Sequester is finally here, or is it ? The Street doesn’t care, suggesting it expects certain automatic spending cuts will be restored quickly, others fought over. The government runs out of money on March 27, but can rearrange the deck chairs to buy time until May 18.

There will be a meeting at the White House at 10:00 a.m. between President Obama, Republicans Boehner and McConnell and Democrats Reid and Pelosi. President Obama has extended the start of sequester until 11:59 today. There is a question of exactly when the automatic cuts will start, clearly not all at the same time. Both parties proposed partisan plans yesterday to avoid sequester, but were D.O.A. in the Senate.

The market gained strength earlier this week as a result of reports of an improving economy. Wednesday capital goods and pending home sales numbers for January were up nicely. Yesterday’s Chicago PMI report for January showed an improving economy in the Midwest. Today will feature four key reports (see below).

Yesterday, the market failed to follow through on Wednesday’s strength and closed at its low for the day with a late day sell off. Unless something encouraging comes out of today’s White House meeting, today’s market will get its cue from the economic reports.

TODAY: I will post here well ahead of the open, so won’t have benefit of any news that breaks before 9:30, or any change in the futures which currently indicate a lower market.
Based on what I see now, I expect a drop below DJIA 14,000 and below S&P 500:: 1,500. The meeting at the White House could produce optimistic statements from both parties about resolving spending cuts with minimal damage and reference to tax reform, or another but more political way of saying revenue increases.
Investor’s first read – an edge before the open
DJIA: 14,054.49
S&P 500: 1,514.68
Nasdaq Comp.: 3,160.19
Russell 2000: 911.10
Friday, March 1, 2013 (6:55a.m.) I will be out of town Monday, but will try to post my blog.
APPLE (AAPL: $441.40)
Apple’s Annual Meeting on Wednesday did nothing for its stock, it closed down $4.40 for the day. Yesterday it was down $3.17 points. Apple CEO, Tim Cook, promised, “Some great stuff is coming,” but was short on details. Cook claimed Apple was on the verge of inventing more breakthrough products. Referring to its idle cash, Cook said, “We are in very, very active discussions on it.” That was an opportunity lost. Big buying is once again needed to head off a drop below $435.
I do not own, nor am I short Apple’s stock.
FACEBOOK (FB – $27.25) Yesterday, I said FB needed a big buyer or it was going to drop to $25.75 – $26.12. After dropping to$26.30, it got a big buyer in the final hour of trading, possibly as a result of news at 1:08 that it consummated its acquisition of Microsoft’s Atlas ad serving and tracking business, an important step in beefing up its ad potential. The surge in its price absorbed some of the selling that has been putting pressure on its stock. Resistance is now $27.40. Support $26.90.
I don’t own, nor have I ever owned FB. Generally, I don’t recommend or comment on individual stocks. I started covering FB technically after its IPO because on May 21. I felt at $34 it was very vulnerable in face of all the misunderstanding and hype. I warned of a drop to $24-26, which it did shortly thereafter. Following a rally back into the 30s, FB dropped into the low 20s where on August 2, I forecast a low of $16.88. On September 4, it hit $17.55, its low since its IPO at $38. I’ll continue technical coverage for a while to accommodate readers.
As for Apple, well it is a big-name stock that got shellacked in a short period of time, I wanted to help target a bottom as with FB. Comments are based on technical analysis only.
ECONOMY:
This will be a heavy week for economic reports.
But the Street is heartened by favorable economic data on employment, personal income, consumer sentiment, auto sales construction spending, durable goods manufacturing, and housing.
I am going to list the economic reports below but will not include the numbers from the last report, since those numbers are often revised significantly and therefore are potentially misleading.
I strongly urge you to access the website: www.mam.econoday.com for detailed reports on this week’s calendar and an excellent recap (plus graphs) of last week’s reports. The site does a great job graphically illustrating key indicators.
FRIDAY;
Personal Income/Outlays (8:30)
PMI Mfg. Ix. (8:30)
Consumer Sentiment (9:55)
ISM Mfg. Ix. (10:00)
George Brooks
“Investor’s first read – an edge before the open”
[email protected]

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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. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.