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Countdown Starts Tuesday – What to Expect

The stock market rose briskly yesterday  in response to reassuring Q2 GDP and Jobless Claims numbers, as well as the fact many stocks were short-term oversold.  It was not a “Syria

The stock market rose briskly yesterday  in response to reassuring Q2 GDP and Jobless Claims numbers, as well as the fact many stocks were short-term oversold.  It was not a “Syria solution” rally that I warned not to chase.

   That may yet come. I don’t like buying “gap” opens, too often the price paid is the high for the day, so beware Tuesday.

   Tuesday begins the September countdown to the FOMC meeting ending on the 18th when Fed chief Bernanke holds his press conference and we all find out whether the fed will begin its taper and for how much for openers.

   While the market may rally if taper is delayed, the rally is suspect, since taper uncertainty would continue and we still have the divisive debt limit debates to deal with.

   I see the  possibility of a great buying opportunity shaping up in October/November just in time for the beginning of the “Best Six Months” for owning stocks.*

   If taper begins in September, the issue  as a concern is not over.  This is all about a change in Fed policy and what that means three to six months down the road.


I have been looking for DJIA 14,250 (S&P: 500: 1,542) by October.  That’s not far off.  Along the way, DJIA 14,590  (S&P 500: 1,600) should provide some support. Yesterday’s rally was not impressive, though Nasdaq gave a better account of itself.

Look for selective buying today, but restraint since a Syria decision is possible.

    St. Louis Fed’s James Bullard speaks at  9 o’clock this morning. His comments may impact stock prices, especially if he hints the Fed will delay taper.

Investor’s first readan edge before the open

DJIA:  14,840

S&P 500: 1,638

Nasdaq  Comp.:3,620

Russell 2000:  1,028

Friday, August 30, 2013     (8:55 a.m.)



The following are observations based solely on technical analysis and don’t give consideration to fundamentals or changes in brokerage ratings which can  have an immediate impact on stocks, justified or not.  The idea here is to give readers insight into the likely trends and turns in the stock’s price, short-and long-term.

   I picked up on AAPL and FB last year when they were in a tailspin, and  picked up on IBM, Pulte, First Solar, Target, and Hewlett-Packard recently for the same reason. These are not  buy or sell recommendations, and are not stocks I have recommended.

NOTE: Expect  support and resistance levels to change more frequently under adverse  and uncertain conditions  like those we are experiencing presently..

   WARNING: This market  is highly “news sensitive,” with everything at the present negative. Any break for the better in the mid-East, taper, or in the threat of a government shutdown in October will trigger a rally, especially in stocks below, since they have been hammered already.

  Apple(AAPL: $491.70) 

Note: Bottom was targeted at $385 the turn around  Apr. and Jun. 2013 (double bottom). This is a follow up.

Pattern: Positive, consolidating recent up move.

Resistance: $495

Support:  $487 – 489  – AAPL still in consolidation and probing for a level that discounts new negatives in overall market. Icahn must like this.   Can’t get in his head, but I’d guess he’ll nibble a shade below $490, which I am upgrading here.

  Facebook (FB – $41.28 )

Note: Bottom was targeted below $18 for a turnaround Sept. 2012, this is a follow up.

Pattern: Positive –

Resistance: $41.67

Support: $41 Buyers at the open yesterday reinforces positive pattern, chances of a bump to $44.75 better than even.

  IBM ($ 182.64)  No change

Note: Started coverage  Aug. 7, 2013 after big plunge in stock

Pattern: Negative

Resistance:  $183.20                                       

Support:  Got down to my target on of $181. Got buyer at $181.50 early in the day and again at close at $182.50.   A turning pattern may be forming..  Be aware that IBM has ranged four times up and down between $185 and $215 over the last two years.  Unless the fundamentals are horrendous  it is due for institutional buying, most likely in this area and possibly at or a smidge below $180.

Right now, there are sellers that must be taken out.

Each point up or down impacts the DJIA by about 13 points.

  PulteGroup (PHM- $15.86 ) 

Note: Started coverage Aug. 12, 2013

Pattern: Neutral

Resistance: $16.70

Support:  $15.35 (new)  Yesterday’s strength suggests a drop to $14 is less likely,  however, the price of lumber is dropping – not a good sign and mortgage rates at two-year high. Looks like I was wrong about $14 by this weekend.  Its strength defies   the industry problems.

