Interest Rate Angst Next

George Brooks |

Thursday, October  30, 2014     9:12 a.m.  DAILY BEFORE the OPEN


Daily:Boiling down fundamental, technical, economic,

monetary, fiscal, psychological, and seasonal data into a quick read.



    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.


    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 ?


  Investor’s first readDaily edge before the open

DJIA: 16,974

S&P 500:  1,982                               

Nasdaq  Comp.: 4,549

Russell 2000:1,146



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.



   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.



     For detailed analysis of both the U.S. and Foreign economies along with charts, go 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.”


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.


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.


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)


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


Personal Income/Outlays (8:30):

Chicago PMI (9:45):

Consumer Sentiment (9:55):




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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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