Producer Prices come at 8:30 and the Housing Market Report at 10 o’clock Tuesday, Consumer Prices and Housing Starts at 8:30 Wednesday, Jobless Claims at 8:30, Existing Home Sales, the Philly Fed (business conditions) Survey and Leading Economic Indicators at 10 o’clock Thursday. I checked two sources and nothing is scheduled for Friday.
Nothing has changed over the weekend. It looks like institutions would like to buy more aggressively, but have been burned too often by delays in Europe to formulate a plan to address bank and debt issues there that threaten to plunge the region into a recession. It appears that the U.S. will avoid a recession. Stocks sport attractive valuations, and there is simply no attractive investment alternative to buying stocks assuming a major decline is not imminent.
The fact we have just had an uncorrected 9% run up in prices adds some risk for new buying. Two attempts to pull back failed to attract followers last week suggesting there are buyers on dips. The DOW, S&P and Nasdaq have rallied into the upper limits of the trading range that has contained stock prices for two months, but have done so on only moderate volume (not good).
Support looks good at DJIA 11,200 (S&P 500: 1150). Buying at this point stands to be selective and may NOT be reflected in the market averages.
The tone of the market has improved vs the preceding five rallies within this trading range.
It is important to understand this market CANNOT afford any turn for the worse in Europe or in our economy’s attempt to stabilize.
The SuperCommittee has been lost in the shuffle, upstaged by international financial worries and the state of our economy here at home. Nevertheless, it will raise its ugly head to remind us whether our government is, or is not, dysfunctional.
12-member SuperCommittee timeline:*
Oct. 1- Dec. 31: Both houses of Congress must vote on a Balanced Budget Amendment.
Oct.: 14: Deadline for House and Senate Standing Committees to submit recommendations.
Nov. 23: Deadline for both houses to vote on a plan with a 10-year deficit reduction goal of $1.5 trillion Dec. 2: Deadline for committee to submit report and legislative language to President Obama andCongress.
Dec. 23: Deadline for both houses to vote on committee bill.
Jan. 15, 2012: Date that the “trigger” leading to $1.2 trillion of future spending cuts goes into effect if
the committee’s legislation has not been enacted.
Feb. 2012: Approximate time when first $900 bn of debt ceiling runs out.
Feb./Mar.2012: Deadline for Congress to consider a resolution of disapproval for the second tranche
($1.2 – $1.5 trillion) of debt limit increase.
Fall/Winter 2012: When additional $2.1 – $2.4 trillion of borrowing authority from this law runs out.
Jan.2, 2013: OMB orders sequestrations for defense and non-defense categories of spending necessary
to meet spending cuts required by the “trigger.”
Recent blog headlines:
Sept. 22, DJIA: 11,124 “Opportunity to Follow Wrenching Probe for a Bottom – Dow 9,680 ?”
Sept. 23, DJIA: 10,733 “Don’t Buy a Bounce Fueled By Reassuring Statements”
Sept. 26, DJIA: 10,771 “Stock Market Bottom Here – Premature”
Sept. 27, DJIA: 11,043 “Market Bottom Needs More Time”
Sept. 28, DJIA: 11,180 “Getting Close to a Breakout (UP or Down) From Two-Month Trading Range”
Sept. 29, DJIA: 11,010, “Approaching Consolidation Crossroads – Up ? or Down ?”
Sept. 30, DJIA: 11,153, “Bulls Need a Big Day, or Else”
Oct. 3, DJIA: 10,913, “Almost Ugly Enough for a Buying Juncture”
Oct. 4, DJIA: 10,654, “ Marching to Europe’s Drumbeat – October Opportunity Looming”
Oct. 5, DJIA: 10,808, “ News Whipsaw Becoming Problem for Bottom Watchers”
Oct. 6, DJIA: 10,939, “Rally Entering Area of Resistance. Euro-Rally a Fake out”
Oct. 7, DJIA 10,939 , “ Traders’ Sell – Investors – Defer Purchase”
Oct. 10, DJIA: 11,103, “Euro-Fog Lifting – Street Looks to Q3 Earnings”
Oct. 11, DJIA: 11,433, “Easy Does It – Market Needs BIG Buying to Advance From Here”
Oct. 12, DJIA: 11,416, “Looking Beyond This Mess”
Oct. 13, DJIA: 11,518, “180-Degree Change in Expectations – No Room for Surprises”
Oct. 14, DJIA: 11,478, “Europe Still the Key – Q3 Earnings Run a Close Second”
George Brooks
*Stock Trader’s Almanac – Get it ! Hot off the press. I have received this invaluable compendium of savvy since 1968.
For more info, go to: www.stocktradersalmanac.com
**National Journal
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The writer of Brooksie’s Daily Stock Market blog, 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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