The market took a hit yesterday after a rally in early trading, but the bears couldn’t close the show. When a sharp increase in selling didn’t develop, buyers stepped in and the bulls regained control.

Let me qualify that by noting that a correction here would result from a combination of bulls curtailing their relentless buying, as well as from investors selling because they are becoming fearful of what happens when the Fed exits its accommodative policy of asset purchases.
Presently, there is no tug of war between bulls and bears as there was in the earlier stages of the bull market recovery.
TODAY:
The biggest negative preventing a wild, runaway bull market is the Fed. How can it exit its policy without adversely impacting the economy and stock market ?
There are a number of opinions about that, but at this point we can’t be absolutely certain what will happen, ergo – uncertainty.
Will its exit cause an unreasonable spike in interest rates ? Will that hammer the stock market ? What are the economic consequences here and abroad ?
Yesterday’s inability of the market to follow through on the downside after an early rally failure indicated the persistent buyers are still there anxious to use dips in the market to keep accumulating stocks.
Yesterday, I said that the bulls needed to run the DJIA back up across 15,220 (S&P 500: 1,643 in order to regain control. The DJIA got to 15,254, but the S&P only to 1,640. It was a marginal win for the bulls but not a rout.
The Street will be watching the reports on the economy released this week for clues to the timing of any changes to Fed policy. Bad news would be good news and good news bad !!
Resistance now starts at 15,328 (S&P 500: 1,6547)
Support: DJIA15,165 (S&P 500: 1,629)
Investor’s first read – an edge before the open
DJIA: 15,254.03
S&P 500: 1,640.42
Nasdaq Comp.: 3,465.37
Russell 2000:990.53
Tuesday, June 4, 2013 (9:13 a.m.)
NOTE: I am considering adding stocks to this blog, but haven’t decided on a format.
Apple (AAPL: $450.72)
AAPL found support at $442.48 and quickly rallied for a marginal gain for the day to retain a positive tone. Support is $443, resistance starts at $455.
FACEBOOK (FB – $23.84)
Looks like FB is testing its $23.26 (May 31) low. Stock needs some big buying to overcome resistance at $25. The $19 – $22 area represents major technical support and it just may test that where it would become technically attractive. That said, the pros may opt to jump the gun and buy ahead of any attempt to drop to, or below< $22.
ECONOMY:
We have a full docket of economic reports this week. For access to information including charts and graphics go to www.mam.econoday.com .
TUESDAY
Motor Vehicle Sales – Projection total U.S. Int’l: 15.2 mil rate
International Trade (8:30) Projection -$41 billion
WEDNESDAY:’
ADP Employment Rept. (8:15) Projection 171,000 new jobs
Productivity and Costs (8:30)
Factory Orders (10:00) Projection +1.4%
ISM Non-Mfg. Ix. (10:00) Projection 53.8
Beige Book (2:00 p.m.)
THURSDAY:
Jobless Claims (8:30) Projection – 10,000 to 345,000
FRIDAY:
Employment Situation (8:30)
Projection Nonfarm 167,000
Private payroll 178,000
Unemployment rate 7.5%
Consumer Credit (3:00 p.m.) +14 billion
George Brooks
“Investor’s first read – an edge before the open”
[email protected]

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The writer of Investor’s first read, George Brooks, is not 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. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.