Monday, October 6, 2014 9:19 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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Friday’s market held its solid gain. That was “big” heading into a weekend in an environment where it seems anything (mostly bad) can happen.
The two-day rebound returns the major market averages to a level where sellers won a tug of war a week ago, triggering a brief but sharp plunge.
The Bulls have their weak moments, but are there to buy at current levels and on pullbacks. Buyers will have to back off, if the Bears are going to gain traction.
The spike up and correction I was looking for in September (S&P 500: down 4.6%) occurred.
What’s important is new negatives did not crunch stock prices further, and Thursday’s and Friday’s rally held.
Odds now favor a sideways trend with a slight upward bias.
October has a rep for being a pivotal month, setting the stage for what is the “Best Six Months for Owning Stocks.”*
This period, November 1 to May 1, has consistently outperformed the six months for owning stocks (May 1 to November 1), though the starting date for the upswing has frequently begun earlier.
Alcoa (AA) will report Q3 earnings Wednesday, kicking off the Q3 earnings season in which the S&P 500 companies are expected to show quarter gains close to 5%.
The market will begin to focus on earnings, Q3 to some extent, but more importantly on corporate guidance and Street projections for earnings over the next nine to twelve months.
This is still a dangerous market. The Bulls have the edge for now, but their clout will be tested at these levels and slightly higher.
Minor supporttoday is: DJIA: 16,947; S&P 500: 1,961; Nasdaq Comp.: 4,457.
Resistance todayis: DJIA: 17,107; S&P 500: S&P 500: 1,981; Nasdaq Comp.: 4,504.
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Investor’s first read– Daily edge before the open
DJIA: 17,009
S&P 500: 1,967
Nasdaq Comp.:4,475
Russell 2000: 1,104
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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS (10/3 close)
By technically analyzing each of the 30 Dow industrials then using the Dow “divisor” to convert the data back into the DJIA, I can get a better read on what is primary support and a secondary support.
As of the 10/3 close: Resistance 17,260; Primary Support: 16,824; and Secondary Support: 16,741.
The resistance and support levels listed daily may differ, since they are shorter term.
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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:
Light week for reports on the economy. FOMC meeting, minutes released Wednesday, but no press conference For detailed analysis of both the U.S. and Foreign economies along with charts, go to www.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.”
TUESDAY:
ICSC Goldman Store Sales (7:45):
Consumer Credit (3:00):
FOMC Meeting begins
WEDNESDAY:
MBA Purchase Apps/ Refi’s (7:00):
FOMC Minutes (2:00): No Press Conference
THURSDAY:
Jobless Claims (8:30):
Wholesale Trade (10:00):
FRIDAY:
Import Export Prices (8;30):
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RECENT POSTS:
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
Sept. 25 DJIA 17,210 Back to Tug of War – Bulls vs. Bears
Sept 26 DJIA 16,945 Moment of Truth for Market’s Direction
Sept. 29 DJIA 17,113 Huge Test for Bulls Today
Sept. 30 DJIA 17,071 Big Move in Market for Winner of Tug of W ar
Oct. 1 DJIA 17,042 October – Risk or Opportunity ?
Oct. 2 DJIA 16,804 October Opportunity But Angst in Interim
Oct. 3 DJIA 16,801 Rally Today Must Hold
*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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