TRADING TIP 5-7 RUNNING LOSERS KILLS EXPLAIN THIS TRADING TIP: HOW DO YOU USE THIS TRADING TIP IN PRACTICE? WORKBOOK QUESTION: Should you ever widen your initial stop-loss?TRADING TIP 5-8 BE CAREFUL OF THE FIRST PROFIT WARNINGS IN A WEL STOCK - THEY OFTEN COME IN 3S EXPLAIN THIS TRADING TIP: HOW DO YOU USE THIS TRADING TIP IN PRACTIC! WORKBOOK QUESTION: Does management usually communicate bad news 4 soon as they find out about it? Or will they try to fix the situation first?TRADING TIP 5-9 EXPECT ARMAGEDDON BUT DO NOT BET ON IT! EXPLAIN THIS TRADING TIP: HOW DO YOU USE THIS TRADING TIP IN PRACTIC! WORKBOOK EXERCISE: What are some examples of typical “Armageddon events?Summary Lex’s Tips - Step 5: Risk Management *+ Keep on top of the reasons for your trade. + Keep on top of the statistics. + You have to be in it to win it I. + Size correctly. + tis all about supply and demand. + Do not have a position over earnings + Running losers kills. + Be careful of the first profit warning in a well-liked stock — they often come in 3s. + Expect Armageddon but don’t bet on it!Lex’s Trading Screen > A trader spend most of his/her time behind screens so it is essential to have the right information in front of you. >» My trading screen is subdivided in three main sections: 1. Position management system: This part of the screen shows me the profits and loss for each position and helps me understand and track the risk in my portfolio. Your broker will probably provide this for you. 2. News services: This part of the screen, as the name indicates, keeps me on top of the news, These services include Reuters, Bloomberg, Dow Jones and ‘Twitter. I also check other websites such as the Wall Street Journal and the Financial Times. Here are a few links that you might find useful as well. Of course there are plenty of others! Bloomberg...nnsninnnssnnnesevons https www. bloomberg.com! ‘The Walll Street Journal hutp://online.wsj.com! Financial Times..... sve tips veww. ft.com! FT Alphaville. ‘htip:/ftalphaville.ft.com/ The Hill eee ‘The Trading Deck (Marketwatch) http://www. marketwatch.coni/trading-deck . hitpz//thehill,com/ Digitimes daily IT news. hutp://www.digitimes.com/index.asp CME nsntnneinennnnnnnvnsn MttpeWWW.enet.cOm Zerohedge... http://www.zerohedge.com! Seekingalpha nnn . http://seekingalpha.com/ BusinessInsider hitp:/"businessinsider.com! 3. Real-time market data: This helps me stay on top of the events in the world, ie Nowadays everything is correlated so itis important to have information and data about different asset classes such as stocks, currencies, commodities and the economy. In this module we will primarily focus on the third section of my trading screen: real-time market data. This section can be subdivided into three main groups: price data, survey data and derived data, WORKBOOK QUESTION: What are the benefits of a good trading screen? WORKBOOK QUESTION: Is a good trading screen static? WORKBOOK QUESTIO! Does everybody need the same trading sereen?Lex’s Trading Screen: Price data INTRODUCTION + Price data is based on actual transactions and is measurable. = The price data traders look at, changes over time: today they might focus on data from China, tomorrow India might be more relevant for world growth. We will look at © Country indexes © Sector indexes © Style indexes © Currencies © Interest rates © Commodities 0 Other price dataCOUNTRY INDEXE: us: = S&P 500 i i bntp:/www: bloomberg com/quote/SPX:IND = Nasdag Composite btp:/www bloomberg com/quote/CCMP:IND Asia: = Nikkei 225 (Japan) bp: www bloomberg. com/quote/NKY-IND = Shanghai Composite (China) bntp:/www. bloomberg. com/quote/SHCOMP:IND Europe: = EuroStoxx 50 (Buro-zone) bnutp:/www bloomberg com/quote/SXSEUND = PTSE100 (UK) btp:/www bloomberg. com/quote/UKX-IND