Key Day for Economic Reports

Thursday, October  23, 2014     9:12 a.m.  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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   This is a big day for reports on the economy.  If upbeat, it will be difficult for the Fed to decide to extend bond purchases at its FOMC meeting next Wednesday.

    If there are signs of a slowdown here combined with a slump in Europe, it may give the Fed  an excuse to extend bond purchases.

    BUT, that would be a major decision, requiring a press conference after next Wednesday’s meeting (2:30 a.m.).  Presently no press conference is scheduled.  If one is announced, the Street will know what to expect and the market will rally, at least initially.

    BUT, that would suggest the Fed expects a slowing economy – NOT GOOD !

TODAY:

   Stock prices ran into a wall yesterday, which was normal after the S&P 500 recouped two-thirds of its recent 9.9% loss in 5 days.

   Pre-market trading indicates a strong open.  The market turned up last week after the Fed’s James Bullard hinted the Fed could extend bond purchases if it appeared weakness in Europe’s economy would adversely impact the U.S. economy.

   It is hard to tell if the market’s strength is due to Q3 earnings reports or to hopes the Fed will extend bond purchases beyond this month’s planned end.

    We will get the answer next Wednesday.

    Today’s strong open needs to hold to keep the rally in high gear. It stands to reason, stocks will run into some selling as it rises into areas where investors sold aggressively.

    This suggests any up move in coming days (weeks) will be slower, up at a 45 degree angle.

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Investor’s first read– Daily edge before the open

DJIA: 16,461

S&P 500:  1,927                               

Nasdaq  Comp.: 4,382

Russell 2000: 1,096

 

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FOMC MEETING Oct. 28 – 29:  WILL FED EXTEND BOND PURCHASES ??

    Last  week , James Bullard, a non-voting Fed official, stepped in suggesting bond purchases could be extended which is huge, but only if it does so. When ?  There is  no press conference scheduled after its FOMC meeting next week, Oct. 28. * If they schedule one, odds strongly favor a special announcement indicating if it plans to extend bond purchases, which would be a tipoff. If the Fed is going to do this it will have to this month or in December, since there is no meeting scheduled for November.

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BULL MARKET RETRACEMENT:

    A One-third retracement of the five and a half year bull market would take the DJIA down  to 13,714 (S&P 500: 1,568) and it can get there in face of the right negatives. A one-third retracement of any major move is not out of the question., just not the norm.

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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS   (10/1 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 16,935; Primary Support: 16,250; and Secondary Support: 15,080.

   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.”

 

TUESDAY:

ICSC Goldman Store Sales (7:45): Down 0.3 pct. in 10.18 week; Year/year is +2.1 pct.

Existing Home Sales (10:00): Up 2.4 pct. to an annual rate of 517 million units; Year/year is down 1.7 pct.

WEDNESDAY:

MBA Purchase Apps/Refis (7:00) Apps up 11.6 pct. vs gain of 5.6 pct  week ago

Consumer Price Ix (8:30):Up 0.1 pct; Ex food/energy up 0.1 pct.

THURSDAY:

Jobless Claims: 8:30): Up 17,000 to 283,000 in 10/17  week

Chicago Fed Nat’l Activity Ix (8:30):

FHFA House Prices (9:00):

PMI Mfg Ix. (9:45):

Leading Economic Inds. (10:00):

Kansas City Fed Mfg Ix. (11:00):

FRIDAY:

New Home Sales (10:00):

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RECENT POSTS:

Oct. 8     DJIA  16,719  Extreme Volatility = Risk, but Opportunity

Oct. 9     DJIA  16,994  Bad News is Good News ?  Pure Insanity ! 

Oct. 10   DJIA  16,544  Last Man Standing – Bear – or Bull ?

Oct. 13   DJIA  16,544  A Dangerous Rally – Dow 16,000 this Week ?

Oct. 14   DJIA  16,321  Technical Bounce  – Easy Does It !

Oct. 15   DJIA  16,315  Risk: DJIA 14,666 (-1,655 pts.) by Oct 31

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

*Note: Correction: There “is” an FOMC meeting next week Oct. 28-29, there just isn’t a  press conference “scheduled” to accompany it (yet).

** Stock Trader’s Almanac

George  Brooks

A Game-On Analysis,  LL

“Investor’s first read – a daily edge before the open”

[email protected]

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.