Bull Run - Investor Panic in Offing?

George Brooks |

Japan and in the U.S. in pre-market trading. Anxiously waiting for the market to open to see how much more money you will make today?
Worried you will miss the next stock to take off? Subscribing to financial newsletters, expecting your gains to quickly cover the cost?
Rejecting warnings of risk of a correction?

You are a normal investor, in a bull market that appears to have broken free of a host of adversities, i.e. its safe to invest.
Investment fever will accelerate, stocks will run for the wrong reasons, tiny unknown stocks will become household names.
This will happen, in time, but not without corrections along the way.
Looks like a nice open will greet investors today with the DJIA rising 60 points in early trading. The negatives are mostly of a foreign nature.
Support is DJIA 14,896 (S&P 500: 1,610).
(OK, I have said this before, and ……………………….
Five years ago, daily disclosures of negatives pounded stocks relentlessly. Today, the opposite is happening, and stocks are responding having recently recouped all that was lost in the worst bear market since the 1930’s.
If stocks seem pricey, it is because the S&P 500 has risen 142% from its bear market low. But these levels can be justified by the fact we had so many adversities ahead of us when the market topped out in October 2007. Most of those have come and gone.
We will have corrections and another bear market, both must be considered by investors before letting the euphoria of a runaway bull market cause them to get careless and over-extended.
Investor’s first read – an edge before the open
DJIA: 14,968.89
S&P 500: 1,617.50
Nasdaq Comp.: 3,392.97
Russell 2000:
Tuesday, May 7, 2013 (9:12 a.m.)
Stocks are up around the world: China, Germany, U.K., Switzerland, India,
SEQUESTER: Stay tuned, it is starting to hit. Erskin Bowles told CNBC Squawk Box yesterday sequester is a “stupid” way to handle deficit reduction.
At some point, the question will be raised about the sequester’s impact on the economy, notwithstanding the uncertainty it brings to persons at risk, directly and indirectly.
It is too early to expect anything to show up in the indicators, and it may never be a major issue if our economic recovery gains traction.
It is one of those potential negatives one has to consider along with other ingredients that lead to a decision to buy or sell.
Employers (government or private) may opt to furlough employees without pay, cut back on hours rather than release them to unemployment at the expense of the government. Even so, several weeks without pay has an impact on the economy.
This is one of those uncertainties that, along with a few others, can trigger a consolidation or pullback in the stock market.
Apple (AAPL: $460.71)
Spikes in volume on the upside indicate AAPL is now under systematic accumulation when only 12 days ago, it was under systematic distribution. $460 was yesterday’s target, $470 is today’s. A correction from these levels would find initial support at $436.
. This is its 5th rally since it started its descent from its September 705 all-time high. While the four preceding it failed to follow through, this one is different. For one, it comes from a severely depressed level, off 45% from its high. For another, it is accompanied by above average volume. It broke a downtrend line five days ago at $434, so I think the bottom “is in.” A test of that bottom of sorts is likely with the 2nd bottom coming in near $426.
I am not long or short AAPL.
FACEBOOK (FB - $27.57)
Thursday and Friday, FB hit resistance at $29, the same level that stopped it twice in February and backed off sharply, continuing today, slipping below my support $27.87. Based on this action, I am lowering support to$27.07.
Shareholders clearly “liked” what they heard from management Wednesday. The stock surged on heavy volume, as detractors obviously beat a retreat.
I am not long or short Facebook.
The reports on the economy are light this week with Thursday’s Jobless Claims and Fed Chief Bernanke’s speech at 9:30 Friday heading up the two key scheduled events for the week.
Consumer Credit (3:00p.m.)
Jobless Claims 8:30)
Wholesale Trade (10:00)
Fed Chief Bernanke speaks (9:30)
Treasury Budget (2:00 p.m.)
George Brooks
“Investor’s first read – an edge before the open”

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


Symbol Name Price Change % Volume
GPT.P.ACL Gramercy Property Trust Inc. n/a n/a n/a 0


Emerging Growth

AfterMaster Inc

Studio One Media Inc is a diversified media and technology company. It is engaged in the development and commercialization of proprietary, edge audio and video technologies for professional and consumer…

Private Markets


Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…