Thave decided to use Bloomberg.com here. I could as easily have chosen Reuters or Google or Yahoo or many other sites. This is not a recommendation to use Bloomberg, Appendix A has a broader list of different countries and their stock market indexes, RELATIVE PERFORMANCES 2011 - 2012 S&P 500: White Nikkei 225: Red Shanghai Composite: Purple Appendix B shows you how (o calculate relative performances yourself. WORKBOOK QUESTION: Why would you look at absolute and relative performances of country indexes? WORKBOOK QUESTION: Which country indexes have done the best and which ones the worst over the past year? aSECTOR INDEXES The semiconductor sector gives a good indication of industrial activity and consumer demand. Semiconductor sector ETF btp:/www bloom .com/quote/SMH-US The financial sector gives a good indication of the overall economy. If banks are weak and cannot lend money, companies will find it more difficult to grow. + Financial sector ETF btp:/www bloom! -g.com/quote/XLF:US The healtheare sector gives a good indication of what is called the defensive part of the economy. Unfortunately people will always need medication, = Healthcare sector ETF Intp:/www bloomberg comifquote/XLV:US For a broader list of ETF’s on different sectors please go to Appendix C. SECTOR ETF’s VERSUS S&P 500 ETF 2012 Semiconductors: White Financials: Yellow Healthcare: Green S&P 500: Purple WORKBOOK QUESTION: Why would you look at the performance of different sectors? WORKBOOK QUESTION: If people are short financials and short semiconductors and long healthcare, what does that tell you about their perception on the health of the economy? WORKBOOK QUESTION: What are the biggest sector weights in the DAX and the x FTSE? How about the Hang Seng? 3Style Indexes In this section we will look at three different style indexes. They are: 1) Market Capitalisation 2) Value & Growth 3 idend1) Market Capitalisati = S&P SOD ETE (SPY) veces http://www. bloomberg com/quote/SPY:US + Russell 2000 ETF (IWM) vans bitp/wnw: bloomberg com/quoteWM-US WORKBOOK QUESTION: What is market capitalisation? How do you calculate it? WORKBOOK QUESTION: What market cap do people prefer to own when the economy is doing well? WORKBOOK QUESTION: If the SPY is holding or selling off slightly but the IVM is selling off massively, what does this show you? Would your answer change if the SPY is holding or going up slightly and the IWM is rallying to the upside?2) Value & Growth Reminder of 5-Step-Trading®: The price earnings (P/E) ratio is a method of estimating the value of a company. It tells you how many times earnings the stock is selling for in the stock market. = Value ETF (VTV) bitp:/www bloom .com/quote/VTV:US The VTV ETF tracks the MSCI US Prime Market Value Index. The attributes used for its construction are: Book value to price ratio. 12-month forward earings to price ratio. Dividend yield. = Growth ETF (VUG) eenseene —_ https/www bloomberg. com/quate/VUG:US The VUG ETF tracks the MSCI US Prime Market Growth Index. The attributes used for its construction are: ~ Long-term forward earnings per share growth rate - Short-term forward earnings per share growth rate. - Current Internal Growth Rate. - Long-term historical earnings per share growth trend. - Long-term historical sales per share growth trend, WORKBOOK QUESTION: When markets are nervous which one of these two ETFs should perform best?3) Dividend # Dividend ETF (SDY) vennneee _ hitps/www.bloomberg.com/quote/SDY:US The SDY ETF tracks the S&P High Yield Dividend Aristocrats Index. This index tracks the performance of companies within the S&P Composite 1500 that have consistently increased their dividends every year for at least 20 years, WORKBOOK QUESTION: When will the SDY perform