Monday, September 22 , 2014 9:13 a.m. BEFORE the OPEN
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Daily:Boiling down fundamental, technical, economic,
monetary, fiscal, psychological, and seasonal data into a quick read.
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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 read– Daily edge before the open
DJIA: 17,279
S&P 500: 2,010
Nasdaq Comp.:4,610
Russell 2000: 1,146
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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
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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.
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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):
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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”
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.
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