Best Six Months for Owning Stocks Looms?

George Brooks |

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 readDaily 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”

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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