best? STYLE INDEXES 2012 Large caps: yellow ‘Small eaps: white Value: green Growth: purple Dividend: red WORKBOOK QUESTION: Which ETF has done better than the general market over this period of time? :STION: Which conclusions can you derive from this chart? = WORKBOOK QUES TON: Can you see any unexpected relationship in this chart?CURRENCIES = Yen ‘nip://www bloomberg. com quote USDIPY:CUR = Brazilian real hup:iAvww.bloomberg.com/quote/BRLUSD:CUR 5 BUI : so htipsAvww.bloomberg.com/quote/EURUSD:CUR = Australian dollar -nip:/www bloomberg. com quote/AUDUSD:CUR + Singapore dollar hup:tavww.bloomberg.com/quote/SGDUSD:CUR Jn, there are many data providers to choose from. WORKBOOK QUESTION: Does a stronger currency indicate a stronger economy? CURRENCIES 2012 Japanese WORKBOOK QUESTION: Has the Japanese yen gone up or down in value? WORKBOOK QUESTION: Which currency looks the most volatile to you? Euro: White Brazilian real: Red Australian dolar: Yellow= US3 month = US 30 year. = Overall bond market INTEREST RATES hut ups hui 7 7 www. bloomberg. com/quote/tSGG3M:IND ‘www. bloomberg, com/quote/USGG2YR:IND www. bloomberg, com/quote/USGGIOYR:IND www. bloomberg.com/quote/USGG30YR-IND ‘www. bloomberg, com/markets es-bonds/government-bonds/s/ WORKBOOK QUESTION: Why are low interest rates good for countries and companies? US YIELD CURVE = US 10 year = Germany 10 year. = Italy 10y = Japan 10 year hip dtp bp tp swww. bloomberg, com/quote/USGGIOYR:IND www. bloomberg, com/quote/GDBR10:IND. ‘www. bloomberg, com/quote/GBTPGR10:IND/ ‘www. bloomberg, com/quote!GJGB10:IND WORKBOOK QUESTION: What does it mean if short term interest rates are high?US: Yellow Germany: White Tuly: Purple Japan: Green WORKBOOK QUESTION: Why are lalian yields so high in this chart? ETF’s on interest rates: = US short term (BSV). = US medium term (IEF) = US long term (TLT) * Municipal bonds (MUB). = Investment grade bonds (LQD) = Junk bonds (HYG) INTEREST RATE ETF'S 2012 hp hus up: hip: hep up: svww, bloomberg Bom /quotelBSV:US sewusbloomberg.com /quote/IEF-US swww bloomberg.com/quoteTLT:US ‘com/quote/MUB:US ccom/quote/LQD-US ‘com/quote/HYG:US Ayww bloom eww bloombe isvww.bloom US short term: White US — medium — erm Yellow US long term: Green Junk bonds: Purple Municipal bonds: Red WORKBOOK QUESTION: What implications could an increase in the yield of municipal bond have for local governments?COMMODITIES = WTI Crude Oil hhp:/www-bloombe = WTI Crude Oil ETF (USO)... _hup:/www hloomber ccom/quoteiUSCRWTICIND, ccomiquote/USO:US = Copper NA = Copper ETF (JIC) hutp:/worw bloomberg comquote!JICUS = CRB Index hup://www bloomberg.com/quote/CRY:IND = Commodity index ETF hutp:/www. bloomberg. com/quote/DBC:IND COMMODITIES 2011 - 2012 WTI erude oil: Green Copper: Purple CRB Index: Yellow WORKBOOK QUESTION: Which commodity is most followed by traders? /ORKBOOK QUESTIO! Do higher oil prices confirm economic growth? WORKBOOK QUESTION: Are rising oil prices always good? = WORKBOOK QUESTION: What does the CRB index show you?= Gold. htip:/www bloomberg. com/quote/X AUUSD:CUR = Gold ETF GLD) ip: bloomberg com/quote/GLD:US GOLD 2011 - 2012 WORKBOOK QUESTION: What does the price of yold tell you? WORKBOOK QUESTION: Why would someone buy gold?OTHER PRICE DATA In this section we will look at a few more sets of price data. 1. US bank loans 2. US rail loads 3. Baltic dry index WORKBOOK QUESTION: Why would you look at these data?US bank = US bank loans... http: /www.bloomberg.com/quote/ALCBBKCR:IND. US BANK LOANS, S billions 2011 - 2012 WORKBOOK QUESTION: Who releases this figure and what is the interpretation? WORKBOOK QUESTION: What happens to general price levels if th credit in the economy? s f00 much WORKBOOK QUESTIO‘ economic recovery? Can more lending be an indication of