December's Two Dilemmas - Watch Your Back

George Brooks |

   Investors face two dilemmas in December.  One, the holiday season is a big distraction – shopping, travel, parties, etc. It’s too easy to take your eye off the ball.  Two, there are a lot of crosscurrents underway as the year ends – tax selling (losses, gains), institutional portfolio adjustments (hide losers from year-end statements, plug in winners).

  December has always been a tough read. This year is complicated by the fact the S&P 500: is ahead 26% this year, and 170% since the bull market got liftoff  March 6, 2009. 

  What can this market do for an encore ?

  Convention says – higher, because we really haven’t seen the traditional runaway speculation that is present at market tops. What’s more, the “public” has only recently become interested in stocks.

  I’ll buy that, but  somewhere out there, most likely in Q1, is a correction (8% - 10%).

   Most 2014 forecasts will be bullish, watch your back.

TODAY:

   The S&P 500 hit my support level for the of 1,780  on the nose but the DJIA bounced a bit above my target of 15,730. The rebound was most likely in response to good economic news on jobs and new home sales.

   We will know more about a Fed taper after its December 18 meeting. I don’t see the bulls front running that event too aggressively.  Odds favor a mixed market – volatility.

   Support is DJIA: 15,815 (S&P 500: 1,783).

Investor’s first reada daily edge before the open

DJIA: 15,889

S&P 500: 1,792

Nasdaq  Comp.4,038

Russell 2000:  1,121

Thursday, Dec. 5, 2013

   NOTE:  Anyone seriously interested in a  very heavy, but very readable monthly analyses of the economy and financial markets should subscribe to A. Gary Shilling’s “INSIGHT.”  This is super crunching, but a MUST read. No punches pulled, but  not always the best bedtime read.

  Most honest analyst in the investment business.  Well, OK, that really isn’t a big compliment. Let’s say, just a refreshingly honest, straight shooter with an excellent staff.  Web: agaryshilling.com. Ph: 973-467-0070.

TIMING – OPPORTUNITY STOCKS 

   The following are based on technical analysis only and  are not to be taken as buy or sell recommendations, but as one of many factors that must be considered in the decision process. Comments do not take into consideration earnings reports, or changes in institutional ratings, company guidance. Technical analysis is based on one’s interpretation of  the impact buying and selling have on the price of a stock and is therefore not an exact science. News and events can change an interpretation instantly. 

Apple (AAPL: $565.00) Positive.

Big News out of China as AAPL iPhone is cleared for marketing to its 759 million subscribers. $600 ?

Facebook (FB:48.62)  Positive

Needed a move across $48 to validate  recent bottom and set the stage for a renewed up move and got it yesterday. Stock can now start working its way up to the low 50s, though it will encounter sellers along the way, especially profit-takers who bought it before its breakout at $27 in late July.

IBM (IBM: $176.74)  Neutral

No change: IBM is still struggling with an irregular base. Selling just too much. Without serious buying, IBM will test 52-week low of $172.16. Breaking that takes IBM into the $160s.  That’s a stretch. Odds favor a buyer above $174.

 Pulte Homes (PHM: $18.43)  Positive

While PHM got a big boost from  Fed Vice-Chair Janet Yetten’s assurance the Fed will continue to accommodate the economic recovery and especially housing, the industry must now demonstrate it can gain traction. That may be in the works with the big jump in October’s New Home Sales. Support at the $18 level held yesterday supporting a nice bounce. Support is $18.25, resistance beyond $18.60 is formidable.

First Solar (FSLR:60.80)  Positive

Rebounded sharply yesterday indicating it is ready to renew its upward march. Support is $60.30, resistance $61.50l

Nike (NKE:$78.82) “the inchworm”  Positive 

Some profit-taking showed up in recent days. Support is $78.25. Crossing $79.25 improves its pattern and sets the stage for higher prices.

Hewlett-Packard (HPQ: $28.13)  Positive

Another breakout.  Support is $27.95. Move across $28.50 improves chances of the low $30s.

