFP month after month. I like Challenger Report better then ADP and many times they are on the opposite side on data, we also have the Monster numbers. That is why I call it the NFP guessing game in the week leading to NFP with the ADP/Challenger/Monster numbers…but even with all the data, NFP is a random hat trick to read and I would not trust anyone that thinks they can guess the number. IMHO, we are in a computer age, we really should rethink data collection methods in both NFP and LIBOR.

  • Trading_Nymph

    See Dr. Funk, The NFP is made up of the Household survey and Biz Data, its the Household survey is 60,000 phone surveys…and that is the problem with it imho. ..from the website..This news release presents statistics from two major surveys, the
    Current Population Survey (CPS; household survey) and the Current Employment
    Statistics survey (CES; establishment survey). The household survey provides
    information on the labor force, employment, and unemployment that appears
    in the “A” tables, marked HOUSEHOLD DATA. It is a sample survey of about
    60,000 eligible households conducted by the U.S. Census Bureau for the U.S.
    Bureau of Labor Statistics (BLS).

       The establishment survey provides information on employment, hours,
    and earnings of employees on nonfarm payrolls; the data appear in the
    “B” tables, marked ESTABLISHMENT DATA. BLS collects these data each
    month from the payroll records of a sample of nonagricultural business
    establishments. Each month the CES program surveys about 141,000 businesses
    and government agencies, representing approximately 486,000 individual worksites,
    in order to provide detailed industry data on employment, hours, and earnings of
    workers on nonfarm payrolls. The active sample includes approximately one-third
    of all nonfarm payroll employees.

       For both surveys, the data for a given month relate to a particular week
    or pay period. In the household survey, the reference period is generally
    the calendar week that contains the 12th day of the month. In the establishment
    survey, the reference period is the pay period including the 12th, which
    may or may not correspond directly to the calendar week.

  • Trading_Nymph

    And talking about crazy reports, here is ours. BUT the most important part to me is that April’s number was revisited down again this month, YET May was revisited up (which we expected with the big surprised drop)…yet April being down again with additional data points is not good….our NFP that missed…  THE EMPLOYMENT SITUATION — JUNE 2012

    Nonfarm payroll employment continued to edge up in June (+80,000), and the
    unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor
    Statistics reported today. Professional and business services added jobs,
    and employment in other major industries changed little over the month.

    Household Survey Data

    The number of unemployed persons (12.7 million) was essentially unchanged
    in June, and the unemployment rate held at 8.2 percent. (See table A-1.)

    Among the major worker groups, the unemployment rate for blacks (14.4 percent)
    edged up over the month, while the rates for adult men (7.8 percent),
    adult women (7.4 percent), teenagers (23.7 percent), whites (7.4 percent),
    and Hispanics (11.0 percent) showed little or no change. The jobless rate
    for Asians was 6.3 percent in June (not seasonally adjusted), little changed
    from a year earlier. (See tables A-1, A-2, and A-3.)

    In June, the number of long-term unemployed (those jobless for 27 weeks
    and over) was essentially unchanged at 5.4 million. These individuals
    accounted for 41.9 percent of the unemployed. (See table A-12.)

    Both the civilian labor force participation rate and the employment-
    population ratio were unchanged in June at 63.8 and 58.6 percent,
    respectively. (See table A-1.)

    The number of persons employed part time for economic reasons (sometimes
    referred to as involuntary part-time workers) was essentially unchanged at
    8.2 million. These individuals were working part time because their hours
    had been cut back or because they were unable to find a full-time job.
    (See table A-8.)

    In June, 2.5 million persons were marginally attached to the labor force,
    down from 2.7 million a year earlier. (These data are not seasonally
    adjusted.) These individuals were not in the labor force, wanted and were
    available for work, and had looked for a job sometime in the prior 12
    months. They were not counted as unemployed because they had not searched
    for work in the 4 weeks preceding the survey. (See table A-16.)

    Among the marginally attached, there were 821,000 discouraged workers
    in June, a decline of 161,000 from a year earlier. (These data are not
    seasonally adjusted.) Discouraged workers are persons not currently
    looking for work because they believe no jobs are available for them.
    The remaining 1.7 million persons marginally attached to the labor
    force in June had not searched for work in the 4 weeks preceding the
    survey for reasons such as school attendance or family responsibilities.
    (See table A-16.)

