Investor’s first read– a daily edge before the open
DJIA: 15,914
S&P 500: 1,795
Nasdaq Comp.4,037
Russell 2000: 1,125
Wednesday, Dec. 4, 2013
This morning’s ADP Employment report showing 215,000 jobs added in November was significantly greater than Reuters forecast for an increase of 173,000. The Employment Situation report comes at 8:30 Friday. The 10-year Treasury note continues to edge up and was 2.83% this morning.
Surprisingly, futures trading did not react to the downside in pre-market trading, since good employment numbers only increases fears of an early taper.
This is DECEMBER market activity, a tough read since year-end portfolio adjustments by institutions and individuals tend to distort normal trends in stock prices, i.e., stock you think should be going up, go down, and stocks you don’t think should go up, rise.
Many of the latter were underperformers during the year, dumped beyond reason at year-end and simply rebound in December when the “dumping” abates.
The Stock Trader’s Almanac has pioneered research on this phenom for decades.
I can’t condense its studies here with limited time and space. It keeps readers current on seasonalities at www.stocktradersalmanac.com. I suggest you own this publication.
TODAY:
Now that we have dismissed the round numbers (DJIA 16,000 and S&P 500:1,800) as a lot of crap, the market can adjust to year-end crosscurrents, taper talk and New Year Forecasts, and find a comfort level in coming weeks. Volatility will rule, but I see a risk of DJIA 15,730 (S&P 500: 1,780) this week.
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: $566.32) Positive.
If there is profit-taking, it was all consumed yesterday as buyers reversed Monday’s sell off. Support $560.
Facebook (FB:46.73) Positive
Needs a move across $48 to validate recent bottom and set the stage for a renewed up move.
IBM (IBM: $176.08) Neutral
No change: IBM is still struggling with an irregular base. While it briefly broke support at $177, it looks like a buyer showed up late yesterday to hold the line and possibly stabilize the stock.
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. Should hold above $18. Actually acts well considering the uncertainty plaguing the housing industry.
First Solar (FSLR:59.62) Positive
No change: Tried to run at the open Friday, but a seller stopped it in its tracks. Pattern is still positive. Support is $59.60, Resistance $61.40
Nike (NKE:$79.13) “the inchworm” Positive
Some profit-taking showed up Friday and again Monday to interrupt NKE’s steady inch-by-inch rise. But in spite of a weak market yesterday, NKE firmed up. Should inch ahead today.
Hewlett-Packard (HPQ: $27.50) Positive.
Another breakout. Can cross $28 with just a little help from the overall market.
Polaris Inds. (PII:133.26) Positive
No Change: Positive consolidation pattern . Acts like it wants to break out above $135 and run. But a seller came in to block a breakout and PII has been struggling to move higher. A bounce is likely, but resistance is now $134.
Amazon (AMZN: $384.66) Positive
Ran into some selling yesterday, probably reflecting mixed reviews on retail sales over the Thanksgiving holiday and profit-taking. New support is $383. Breaking that takes it to $379.
Pandora Media (P:28.27) Positive.
This stock has lovers and haters and its volatility reflects it. Break above $29 opens the door for $30 + but first it may drift to $27.30.
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)
New Home Sales (10:00)
ISM Non- Mfg. Ix. (10:00)
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”
*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.
