Another Test for the Bulls

George Brooks |

MondaySeptember  22 , 2014     9:13 a.m.  BEFORE the OPEN

…………………………………………………………………………………

Daily:Boiling down fundamental, technical, economic,

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

……………………………………………………………………………………………………….

   Within five weeks the stock market will cross the threshold of the “Best Six Months” for owning stocks (November 1 to May 1).*

   While the business of buying stocks aggressively by institutions tends to start in the fall, the November 1 to May 1 period  that has been targeted for studies by the Stock Trader’s Almanac going back to 1950 has the best record.

   With some exceptions, this six months’ stock performance is superior to the May 1 to November 1 period.

   But 2014 has been one of the exceptions with the DJIA  currently up 4.2%. Since last November 1, the DJIA is up 11.2%.

    Is a correction overdue ?

    Clearly not if you look at the economy, which appears to be gaining traction. And, depending on who you ask, stocks are reasonably valued. The Fed has promised to keep interest rates low for a considerable time (!), and where else can one invest money ?

    Few in the Street will question the possibility of a minor 3% correction, but a more severe correction (8% - 12%) is out of the question. It would catch the Street totally by surprise.

    That is one reason whyinvestors should be aware it could happen. A minorcorrection can turn into a more severe one if new negatives hit the market along the way.

TODAY:

   Pre-market trading indicates a lower open with minor support at DJIA 17,220; S&P 500: 2,003; Nasdaq Comp.: 4,551.

   If we are going to get a more severe correction, support will have to be broken  in the area of DJIA 17,000; S&P 500: 1,980; Nasdaq Comp.: 4,500.  That’s tough support. Failure to hold there would be a bad sign.

Investor’s first readDaily edge before the open

DJIA: 17,279

S&P 500: 2,010

Nasdaq  Comp.:4,610     

Russell 2000: 1,146

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

THE FED: No  more  Yellen press conferences until Dec. 17

The Street wanted clarification on the Fed’s interpretation of interest rates remaining low for a “considerable time,” a term used since last March. They got it Last Wednesday when Fed Chief Janet Yellen emphasized that rates are unlikely to rise quickly as the economy continues to improve, saying, “Even after employment and inflation are near mandate-consistent levels, economic conditions may for some time warrant keeping the target federal funds rate below levels the committee views as normal in the longer run.”

   The Fed projects a rise in the Federal Funds rate to 1.375 by the end of 2015

 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

INTERNATIONAL TENSIONS:

   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.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

THIS WEEK’s ECONOMIC REPORTS:

    Big week for economic reports.   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.”

MONDAY:

Existing Home Sales (10:00):

TUESDAY:

FHFA House Price Ix (9:00):

PMI Mfg. Ix. (9:45):

Richmond Fed Mfg. Ix. (10:00):

State Street Investor Confidence Ix (10:00):

WEDNESDAY:

MBA Mtge Purchase/Refi Ix.(7:00):

New Home Sales (10:00):

THURSDAY:

JoblessClaims(8:30):

Durable Goods (8:30):

PMI Svcs flash Ix. (9:45):

Kansas City Fed Mfg Ix (11:00)

FRIDAY:

GDP (8:30):

Corporate Profits (8:30):

Consumer Sentiment (9:55):

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

RECENT POSTS:

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

Sept. 15  DJIA  16,987  A Brief Yellen Rally This Week ?

Sept. 16  DJIA  17,031  Street Keying on Yellen’s Wednesday Comments

Sept. 17  DJIA  17,131  Yellen Rally Risky – Raise Some Cash

Sept. 18  DJIA  17,156  Will BIG Money Sell Into Strength ?

Sept. 19  DJIA  17,265  Alibaba Frenzy – a Sell Signal ?

*Stock Trader’s Almanac

A Game-On Analysis,  LLC publication

George  Brooks

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

Brooks007read@aol.com

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

Comments

Emerging Growth

Veritas Pharma Inc.

Veritas Pharma Inc, formerly Seashore Organic Medicine Inc is an emerging producer and distributor of medical marijuana.

Private Markets

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

Santo Diablo Mezcal

Santo Diablo Mezcal has been created to capitalize on a boom sector of the beverage market currently full of many small unmemorable products by producing one sexy, household, easily recognizable…