Monday, September 29 , 2014 9:13 a.m. BEFORE the OPEN
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Last week featured a tug of war between bulls and bears that resulted in wide down-up-down-up swings in stock prices suggesting strong, but not decisive, opinions about which way stock prices were likely to go in coming days/weeks.
Based on pre-market trading of stock-index futures, the market will open lower today, however, what’s important is how it closes.
This is war, and the sides are equally balanced. The market is not over priced, nor is it underpriced.
There are a host of negatives. In addition to the Russia/Ukraine and ISIS crisis, the Street is faced with an economic slowdown in Asia and Europe, both potential kickers for the U.S. economy.
The stock market has risen over the years in face of greater adversity. The difference is stock prices are more vulnerable now hovering close to all-time highs after a 197% bull market surge in the S&P 500.
Q3 earnings will begin to hit the Street in coming weeks. More importantly, projections for earnings in Q4 and 2015 will soon enter into Street valuations.
Bottom line: Uncertainty.
TODAY:
Last Thursday and Friday’s lows will be tested today (DJIA 16,948, S&P 500: 1,965, Nasdaq Comp.: 4,466). A powerful reversal today gives the Bulls a leg up.
Failure to rally, worse yet a break below last week’s lows, suggests more downside.
This is a dangerous market. Buyers risk seeing stocks going sharply lower after buying– sellers risk seeing stocks sold going higher.
If the bulls are loaded for bear, they will reverse the weakness at the open and run the table. They have been set back on their heels twice during the last four trading days, only to charge back. They will be tested once again today, this will be a goal line stand – very important.
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Investor’s first read– Daily edge before the open
DJIA: 17,113
S&P 500: 1,982
Nasdaq Comp.:4,512
Russell 2000: 1,119
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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS (9/25 close)
By technically analyzing each of the 30 Dow industrials then using the Dow “divisor” to convert the data back into the DJIA, I can get a better read on what is happening internally. I seek three results – a near-term resistance level, and a primary support and a secondary support.
As of the 9/25 close: Resistance 17,141; Primary Support: 16,746; and Secondary Support: 16,454.
The resistance and support levels listed daily may differ, since they are shorter term.
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INTERNATIONAL TENSIONS:
Ukraine/Russia – quiet for now, but has the potential to get uglier.
ISIS/Iraq/Syria – A Euro/Mid-East coalition has formed to counter ISIL. A full-blown bombing mission has been undertaken, which stands to be ongoing. Psychologically, that stands to play well in America, which has been warned of future terrorist activity. The possibility of a major war resulting must be considered.
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THIS WEEK’s ECONOMIC REPORTS:
Big week for economic reports. 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.”
MONDAY:
Personal Income/Outlays (8:30):
Pending Home Sales Ix. (10:00):
Dallas Fed Mfg. Ix. (10:30):
TUESDAY:
ICSC Goldman Store Sales (7:45):
S&P Case Shiller Home Prices (9:00):
Chicago PMI (9:45):
Consumer Confidence (10:00):
State Street Investor Confidence Ix. (10:00):
WEDNESDAY:
MBA Purchase/Refi Apps (7:00):
ADP Employment Rpt (8:15)
PMI Mfg. (9:45):
ISM Mfg. Ix. (10:00)
Construction Spend (10:00):
THURSDAY:
Jobless Claims (8:30):
Factory Orders (10:00):
FRIDAY:
Employment Situation (8:30):
Int’l Trade (8:30):
PMI services (9:45):
ISM Non- Mfg Ix. (10:00)
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RECENT POSTS:
Sept. 18 DJIA 17,156 Will BIG Money Sell Into Strength ?
Sept. 19 DJIA 17,265 Alibaba Frenzy – a Sell Signal ?
Sept. 22 DJIA 17,279 Another Test for the Bulls
Sept. 23 DJIA 17,172 Rally Now Would Be Risky
Sept, 24 DJIA 17,055 Critical Crossroads for Money Managers
Sept. 25 DJIA 17,210 Back to Tug of War – Bulls vs. Bears
Sept 26 DJIA 16,945 Moment of Truth for Market’s Direction
*Stock Trader’s Almanac
A Game-On Analysis, LLC publication
George Brooks
“Investor’s first read – a daily edge before the open”
Investor’s first read, is a Game-On Analysis,LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is 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. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. 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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