A Brief Yellen Rally This Week?

George Brooks |

MondaySeptember  15 , 2014     9:16 a.m.  BEFORE the OPEN


Daily:Boiling down fundamental, technical, economic,

monetary, fiscal, psychological, and seasonal data into a quick read.



   Odds favor a  spike in stock prices this week if the Fed Chief Janet Yellen implies that interest rates won’t edge up until Q2 next year or later when she holds her press conference Wednesday at 2:30.

    Nevertheless, the potential for a sharp correction in coming weeks increases as uncertainties mount here and abroad to keep buyers on the sidelines and prompt others to sell.

    We have seen worse negatives in recent years, but not with the market at these levels. While this bull market can run much further, the market has not seen a correction greater than 10% in three years.

    From what I read, there is no shortage on the Street of those who expect a correction, but I haven’t seen many who see one in excess of 10%, just the 3%-5% variety. But small corrections can become much bigger if new negatives hit the market at the point the small correction is poised for a rebound.   


    The bulls are still hanging tough. The market had a chance to fall apart Friday but didn’t. Most likely the Street is wary of bad news from the Fed Wednesday, but not wary enough to bail out.

    Just a hint from Fed Chief Yellen Wednesday that interest rates won’t be rising in Q1 would be enough to trigger a sharp rally, and that would be risky for new buyers, especially one’s chasing stocks that have already run.

Resistance todaystarts at DJIA: 17,036; S&P 500: 1,991; Nasdaq Comp.: 4,582.

Support today is“iffy” at DJIA: 16,949; S&P 500: 1,981; Nasdaq Comp.: 4,556.

Investor’s first readDaily edge before the open

DJIA: 16,987

S&P 500: 1,985

Nasdaq  Comp.:4,567   

Russell 2000: 1,160



   All eyes will be on Fed Chief Janet Yellen’s comments at 2:30 Wednesday, as the Street seeks a better idea of when the Fed will raise its benchmark interest rate, currently targeted for mid-2015.

   Market weakness last week is attributed to concerns that increasing traction in the U.S. economy would prompt the Fed  to raise rates earlier in 2015.

to zero.  Clearly it would put some extra spendable dollars in the hands of people who rely on income from money market funds, CDs and other sources of fixed income.

       This IS GOING TO HAPPEN. Instead of  hoping it will happen later rather than sooner, the Street should base its projections on the assumption that rates have already bumped up.

   The U.S. economy should be able to accommodate a slight increase in interest rates from next to nothing.  The economy would benefit from the extra income higher rates would  generate from fixed income so many people rely on.



   Ukraine/Russia – quiet for now, but has the potential to get uglier.

   ISIS/Iraq/Syria – A Euro/Mid-East coalition is forming to counter ISIL’s territory and influence quest.

    This can get uglier than ugly where it is now. The possibility of a major war resulting must be considered.


TECHNICAL ANALYSIS OF EACH OF THE 30 DOW INDUSTRIALS (9/12)  At key junctures, I technically analyze each of the 30 Dow industrials, then using the Dow’s “divisor” convert these results back into the DJIA. I seek a near-term resistance level and a primary and secondary support level.

   As of  September 12, the near-term resistance level is 17,135; the primary support is 16,890 and secondary support is 16,500.



    The center of focus this week will be the FOMC meeting and Fed Chief Janet Yellen’s news conference at 2:30 p.m. Wednesday.  For detailed analysis of both the U.S. and Foreign economies along with charts, go towww.mam.econoday.com. Also included is an explanation of each indicator. If you want to know when the next Employment report or any other key report will be released that info is also there under “event release date.”


Empire State Mfg. Svy (8:30): September index up to 27.14 from 14.69 in August.  New orders 16.86 up from 14.40

Industrial Production (9:15):


FOMC meeting begins

ICSC Goldman Store Sales (7:45):

PPI-FD (8:30):


Consumer Price Ix.(8:30):

Housing Market Ix.(10:00):

FOMC announcement (2:00):

Fed press conference – Yellen (2:30):


Jobless Claims (8:30):

Housing Starts (8:30):

Philly Fed Svy (10:00)


Leading Indicators (10:00):



Sept.  2   DJIA  17,098  What are Odds of a Big Correction of 8% - 12% ?

Sept.  3   DJIA  17,067  Breakout and Run – Followed by a Crunch

Sept. 4    DJIA  17,078  Bulls “Must” Take Charge NOW

Sept. 5    DJIA  17,069  Market to Tip Its Hand Today

Sept. 8    DJIA  17,173  Bullish Storm Surge Imminent ?

Sept. 9    DJIA  17,111  Bulls to be Tested Today

Sept. 10  DJIA  17,013  Stock Market Back on the “Edge”

Sept, 11  DJIA  17,068  Last Chance for Bulls to Avoid Crunch

Sept. 12  DJIA  17,049  The Fed, Elections, Geopolitics Stymie Bulls

A Game-On Analysis,  LLC publication

George  Brooks

“Investor’s first read – a daily edge before the open”


Investor’s first read, is a Game-On Analysis,LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.
















DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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