a healthy WORKBOOK QUESTION: How are markets likely to respond to a decline in bankloans?2. Rail loads This indicator shows the total amount of car loads that railway lines in the US carry. The number I look at is actually the sum of two different numbers: normal carloads and intermodal car loads. = Rail load carloads, hutp://www.bloomberg.com/quote/RAILORGT:IND Rail load intermodal carloads... http://www. bloomberg.com/quote/RAILTOTL:IND RAIL LOADS: NORMAL + INTERMODAL CARLOADS 2011 -2012 WORKBOOK QUESTION: What indication can you get about the US economy if the amount of products carried falls? WORKBOOK QUESTION: Why is the amount of rail loads carried considered a leading indicator? a3._Baltie dry inde = Baltic dry index http://www. bloomberg.com/quote/BDIY:IND BALTIC DRY INDEX 2011 ~ 2012 WORKBOOK QUESTION: What is the interpretation behind the Baltic dry index? WORKBOOK QUESTION: Is the Baltic dry index US based? WORKBOOK QUESTION: Why is US data so important to us? WORKBOOK QUESTION: What does it mean if the Baltic dry index goes up? WORKBOOK QUESTION: Is a fall of the Baltic dry index always related to a lack of demand? These are some of the main price data indicators that I look at. However in Appendix D you might find some other useful and interesting price data,Lex’s Trading Screen: Survey data INTRODUCTION + Survey data can be either economic or investor sentiment based = Based on a sample. + Focus on weekly data WORKBOOK QUESTION: What do we mean when we say it is based on a sample? We will look at * Bloomberg Consumer Comfort Index * Initial jobless claims + AAT investor sentiment surveyBLOOMBERG CONSUMER COMFORT INDEX. + Based on a random sample of 250 consumers aged 18 + Released on a weekly basis + Data can range from -100 (very negative) to +100 (very positive), = Bloomberg Consumer Confident Index hitp:/ww. bloomberg. com/quote/COMFCOMF:IND BLOOMBERG CONSUMER COMFORT INDEX 2007 ~ 2012 WORKBOOK QUESTION: What does the Bloomberg Consumer Comfort Index show? WORKBOOK QUESTION: Which factors do you think will affect consumer comfort?US INITIAL JOBLESS CLAIMS Related to the consumers’ comfort, you can also look at data such as weekly initial Jobless claims. This indicator shows how many new people have filed for ‘unemployment benefits during the previous week. = US initial jobless claims hutp://oww. bloomberg. com/quote/INICIC:IND US INITIAL JOBLESS CLAIMS 2000 - 2012 WORKBOOK QUESTION: Do you ideally want initial jobless claims to be as high as possible? WORKBOOK QUESTION: Do employed people feel more confident as consumers?AAL INVESTOR SENTIMENT SURVEY This survey asks investors if they are bullish, neutral or bearish for the next 6 months on the stock market at the moment the survey is being conducted. The overall percentage of bulls, bears and neutral investors are shown on the following three different pages: = Bulls butp://www: bloomberg.com/quote/AATIBULL:IND = Neutral hutp://www. bloomberg. com/quote/AAIINEUT:IND = Bears bhutp:/www.bloomberg.com/quote/AATBEAR:IND The way I like to look at these figures is by constructing a ratio between bullish. and bearish investors. So I divide the percentage of bullish investors by the percentage of bearish investors. If you do not have a Bloomberg terminal you will probably need to calculate it yourself by looking at both web pages. AATIINV! ‘STOR SENTIMENT SURVEY: BULLS / BEARS 2007 - 2012 WORKBOOK QUESTION: What number should you get if you sum up the three percentages from the three webpages given on the AAIT investor sentiment survey? WORKBOOK QUESTION: Ifa higher percentage is bullish than bearish, would the ratio be greater or smaller than one? WORKBOOK QUESTION: At the end of 2010, the ratio peaked almost at 4. What does this mean? How