Polaris Inds. (PII:133.88)  Positive

No Change: Positive consolidation pattern . Acts like it wants to break out above $135 and run.  Yesterday’s market action was bullish suggesting a move across $135 and possibly a new 52 week high above $137.

Amazon (AMZN: $385.96) Positive

Firmed up yesterday, but not on heavy volume. Needs a move across $390 to renew uptrend.

Pandora Media (P:29.41) Positive.

Break above $29 opened the door for $30 +.

THE ECONOMY:  HUGE !

Prior to Vice Chair Janet Yellen’s Senate Banking Committee confirmation hearing  last week, there was a concern for an early taper.  Her testimony seemed to assure the Street  that the Fed will continue to accommodate the economic recovery if she becomes chairman. 

  But the Street is once again worried about an early Fed taper, and this week’s economic reports may just raise its concerns to a higher level.

For detailed analysis of both the U.S. and Foreign economies along with charts, go towww.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.” HOWEVER: this site will not post data and charts for the Thanksgiving Day week electing to take a week off. The calendar below is current.

MONDAY:

PMI Mfg. Ix. (8:58) November index rose to 54.7 from 51.4 October

ISM Mfg. Ix. (10:00) Index rose to 57.3 from 56.4

Construction Spend (10:00) Overall spending in October was up 0.8 pct vs. gain of 0.3% September. Data may be affected by the shutdown

TUESDAY:

ICSC Goldman Store Sales ((7:45) Down 2.8 pct. for week 11/30

WEDNESDAY:

ADP Employment (8:15) 215,000 private sector jobs were added in November, well above forecasts for 170,000.

International Trade (8:30)October trade gap improved due to rising exports. The gap narrowed to $40.6 billion from $43.0 billion

New Home Sales (10:00) Two reports yesterday due to shutdown delays. September New Home Sales dropped 6.6 pct.,  however, October sales jumped 25.4 pct.

ISM Non- Mfg. Ix. (10:00) The index slipped to 53.9 in November from 55.4.

Fed Beige Book  (2:00)

THURSDAY:

GDP (8:30)

Jobless Claims (8:30)

Factory Orders (10:00)

FRIDAY:

Employment Situation (8:30)

Personal Income/Outlays(8:30)

Consumer Sentiment (9:55)

RECENT POSTS - 2013

Nov 6  DJIA   15,618   “Bulls Hold the Edge, But What About Interest Rates ?

Nov 7   DJIA   15,747  “Early Profit Taking or Warning of a Correction ?”

Nov 8   DJIA   15,593  “Time for the Street to Get Off the Fed Teat”

Nov 12 DJIA   15, 761 “The Economy, Interest Rates, The Fed, Stock Market”

Nov 12 DJIA  15,783   “Get Ready for Year-End Cross Currents”

Nov 13 DJIA  15,750   “Money Manager Dilemma – Your Problem, as Well

Nov 14 DJIA  15,821   “Feeding Frenzy in 2014’s Winners ? Big Day for “TECH  

                                       WATCH” Stocks”

Nov 15 DJIA 15,876   “Yellen – No Taper – Surprise January Correction ?

Nov 18 DJIA  15,961  “Green Light to Load Up on Stocks ?

Hospital

Nov 25 DJIA  16,064  Fetch the Blinders – Here come the forecasts

Nov 26 DJIA  16,072   Time to Shop for New Winners and Old Winners Getting  

                                     Whacked by  Profit-Taking”

Nov 27 DJIA16,072   “December Head-Fakes Galore – Raises Risks”

Nov 29 DJIA 16,097  “Stock Market Bubbles Don’t Pop to a Full House”

Dec 2   DJIA 16.086  “Serious Stuff Coming This Week and Next”

  George  Brooks

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

sensiblesleuth@gmail.com

*STOCK TRADERS ALMANAC: The new annual Stock Trader’s Almanac  is off the press.  This is a “must,” always has been, if you are a serious  investor, or intend to be a serious investor. Visit stocktradersalmanac.com for details

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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. Brooks may buy or sell stocks referred to herein.

 

 

 

 

 

 

 

 

 

 

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