First Solar (FSLR:$37.52)

Note: Started coverage: Aug.: 22, 2013

Pattern: Negative, but improving thanks to buying yesterday.

Support: Got some buying  at $36.85 yesterday. Trying to turn the corner. Needs big volume push across $37.80

Target (TGT:63.27)

Note: Started coverage Aug: 22, 2013:

Pattern: Negative

Resistance: $63.25

Support: $61.20

Stock needs big buyer or it is headed for $61 – $62.  TGT’s drop from $73.50 is unnerving and may suggest the consumer is temporarily tapped out.

Hewlett-Packard (HPQ:22.52)

Note: Started coverage Aug. 23, 2013

Pattern: Negative, probing for comfort level

Resistance: $22.85. 

HPQ looks like it can hold in this $22 – $23 area.  $19.85 is possible in a bad market.

eBay (eBay:50.99)   Yesterday’s action positive, though volume lacking

Note: Started coverage Aug. 28, 2013

Pattern: Neutral/bearish but improved based on yesterday’s action

Resistance: $53

Support:  Rises to $50.55.  Base support is in process of forming.  Stock should get a buyer in here as it has on five occasions when it ranged between $50 and $58 this year. If that happens, the intensity of that rally must be studied.  Failure to develop heavy volume suggests a break below $50 and drop into the mid-40s.  If there are bulls out there, they should find this price attractive and make their move. If  $50 isn’t attractive, the stock has a big problem.  (AMZN: 283.98)

Note: Started coverage Aug. 28

Pattern:  Bullish, but correction must find support soon

Resistance: $287

Support:  Support now $280.  $268 – $272  is possible in a bad market.

 I do not own, nor am I short  AAPL, FB, IBM, PHM, FSLR ,TGT, HPQ, EBAY, AMZN.


Heavy schedule this week, also speeches by Federal Reserve  officials


   For a detailed account of past and current economic reports, including charts go to: –


Durable Goods (8:30)  Down 7.8 pct vs. projection for a 4.0 pct decline, Ex transportation was a drop of 0.6 pct.

Dallas Fed Mfg (10:30)   August index dropped to 7.3 from 11.4.  New orders were 5.4 vs 10.8.


ICSC Goldman Store Sales (7:45)   Index rose 0.2 pct for week ended 8/24

S&P Case-Shiller Home Prices (9:00)  June  +12.07 pct. y/y vs. +12.20 pct May

Consumer Confidence (10:00)  August index better than expected at 81.5 vs. 81.0 July

Richmond Fed Mfg. Ix. (10:00)  Up big in August with index plus 14  from a   minus 14  July.  New orders index  plus 16 vs. minus 15


Pending Home Sales (10:00)  July down 1.3 pct. vs. drop of 0.4 pct June


Q2 GDP (8:30)  +2.5 pct. at annual rate. Comparisons affected by annual revision

Jobless Claims (8:30)  down 6,000 to 331,000 for week ended 8/24 vs. 336,000 for prior week.

Corporate Profits (8:30)   Q2 rose 3.9 pct q/q after a negative Q1

Bloomberg Consumer Comfort Ix. (9:45)  No proj.

Fed’s Jeffrey Lacker speaks (2:00)

Fed Balance Sheet (4:30) Proj.:

Fed’s James Bullard speaks (7:45 p.m.


Personal Income/Outlays (8:30) Proj.:  Jul. PI +0.2 pct., Expenditures +0.3 pct

Fed’s James Bullard speaks 9:00) 

Chicago PMI (9:45) Proj.:  Aug. index 53.0  vs. 52.3 Jul.

Consumer Sentiment (9:55) Proj.:  Aug. index   80.0


Aug 27  DJIA  14,946  “No Quick Solution for Market’s Negatives – DJIA 14,250 ?

Aug 28  DJIA  14,776  “What Now for AAPL, FB, AMZN, FB, IBM, HPQ, etc. ?”

Aug 29  DJIA  14,824  “Don’t Buy the Syria Solution Rally?

·         Stock Trader’s Almanac  – New edition should be out now or shortly.

  George  Brooks

“Investor’s first read – an edge before the open”

[email protected]


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. Brooks may buy or sell stocks referred to herein.