many bullish traders were there for each bearish trader?Lex’s Trading Screen: Derived data INTRODUCTION = Data that is calculated based on other data. We will look at: © Volatility Index VIX © Percentage of stocks trading above their 200-day moving average o The roup Economic Surprise IndexVOLATILITY INDEX VIX + This shows the implied volatility of S&P500 options and gives an indication of the overall markets volatility + Typically if the VIX is below 20, it means that investors are complacent. A VIX above 30 means that investors are scared of the market at the moment. = VIX Index butp:/www.bloomberg.com/quote/VIX-IND. VIX INDEX 2011 - 2012 WORKBOOK QUESTION: Do you expect the market 10 go up when the VIX is low? WORKBOOK QUESTION: The VIX is often called the fear index, why? 2PERCENTAGE OF STOCKS TRADING ABOVE THEIR 200-DAY. MOVING AVERAGE 200DMA = This indicator shows the percentage of stocks that are listed on the New York Stock Exchange and that are trading above their 200DMA. = NYSE Stacks above 200DMA, http://www. bloomberg com/quote/A ANIBEAR:IND NYSE STOCKS ABOVE 200DMA 2011-2012 WORKBOOK QUESTION: What is the 200DMA? How is it caleulated? WORKBOOK QUESTION: If a stock is trading above its 200 day moving average is it assumed to be bullish or bearish? WORKBOOK QUESTIO} indicator? Could this indicator also be used as a contraryTHE CITIGROUP ECONOMIC SURPRISE INDEX = us battp://www. bloomberg. com/quote/CESIUS:IND! = Europe bttp:/www.bloomberg.com/quote/CESIEU IND’ = Asia http://www. bloomberg. com/quote/CESIAPA:IND' CITIGROUP ECONOMIC SURPRISE INDEX - US 2011 — 2012 WORKBOOK QUESTION: What is the Citigroup economic surprise index? WORKBOOK QUESTION: What does a high number of the Citigroup economic surprise index indicate? WORKBOOK QUESTION: If the Citigroup economic surprise index falls, does it necessarily mean that the economic data has been bad? ‘Not available as of 17/08/12: Bloomberg has removed this link, please google for lates information,Lex’s Trading Sereen ~ Summary a. Price data Country indexes Sector indexes Style indexes Curreney Interest rates Commodities Other price data b. Survey data Bloomberg, Initial Jobless Claims AAII Investor Sentiment survey Consumer Comfort Index ©. Derived data Volatility index Percentage of stocks trading above their 200DMA Citigroup economic surprise index Of course you should also have price data on particular stocks. The choice of stocks you look at is a very personal one. I tend to have at least 3 or 4 domestic stocks per sector on my screen and then at least another 2 global peers. So it does not matter what your time frame of trading is. You need to know what else is going on. A move in the homebuilders might well be the best indicator of what will happen next in euro dollar for example!Appendix A: Stock market indexes Americs: = S&P 500, (US large-caps) hutpwww bloomberg com quote/$PX:IND = Nasdaq Composite, (US, tech & growth), hip:/iwww.bloomberg,com/quote/CCMP:IND. Dow Jones 30 (US large-caps) bitp:/www-bloomberg.com/quote/INDU:IND Russel 2000 (US sinall-eaps) bitp:/www bloomberg. com/quote/RTY-IND, = TSX (Canada, hntp:/www. bloomberg. com/quote/SPTSX:IND © BMV (Mexico) bitp:/ www bloomberg. com/quote/MEXBOL:IND_ = Bovespa (Braz hitp:/www. bloomberg. com/quote/IBOV:IND Asia: Nikkei 225 Gapan, hugpiwww.bloomberg.comquoreVK Y IND Shanghai Composite (China), hugp:siwww bloomberg com /quote/SHCOMP:IND, Hang Seng (Hong Kong) bntp:/www.bloomberg.comh/quote/HSLIND, Europe = Euro Stoxx 50 (Furo-zone), hhupjwwew bloomberg, com quote/SXSEAND = FTSE100 (UK), fnup./ Www. bloomberg.com quote/UKX IND = CAC4O (France) hp # www bloomberg. com/quote/CACsIND = DAX Germany), bbtp:/www. bloomberg. com/quote/DAX-IND = IBEX (Spain) bnup:/www,bloomberg.com/quote/IBEX:IND. = MIB (uly) bitp:/www bloomberg. com/quote/FTSEMIB:IND_ = AEX (Netherlands), bntp:/www. bloomberg. com/quote/AEX:IND = OMX (Sweden) btp:/www bloomberg. com/quote/OMX-IND. = SMI (Switveriana) bup:/www bloomberg. com/quote/SMEIND. 