Easy Does It! Some Selling Into Good News Expected

George Brooks  |

Investor's first read  - Brooksie's edge before the open

Monday, February 13, 2012        9: 01 a.m.

DJIA: 12,801.23     S&P 500 1342.64

Don’t be surprised if the market doesn’t surge after the weekend announcement  that Greece has agreed to the terms of the bailout.  The fact it did not drop on Friday in face of doubts about an agreement, and before a weekend, indicated, the Street  expected an agreement, myself included.

Nevertheless, we’ll take it.

The doomsters will counter, saying “Yes, Greece’s government  has accepted strict austerity measures, but those will penalize growth.  What’s more, what about Italy, and Spain, aren’t they vulnerable, as well ?

They’re right, but is punishing growth anywhere as bad as a default ?  And to what extent doesn’t  averting default in Greece boost confidence that default in other troubled countries can be averted ?

Bottom line, the doomsters  stand to benefit from everyone’s else’s demise – nothing personal, it’s “business” !   One of the first lessons I learned in this business is, watch your back and relentlessly scrutinize  the reasons for your  position. Are you bullish because you are intense on making money ?  Are you bearish for reasons other than pragmatic assessment of stock values, the economy and political scene.

IMHO, TV and print news was  excessively negative on the stock market prospects in the early months of this bull market in 2009 and I think it all had to do with their distain for President Obama.  Also IMHO, their editorializing discouraged a lot of investors from buying, perhaps encouraged them to sell prior to an outstanding rebound. SHAME on you guys !!

They did a disservice to their viewers/readers.  An individual can do a disservice to themselves if they have this kind of tunnel vision.

CONCLUSION:  So, do traders sell into the good news today ?  There will be some of that after an opening rally.  Good news is the market rebounded from my support levels Friday and never returned, not even late in the day, which I think was justified.

Resistance starts at  DJIA 12,895 ( S&P 500: 1358). Support is DJIA 12,775 (S&P 500:  1340).

Stepping back to look at a bigger picture, the market has had  an uninterrupted  13% upmove since mid-December and twice that since early October, so some sideways action here would be normal where traders lock in some profits and move on to new opportunities, providing a continuing flow of  opportunities, though one’s that require good timing of entry and exit.


This will be a busy week for economic reports, what’s important is that there is no serious evidence of slippage in the U.S. economic recovery, which is one of the key reasons for the stock market’s recent strength.

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Recent Posts:

Jan 23 DJIA: 12,720 "Europeans Seeking Long-Term Economic Cure"
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Feb. 1   DJIA: 12,632 "Week’s Economic Reports Could Be The Springboard"
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Feb. 9   DJIA: 12,890  "BIG Money Buying the Future"
Feb. 10   DJIA: 12,801  "Can a Greek Deal Be Accomplished Over the Weekend?"

George  Brooks


**National Journal


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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