Big Week – Economic Reports/ Q2 Earnings Reports
Monday, July 28, 2014 9:08 a.m. BEFORE the OPEN
TODAY:
Friday I warned readers not to rule out a three to four day slide before a nice leg up.
We got the first day of that slide on Friday, which was triggered in part by a disappointing quarterly earnings report by Amazon (AMZN) and disappointing guidance by Visa (V) . Visa’s $7.97 drop Friday lopped 52 points off the DJIA.
The market has been tracking a “step-up” pattern in recent weeks with minor three-four day corrections following up moves.
The Street is currently digesting Q2 earnings reports and in the process of mapping out projections for 2014 and part of 2015.
At this point, it appears it likes what it sees and hopes to get confirmation from a host of economic reports due out this week (see below).
At some point here, I see a more severe correction setting in before fall. The market seems immune to international crises (Israel-Hammas/Russia-Ukraine). Obviously, the situation in the latter will have to get worse to have a meaningful impact on stock prices.
TODAY:
Friday’s abrupt slide may be enough to set the stage for a rally here. Pre-market activity suggests that though any strength at the open needs to follow through – no room for a rally failure.
So far, stock prices have been stable during the Q2 earnings period, raising the odds stock prices will move up in coming weeks.
Support today is DJIA: 16,867; S&P 500: 1,967; Nasdaq Comp.: 4,411
Resistance today is DJIA 17,057; S&P 500: 1,988; Nasdaq Comp. 4,476
Investor’s first read– Daily edge before the open
DJIA: 16,960
S&P 500: 1,978
Nasdaq Comp.:4,449
Russell 2000: 1,144
THE FED:
We will hear more cautionary comments from the Fed going forward in an attempt to ease an interest rate hike when its reality hits early next year. The Fed does not want speculative fever to run rampant prior to the rate increase.
The Fed’s “easing in” policy is bad news for those who want the feeding frenzy to continue unabated, but good news for investors who opt for a more stable market and an inevitable crunch instead of crash.
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TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS
(UPDATED ANALYSIS: July 21)
At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and a more extreme support level, as well as a short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself. The DJIA is a price-weighted average and subject to distortion by higher priced issues.
I ran my analysis again following the Monday, July 21 close and concluded the near-term upside for the DJIA is 17,333 a reasonable downside is 16,932 and more extended downside risk to 16,865.
My analysis run last week July 1 projected near-term resistance for the DJIA at 17,109 where it stalled last week.
Note: My daily support/resistance levels are more short-term oriented.
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THIS WEEK’s ECONOMIC REPORTS:
The economic report schedule is heavy this week with a good balance between housing, service, production and employment
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.”
MONDAY:
PMI Services (flash) 9:45):
Pending Home Sales (10:00):
Dallas Fed Mfg (10:30):
TUESDAY:
FOMC Meeting begins
ICSC Goldman Store Sales (7:45):
S&P Case Shiller Home Prices (9:00):
Consumer Confidence (10:00):
State Street Investor Confidence (10:00):
WEDNESDAY:
MBA Purchase Apps/Refi’s (7:00):
ADP Employment (8:15):
GDP 8:30):
FOMC Minutes – no press conference
THURSDAY:
Jobless Claims (8:30):
Chicago PMI (9:45):
FRIDAY:
Employment Situation (8:30):
Personal Income (8:30):
PMI Mfg. Ix. (9:45)
Consumer Sentiment (9:55):
ISM Mgd Ix. (10:00)
Construction Spend (10:00)
Global Mfg PMI (10:00)
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RECENT POSTS:
July 22 DJIA 17,051 Significance of Yellen’s Warning
July 23 DJIA 17,086 Feeding Frenzy in Low-Priced Stocks Imminent ?
July 24 DJIA 17, 113 Taper’s End Fully Discounted – 2015 Interest Rates Not
July 25 DJIA 17,083 Is Market Action Setting Stage for a Leg Up ?
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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