102Appendix B: How to look at relative performances Using the Bloomberg website: Say you want to reconstruct a similar chart to the one we have looked at when we compared the performance of the following stock market indexes: 2 SBP 500, ernnnnnnnnnen hhup:/!www bloomberg com/quote/$PX:IND. = Nikkei 225 (Japan), http://www bloomberg com/quote/NKY-IND = Shanghai Composite (China), hut://www bloomberg com/quote/SHCOMP:IND + Buro Stoxx 50 (Euro-zone), ... hntp:/mww:bloomberg.com/quote/SX5E:IND Step I: Notice that on the right side of each link you ean see the quote symbol for cach of the indexes S&P 500, wessnnennnnnnnn — SPX:IND, # Nikkei 225 (Japan), NKY-IND + Shanghai Composite (China), SHCOMP:IND = Euro Stoxx 50 (Euro-zone), ....-SXSEIND Step 2: Go to bloomberg,com and type in the quote of the S&P 500 (SPX:IND) in the upper right box and hit enter. ee. See |e a . a =o Bloomberg ser re-set | semnee = — eeeStep 3: Click on “chart” on you left hand side in the “More on SPX” section, 1,405.53 41.60 0.11% a Sr Comet Vass © lad Snr Cm 3047 at Step4: Type in the symbol of the first index you want to add to the comparison: The Nikkei 225 (NKY:IND) and click on the “Add” bution ‘S&P 500 Index SPX:IND —1\405.53 #760 0.11% Snapshot tomse AndxesStep 5: The next screen should show you the performance of the S&PS00 in orange and the Nikkei 225 in green plotted in the same chart Now you can add the third index: The shanghai composite (SHCOMP:IND) just in the same way it is done in the previous step. And aftepwats you would add the Euro Step 6: Unfortunately the time scale is not customable however you can choose one of the pre-set scales such as the three year performance or the year to date performance. = veUsing the Yahoo! Finance website: There are many other websites out there that will allow you to do the same thing. You might want to use Yahoo! Finance for instance. However each website usually uses their own quotes. For example on Yahoo! Finance the quotes are: Pleas epeecteeneeceegeeecee GSPC = Nikkei 225 (Japan), N25 + Shanghai Composite (China), 000001.88 = Euro Stoxx 50 (Euro-zone), .... ‘STOXXSOE ‘On the homepage you would type in “GSPC in the “Get Quotes” box and hit enter. (1) Then, on the next page you would click on “Interactive” in the “More on “GSPC” section that is on your left hand side (2), And finally above the chart you also have “Compare” button to add the other quotes (3). Do not forget to change the timescale on the bottom of the chart: it might be on “1 Day” on default. This is intra-day data and is not available for every index. ae (stoi nase sep soo vores » Summary Options Beste Tech Anas (emerge Jone Sees ees Compare “08°C te: 3 yh eoaiee Diss sto sc) (Coca As you can see it is pretty straightforward and very similar as on the Bloomberg website. Try it for yourself and get a feeling for both website and see which one you like. For instance, the Yahoo! Finance website does let you customize the time period and also select more than 5 years of data,Appendix C: ETF’s Sector ETFs: = Semiconductors hntp:/www. bloomberg. com/quote/SMH-US = Financials butp:/ www bloomberg.com/quote/XLF:US = Homebuilders hitp:/www. bloomberg. com/quote/XHB:US = Consumer discretionary bitp:/www-bloomberg.com/quote/XLY:US = Industrials bitp:/www bloomberg. com/quote/XLLUS. = Telecoms htp:/www. bloomberg. com/quote/l¥Z:US. = Oil bitp:/www bloomberg com/quote/XLE:US = Retailers bitp:/www. bloomberg. com/quote/XRT:US = Healtheare bp:/www. bloomberg. com/quote/XLV:US = Biotechs