Outta my way ! Money managers are scrambling to buy, the individual investor is not far behind. Days like Tuesday ( DJIA +60) and Wednesday (+128), can be a sinking feeling for Investors with loads of cash or heavily invested in bond funds.
Did you miss your last chance to buy ?
No, this bull has room to run. New leaders will surface, old leaders will correct as investors take profits and look for other scores.
While no correction appears to be in sight, that in itself should be a warning sign, not to reach for too much. A correction will develop when least expected.
What’s the message here ?
DON”T PANIC !
When a market presses up without a correction, investors tend to feel pressures to go all-in. One of the biggest contributors to an ill-timed investment is buying because one thinks they will miss a move. It is a decision that is not made on the investor’s terms, but one driven by emotions.
One tactic that allows an investor to get on board, reduces panic, but also reduces the risk of getting bagged by a correction, OR A PLUNGE IN A STOCK BECAUSE ITS Q 1 EARNINGS DISAPPOINTED THE STREET, is to buy a portion of what an investor plans to own, then pause before buying more. If it drops, buy more, it it runs, move on to another stock, but paying-up is risky.
Q1 earnings reports can hurt. If a company fails to “beat” projections by “enough,” a stock can be hammered. While guidance and projections are generally low-balled, the Street has no mercy.
Investor’s first read – an edge before the open
DJIA: 14,803.24
S&P 500: 1,587.73
Nasdaq Comp.: 3,297.25
Russell 2000: 946.09
Thursday, April 11, 2013 (7:29 a. m.)
NOTE: My post will be released early today and not include the impact of news after 8:10 a.m., nor will it be based on stock-index future activity before the open.
SEQUESTER: I’m keeping this posted so you don’t forget the market may begin to worry about its impact.
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: $435.69)
AAPL broke out above resistance at $428 yesterday, turning its pattern from a weak positive into a positive. It held above $419 on Mar 4 and again on April 5, and now has a shot at being a double bottom and final turning pattern for this battered leader. Support is $432, resistance is $437. Breaking that on the upside, AAPL can get to $445, near-term.
I am not long or short AAPL.
FACEBOOK (FB – $27.57)
With the help of a strong market, FB broke out of its consolidation yesterday on a nice increase in volume. Support now moves up to $27.30. Resistance is $27.80. That’s where it ran into a wall four days ago. It should be able to get across $28 today.
Between Aug. and Dec. last year, a trading range between$18 and $24 developed. That should provide support for FB and a buying opportunity. That’s where a three month tug of war took place between the believers and non-believers.
I am not long or short Facebook.
ECONOMY:
This will be a light week for economic reports.
But the Street is heartened by favorable economic data on employment, personal income, consumer sentiment, auto sales construction spending, durable goods manufacturing, and housing.
I am going to list the economic reports below but will not include the numbers from the last report, since those numbers are often revised significantly and therefore are potentially misleading.
I strongly urge you to access the website: www.mam.econoday.com for detailed reports on this week’s calendar and an excellent recap (plus graphs) of last
week’s reports. The site does a great job graphically illustrating key indicators.
THURSDAY:
Jobless Claims (8:30)
Import/Export Prices (8:30)
FRIDAY:
Producer Price Ix. (8:30)
Retail Sales (8:30)
Consumer Sentiment (9:55)
Business Inventories (10:00)
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.
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