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Orders and shipments for non-military capital goods excluding aircraft climbed in June, signaling investment by U.S. businesses picked up heading into the second half of the year.
Such bookings increased 0.6 percent after jumping 4.6 percent in May, more than previously reported, figures from the Commerce Department showed today in Washington. Total orders for durable goods, those meant to last at least three years, unexpectedly dropped 1 percent, depressed by a decrease in demand for aircraft which is often volatile.Eaton Corp. is among manufacturers benefiting from a pickup in demand as companies in the U.S. and abroad update equipment that is helping to support the recovery. The gains will partially compensate for a slowdown in consumer spending that is causing the world’s largest economy to cool heading into the second half of the year.
“Businesses are, in general, still investing,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who projected a decline in durable goods orders excluding transportation. “If they want to compete, they have to invest. The recovery is continuing.”
Stock-index futures dropped after the report showed weakness in overall orders. The contract on the Standard & Poor’s 500 Index fell 0.2 percent to 1,108.6 at 8:56 a.m. Treasury securities rose, pushing the yield on the benchmark 10-year note down to 3.04 percent from 3.05 percent late yesterday.
url: http://www.smbtraining.com/blog/traders-ask-determining-your-stop
Dear Bella,
Where would your stop loss be for the lot you added when the sellers won at 76? More importantly, how does one determine the right spot to place your stop loss or your “line in the sand”, so to speak?
I also traded BIDU today and I had 76.50 and 76.00 marked as key levels. I missed my short at 76.50 and I was waiting for another short trade if the stock gets below 76. More specifically, I was waiting for sellers to come in and hold the offers at or below 76 to get short. I would get out if the stock trades gets above 76.00. If the stock trades in my favor, then I will exit only if I see a Reason to Cover. At least, that was my OGT. When the sellers initially won the battle at 76, the stock traded down to around 75.20ish but then got back above 76 again, and I exited for a loss, as per my trading plan.
I took the SMB Foundation program a couple of months ago, and as I recall, I was trained to exit whenever the level I’m leaning on is violated. I realize that simply hitting/paying whenever a level is violated can lead to shakeouts pretty often, so I’m working on giving my trades some breathing room. The question is, how do I determine how much room to give my stocks to avoid getting shaken out while at the same time, protect myself against large losses?
Bella Responds:
These are the plays to master. After the close these trades that work best must receive most of our attention. We must review them and find places to add size while controlling our risk. So I love how you are reaching out to me about this set up. Because this is one that will pay the bills.
We are all different. We have different buying power and trading experience. A different tolerance for pain. We process information differently. The set ups that make the most sense to us, our A trades, our different.
For me the add at 76, had a stop of half above 30c and the the rest if BIDU held above 76.50, since this was the important long term technical resistance level (or right above 50c if it didn’t look like it would hold there on the tape).
But the key to this exercise is for you to go back and determine the best stop for you. I was holding until the next significant technical support area. Your play might have been a shorter time frame. If so your stop might have been tighter.
The euro’s biggest rally in a year is threatening exporters in Europe’s weakest economies as they grow more reliant on international sales for growth.
The 9.5 percent gain to $1.3008 from a four-year low on June 7 reduced speculation that the region’s debt crisis would break up the single currency. At the same time, the head of Spain’s Exporters Club says the stronger euro will make it harder to counter a “paralyzed” domestic market. European Aeronautic, Defence & Space Co., the maker of Airbus planes, says at $1.20, the currency still wouldn’t be weak. Salvatore Ferragamo SpA says it’s counting on exports to boost sales as austerity measures crimp demand from France to Italy.
Even after declining 14 percent during the past eight months as mounting deficits threatened the region’s economic recovery, the euro remains stronger than the $1.184 average since its introduction in 1999. The currency is overvalued by 14 percent, according to purchasing power data compiled by Bloomberg. Foreign-exchange strategists say the result will be a weaker euro.
“If the euro continues to appreciate it would be a disaster for the euro zone,” said Ken Wattret, chief euro-area economist at BNP Paribas SA in London. “The worst-case scenario for the euro area is you have a sustained exchange-rate appreciation because it would snuff out the recovery.”
The euro advanced 2.29 percent last week, the biggest gain since May 2009, to $1.2930. It traded 0.4 percent stronger at $1.2979 as of 3:28 p.m. in London.
The yen weakened on concern efforts to cut Japan’s government debt will slow after the ruling party lost control of the upper house. Most Asian stocks rose, led by Japanese exporters and commodity producers.
The yen weakened against all 16 of its most-active counterparts at 2:17 p.m. in Tokyo, to 112.16 per euro from 112.01 in New York on July 9. The MSCI Asia Pacific Index was little changed. Standard & Poor’s 500 Index futures fell 0.3 percent. Copper retreated following a 5.5 percent gain last week.
The Democratic Party of Japan won 44 seats in the upper house, less than the main opposition’s 51 seats, making it unlikely Prime Minister Naoto Kan will be able to reduce the world’s largest public debt. Most Asian stocks rose ahead of the start of the U.S. second-quarter earnings season, with S&P 500 companies projected to post profit gains of 34 percent, according to analysts’ estimates compiled by Bloomberg.
“Earnings are the key but it’s going to be very company specific,” Curtis Freeze, chairman of Honolulu-based Prospect Asset Management Inc. with about $1 billion in assets, said in a Bloomberg Television interview. “The yen could actually weaken because there’s going to continued spending by the government and there’s going to be a delay in the consumption tax hike.”
Almost five stocks rose for every four that fell among the MSCI index’s 985 members, with a measure tracking materials stocks accounting for the biggest advance among 10 industry groups. The Nikkei 225 Stock Average fluctuated between gains and losses. China’s Shanghai Composite Index rose 0.7 percent as speculation the government will relax curbs on mortgage lending amid a slowdown in property prices drove gains in developers.
More Americans unexpectedly applied for jobless benefits last week, a sign the labor market recovery may be slowing.
Initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance rose, while those getting emergency benefits dropped after Congress failed to act on extending the legislation.
The jump in applications raises the risk that the turmoil in financial markets brought onby the European debt crisis is leading to additional cutbacks in staff. The Labor Department tomorrow may report the U.S. lost jobs in June for the first month this year, reflecting a drop in temporary federal workers who helped to conduct the decennial census.
“The labor market is not generating employment for anyone, even for people who have been out a long time,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York, who forecast claims at 470,000. “What we’re seeing in the backup of claims is not a particularly healthy story, showing we can’t generate upside momentum in the labor market.”
Economists forecast jobless applications would fall to 455,000 from an initially reported 457,000 for the prior week, according to the median of 46 projections in a Bloomberg survey. Estimates ranged from 440,000 to 475,000.