bitp:/www- bloomberg. com/quote/XLK:US = Transportation btp:/www, bloomberg. com/quote/lY TUS. = Real estate btp:/www bloomberg. com/quoteYR:US. # Consumer staples bitp:/www-bloomberg.com/quote/XLP:US = Utilities. btp/www.bloombers.comh/quote/XLU:US = Materials btp:/www bloomberg. com/quote/XLB:US = Technology, baitp:www bloomberg. com/quote/XLK:USTRADE?S|A4 OFFER Appendix D: Other data Arel gs index (survey data) cts whether their billings increased, decreased or stayed the same. It is used as an economic indicator of the non-residential construction activity but its interpretation goes far beyond that. It is a very good indicator for the construction sector and for the overall economy. This survey asks archit hitpr//www. bloomberg.com/quote/ARCHWOTB:IND CRB RIND index (derived data) The CRB RIND index tracks the price of the Following raw industrial components hides, tallow, copper scrap, lead scrap, steel scrap, zinc, tin, burlap, cotton, print cloth, wool fops, rosin, and rubber. These are essentially the main raw inputs used in industrial processes. ‘The theory behind watching this index is that if the index rises, it should be good for the markets because it is somehow an indication of economic growth. If the index goes up, it is likely it is due to incr ed demand because businesses produce more products. However if the index goes up too much it might be an early indication of price instability and inflation which is not all too good for the economy. isp. archart.com/quotes!Futures/BVYOTRADE?S|A4 OFFER mployment change: non-farm pay rolls (price data) This monthly U.S. report is a measure of non-farm private employment. It is one of the reports that attract most attention of traders and usually creates big volatility swings as soon as it is released. The figure released indicates the amount of jobs that e added or lost in the economy during the previous month wet http:/www.bloomberg.com/quote/NFP_TCH:IND ISM PMI index (survey data) The ISM survey asks 400 purchasing managers over 20 industries a series of questions each month about economic activity in'a number of areas. This data is put together in an index that fluctuates between 0 and 100, When the ISM is above 50 the economy is expanding, and when it is below 50 the economy will soon start to contract, or is already contracting, itp: blodimberg.com/quote/NAPMPMLINDTRADE?S|A4 OFFER Retail Sales (survey data) Tn the US, retail sales are released on a monthly basis by the Census Bureau and the Department of Commerce. The report measures the change in the total value of all sales at the retail level. So it shows if consumers have increased or decreased their spending on in-store sales and catalogue and out-of-store sales. Therefore it is considered a good indication of consumer spending and confidence but also of the overall economic activity, http://www. bloomberg.com/quote/RSTAMOM:IND Steel production capacity utilization index (survey data) This survey shows the average percentage that a steel factory in the US is being utilized. It is good measure of how well the steel companies are doing as high utilization rates means they may be able to raise prices and vice versa. Additionally in many ways it shows how well industry and construction are faring as well. Further it gives some hints about coal and iron ore prices, which are both needed in the production of steel http://www. bloomberg.com/quote/RSCURATE:IND_Suez Canal tonnage (price data) Just like the Baltic dry index this is one of the many of the price data available to get a feeling of the health of the overall economy. This specific piece of data shows the amount of tonnage that has gone through the Suez Canal tonnage. It is a good indication of international trade, especially between Asia and Europe.