Minutes from the FOMC’s two-day meeting and Fed chief Janet Yellen’s press conference at 2:30 p.m. will hold center stage today, though little “new” is expected.
There are no significant economic reports scheduled for release today, so the market’s direction will be driven by technical factors, one of which will be expectations for a spring recovery in the economy and in the housing market.
The pattern of trading Tuesday mirrors that of Monday – up sharply at the open, then sideways for the rest of the day.
Expect the same pattern today, with a little profit-taking.
The market can press higher today rising to DJIA: 16,408 (S&P 500: 1,879)
Support is DJIA: 16,320 (S&P 500: 1,867). Breaking that, takes the market down to DJIA: 16,268 (S&P 500: 1,863) near-term.
Undoubtedly, a break in the winter weather will boost consumer optimism resulting in a surge of retail spending. This may be enough to shake loose some of corporate America’s stash of cash resulting in plant and equipment spending, even a new hire or two.
If the break in weather doesn’t prompt a rebound, the stock market is in for a correction. However, odds favor a rebound, a big one.
Last week New York Fed president Bill Dudley said he believes severe winter weather has shaved a full percentage point off the nation’s GDP in Q1, Beyond that, Dudley is optimistic since there will be less drag from federal spending cuts,
Investor’s first read– a daily edge before the open
S&P 500: 1,872
Nasdaq Comp.: 4,333
Russell 2000: 1,202
Wednesday, March 19, 2014, 9:14 a.m.
improved household finances, and corporations that are awash in cash.
Manufacturing output , new orders and exports are up for the eighth consecutive month, suggesting its recovery is real, though not yet robust. Our economy has
scratched and clawed its way out of a horrendous recession without help from Europe. Obviously, a recovery there stands to accelerate our recovery here.
On March 21, Russian lawmakers will consider legislation allowing it to incorporate areas in other countries where residents want to secede in face of a dysfunctional central government.
Russian nationalism is running high in Crimea and it can spread to other parts of Ukraine even countries that were once satellites to Russian control.
This suggest to me a risk of civil wars breaking out in countries where the Russian language is spoken.
For now this represents an uncertainty for investors, but that could change for the worse, and there is little the West can do about it. No one wants to fight a land war next door to Russia, and Mr. Putin knows it.
Sanctions are about the only deterrent the West has, but Russia has cards to play other than military, since it has economic ties to Europe, especially Germany.
This is not over, be forewarned.
TECHNICAL ANALYSIS EACH OF 30 DOW STOCKS:
At key junctures, I technically analyze each of the 30 Dow Jones industrials for a reasonable near-term downside and a more extreme downside, as well as a near-term upside potential. I note the price for each, add them up and divide by the DJIA divisor (0.1557159) and arrive what the DJIA would be if each of the 30 stocks hit my targets.
As of Thursday’s close I concluded a reasonable near-term downside for the DJIA was 15,900, a more severe near-term downside would be 15,625. The near-term upside would be 16,511. That’s all assuming the overall news environment doesn’t change.
THIS WEEK’s ECONOMIC REPORTS:
The economic calendar features important reports reflecting trends in manufacturing and housing, as well as the big picture, the Leading Indicators.
These reports may still be adversely impacted by severe weather conditions.
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 Ix. (8:30): Up slightly in Feb. to 5.61 from 4.48; New Orders were 3.13 vs. minus 0.21 in Jan.
Industrial Production (9:15): Rebounded sharply 0.8 pct. in Feb. after a 0.2 pct decline in Jan. Manufacturing led the charge with a 0.8 pct. gain after a 0.9 pct. loss in January.
Housing Market Ix. 10:00): Failed to rebound significantly, the index advanced one-point to 47 vs. 46 in Feb..
FOMC meeting begins, ends Wednesday
ICSC Goldman Store Sales (7:45):Same store sales at major retail chains rose 0.7 pct. in the Mar. 15 week. Y/Y is 1.5 pct.
Consumer Price Ix. (8:30): Prices rose 0.1 pct. in Feb. vs. a gain of 0.1 pct. in Jan.
Housing Starts (8:30): Feb. Housing Starts were up down 0.2 pct. in Feb. vs. an 11.2 pct. drop in January. However, Permits were up 7.7 pct. vs. a drop of 4.6 pct. in Jan..
MBA Purchase Apps (7:00):
FOMC announcements (2:00 p.m.):
Pres Conf. Fed chair Yellen: (2:30 p.m.):
Jobless Claims (8:30):
Philly Fed Svy (10:00):
Exiting Home Sales (10:00):
Leading Indicators (10:00):
Quadruple Witching Day
Feb 28 DJIA 16,272 March Setting Stage for Spring Rally.
Mar 3 DJIA 16,321 Russian Bear Providing American Bull an Opportunity
Mar 4 DJIA 16,168 Crisis Almost Over – Easy Does it on Opening Prices
Mar 5 DJIA 16, 395 Street Reaching for Risk – Sneaky Strong
Mar 6 DJIA 16, 360 Selective – Stock Pickers’ Market
Mar 7 DJIA 16,421 Pivotal Day in the Market
Mar 10 DJIA 16,452 Important Test for the Bulls Today
Mar 11 DJIA 16,418 Gold Due For a Play ?
Mar 12 DJIA 16,351 Crimea – How Big A Negative for Stocks ?
Mar 13 DJIA 16,340 Correction to Set Up An Opportunity
Mar 14 DJIA 16,108 Selling Climax Next Week ?
Mar 17 DJIA 16,065 Rally Failure Risk, But Trader’s Buy Looms
Mar 17 DJIA 16,247 Market Vigil – Economy and Russian Nationalism
“Investor’s first read – an edge before the open”
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The writer of Investor’s first read, George Brooks, is not 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 investment advice or 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. Brooks may buy or sell stocks referred to herein.