    Establishment Survey Data

    Total nonfarm payroll employment continued to edge up in June (+80,000).
    In the second quarter, employment growth averaged 75,000 per month,
    compared with an average monthly gain of 226,000 for the first quarter of
    the year. Slower job growth in the second quarter occurred in most major
    industries. (See table B-1.)

    Professional and business services added 47,000 jobs in June, with temporary
    help services accounting for 25,000 of the increase. Employment also rose
    in management and technical consulting services (+9,000) and in computer
    systems design and related services (+7,000). Employment in professional
    and business services has grown by 1.5 million since its most recent low
    point in September 2009.

    Employment in manufacturing continued to edge up in June (+11,000).
    Growth in the second quarter averaged 10,000 per month, compared with
    an average of 41,000 per month during the first quarter. In June,
    employment increased in motor vehicles and parts (+7,000) and in
    fabricated metal products (+5,000).

    Employment continued to trend up in health care (+13,000) and wholesale
    trade (+9,000) in June.

    Employment in other major industries, including mining and logging,
    construction, retail trade, transportation and warehousing, financial
    activities, leisure and hospitality, and government, showed little or
    no change.

    The average workweek for all employees on private nonfarm payrolls
    edged up by 0.1 hour to 34.5 hours in June. The manufacturing workweek
    edged up by 0.1 hour to 40.7 hours, and factory overtime was 3.3 hours
    for the fifth consecutive month. The average workweek for production and
    nonsupervisory employees on private nonfarm payrolls edged up by 0.1
    hour to 33.8 hours. (See tables B-2 and B-7.)

    In June, average hourly earnings for all employees on private nonfarm
    payrolls increased by 6 cents to $23.50. Over the year, average hourly
    earnings have increased by 2.0 percent. In June, average hourly earnings
    of private-sector production and nonsupervisory employees increased by
    5 cents to $19.74. (See tables B-3 and B-8.)

    The change in total nonfarm payroll employment for April was revised
    from +77,000 to +68,000, and the change for May was revised from
    +69,000 to +77,000.

  • Trading_Nymph

    His Daily free Chart of the Day Vids give you his analysis style, its like our own Great Miss Him Shawn’s style. http://www.thetechtrader.com/chartsoftheday/

  • Trading_Nymph

    Iron, We now have the link in the blogroll to the right under Market Cap/GDP…btw figures it would be at one of your fav sites. :-)

  • Trading_Nymph

    Iron…I decided not to cruise the Atlantic to europe, too many people are telling me that the seasickness is not worth it at all. So I am thinking to fly to Dublin in early Feb 2013,  take the Ferry to the UK and Ryanair to Rome for Carnival/Marti Gra and Ash Wednesday, then fly back to Dublin to LA….it would be my first time to europe..do you think this is a good plan, or would you suggest and different route?? Paris?? Germany??

  • Trading_Nymph

    And of course, as soon as I get a nice sell off the WSJ has to run one of those “rumor pieces about QE”, last months Rumor took 3 days before it ran out of gas…I wish WSJ would stop this. http://online.wsj.com/article/SB10001424052702303684004577510992826135390.html?mod=WSJ_hpp_LEFTTopStories

  • Trading_Nymph

    End of the US session and the week, eur/usd at 1.2286 and AUD/USD at 1.0188..VXX closed red. Looks like monday we could see a rally attempt…we will see…have a great weekend guys!!!

  • Trading_Nymph

    This guy on Bloomberg…I like his analysis…Jason Schechter

    Global Head of CLO Trading and Co-Head of CLO Origination
    UBS

    Jason Schechter joined
    UBS in 2011 as the Global Head of CLO Trading and the Co-Head of CLO
    Origination. Prior to UBS, Jason was the Head of CLO Trading at Barclays Capital
    and the Global Head of CLO Trading and US Head of Origination/Structuring at
    Lehman Brothers since 1999. Jason has also spent time at Morgan Stanley and
    Greenwich Capital. He holds a BS in Operations Research and Industrial
    Engineering from Cornell University and an MBA from the University of North
    Carolina at Chapel Hill.

  • spit

    TN…What an effort , you bring it …

  • Trading_Nymph

    Spit…You know I just love this stuff, so no effort at all. ((Spit))