Thursday, October 30, 2014 9:12 a.m. DAILY BEFORE the OPEN
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Daily:Boiling down fundamental, technical, economic,
monetary, fiscal, psychological, and seasonal data into a quick read.
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TODAY:
Pre-market trading suggests the Street is accepting the Fed’s decision to end bond purchases, having had 10 months to adjust to the idea. Then too, the market has recouped much of the 9% it lost in September/October, so some selling would be reasonable.
I really think investors will need to let the market tell them what the Street and its computers think. A “relief” rally is possible.
The focus will now turn to speculation about interest rates. While the economy and stock market should be capable of co-existing with slightly higher rates, it’s what happens after the initial bump up that will concern the Street.
SUMMARY:
One “blankie” gone, one to go.
The Street’s angst over the end of Fed bond purchases now yields to angst over the timing of a rise in interest rates.
This fear will create more volatility, since a rise in interest rates is perceived as potentially more destructive to the economy and stock prices than the ending of Fed bond purchases, which few investors understood in the first place.
It often takes a day or two for Wall Street’s computers and execs earning the big bucks to make a move after big news.
Reading their minds isn’t easy. If they bought in response to the comment made October 16 by James Bullard, president of the St. Louis Fed, that the Fed could extend bond purchases beyond the October deadline, shouldn’t they be selling now that the Fed didn’t ?
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Investor’s first read– Daily edge before the open
DJIA: 16,974
S&P 500: 1,982
Nasdaq Comp.: 4,549
Russell 2000:1,146
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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS (10/28 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 primary support and a secondary support.
As of the 10/8 close: Resistance 17,409; Primary Support: 16,880; and Secondary Support: 16,820.
NOTE: These calculations generally hold for longer periods of time, but need to be changed when the market is hit with excessive volatility.
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 good possibility of a major war resulting must be considered.
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THIS WEEK’s 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:
PMI Services –flash (9:45): Oct. index was 57.3 down from 58.9 in Sept.
Pending Home Sales (10:00): Up 0.3 pct. in Sept. vs. down 1.0 pct. Aug.
Dallas Fed Mfg. Ix. (10:30): Index slipped to 10.5 in Oct. from 10.8 in Sept.
TUESDAY:
FOMC Meeting begins
ICSC Goldman Store Sales (7:45): Up 0.3 pct. in 10/24 week; Year/year +2.8 pct.
Durable Goods (8:30): Down 1.3 pct. in Sept. after drop of 18.2 pct. Aug. Ex-Trans +3.3 pct. vs. +8.7 pct. Aug.
S&P Case Shiller Home Price (9:00): Down 0.1 pct. Aug. vs increase of 0.1 pct. Jly.
Consumer Confidence (10:00): Index for Oct. is up to 94.5 from 89.0 in Sept.
Richmond Fed Mfg Ix. (10:00): Index for Oct. is 20 vs. 14 in Sept.
WEDNESDAY:
MBA Purchase Apps (7:45): Apps down 5.0 pct. ; Refi’s down 7.0 pct. in 10/24 week.
FOMC announcement (200): No press conference scheduled (yet)
THURSDAY:
GDP: Q3 (8:30): 3.5% after 4.6% (revised) in Q2
Jobless Claims (8:30): Up 3,000 to 287,000 in 10/24 week
FRIDAY:
Personal Income/Outlays (8:30):
Chicago PMI (9:45):
Consumer Sentiment (9:55):
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RECENT POSTS:
Oct. 16 DJIA 16,141 Rally Today Off Wednesday Lows Risky
Oct. 17 DJIA 16,117 What If the Fed Doesn’t Delay Taper ?
Oct. 20 DJIA 16,380 Critical Week for Bulls
Oct. 21 DJIA 16,399 Market Attacking Key Resistance
Oct. 22 DJIA 16,614 Just a Rally of End of the Correction ?
Oct. 23 DJIA 16,461 BIG Day for Economic Reports
Oct. 24 DJIA 16,677 DJIA – a Portfolio of Small Cap Stocks ?
Oct. 27 DJIA 16,805 Wednesday: Wall Street: Pass, or Fail
Oct. 28 DJIA 16,817 Bullard Bull !!
Oct. 29 DJIA 17, 005 Fed Decision – Major Market Reaction ?
George Brooks
A Game-On Analysis, LL
“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.