Back to a Tug of War - Bulls vs. Bears

George Brooks |

ThursdaySeptember  25 , 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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   Yesterday’s surge is hard to deny.  Prompted by the August 18% jump in new home sales, the market reversed more than half of its preceding three day loss. It was a powerful one-day reversal which  reduces the likelihood of a near-term correction, for now.

   I expected the Yellen “spike” after she announced interest rates would remain low for a considerable time last Wednesday, even believed it would offer a chance to raise cash. Friday, I questioned if the frenzy accompanying the Alibaba (BABA) IPO was a sell signal, and  Tuesday warned that a rally would be risky.

    Time will tell, but I must defer to the Street on this and accept the fact the correction lows  set eight days ago and successfully tested yesterday  are the source of significant support.  A correction of any significance must break below the DJIA 16,937 (S&P 500: 1,978; Nasdaq Comp. 4,500) levels.

    While yesterday’s surge was triggered by a surprise 18% jump in August New Home Sales, buyers must have been lurking as the major market averages slid down to  mid-September lows ready to pounce given a reason.  The New Home Sales report brought them in.

 TODAY:

   While yesterday’s surge did not erase the preceding three day slide, it  clearlyputs the burden of proof in the Bears’ corner.  Just how far the Bulls  can move the ball from here will play out  in coming days. 

   We know now, the Bulls are still very much interested in buying stocks on pullbacks.

Support today is  DJIA: 17,137; S&P 500: 1,991; Nasdaq Comp.:4,536

Resistance today is DJIA:  17,273; S&P 500: 2,006; Nasdaq Comp.: 4,576    

Investor’s first readDaily edge before the open

DJIA: 17,210

S&P 500: 1,998              

Nasdaq  Comp.:4,555    

Russell 2000: 1,128

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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 has formed to counter ISIL. A full-blown bombing mission has been undertaken, which stands to be ongoing. Psychologically, that stands to play well in America, which has been warned of future terrorist activity.  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): Declined1.8 pct in Aug.  Year/year is down5.3 pct.

TUESDAY:

ICSC Goldman Store Sales: Up 0.1 pct. from prior week.  Year/year up 4.1 pct.

FHFA House Price Ix (9:00): July up 0.1 pct. vs. increase of 0.3 pct. June

PMI Mfg. Ix. (9:45): September“flash” 57.9 unchanged from final August

Richmond Fed Mfg. Ix. (10:00):   September index 14 vs. 12 August

State Street Investor Confidence Ix (10:00):

WEDNESDAY:

MBA Mtge Purchase/Refi Ix.(7:00): Purchases down 0.3 pct. in Sept 19 week; Year/year down 16 pct.  Refi’s down 7 pct.

New Home Sales (10:00): Aug sales surged 18.0% to a 504,000 annual rate. Data reported yesterday was for July.

THURSDAY:

JoblessClaims(8:30): Rose 12,000 to 293,000 in Sept. 20 week

Durable Goods (8:30): Down 18.2pct. in Aug.; Ex-Trans+0.7pct.

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 ?

Sept. 22  DJIA  17,279  Another Test for the Bulls

Sept. 23  DJIA  17,172  Rally Now Would Be Risky

Sept, 24  DJIA  17,055  Critical Crossroads for Money Managers

*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

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