Actionable insights straight to your inbox

Equities logo

Last Man Standing – a Bear or a Bull?

Friday, October  10, 2014     9: 10 a.m.  BEFORE the OPEN

Friday, October  10, 2014     9: 10 a.m.  BEFORE the OPEN


Daily: Boiling down fundamental, technical, economic, monetary, fiscal, psychological, and seasonal data into a quick read.


    It was a fair contest, but the bears won the tug of war started in late August and intensified during the last seven trading days.

    The Bulls will not be going away. October’s carnage has often set up attractive buying opportunities at bear market bottoms in 1974, 1987, 1990, 1998, 2002, as well as in non-bear years.

    The reason – October preceded the Best Six Months for Owning Stocks (Nov. 1 to May 1),* a period that has consistently outperformed the six months between May 1 and November 1.

    For obvious reasons, these months are the heart of business and investment activity versus the more tranquil summer months.

    This bull market has trampled a host of negatives, since it hit liftoff in early March 2009.

    Negatives today are known, the Fed (again), War (ISIS, Ukraine), Ebola’s reach, Europe’s economy, Q3 earnings and beyond.

    And, depends on who you ask – stocks may be overpriced.

    After yesterday’s mugging, investors must be wondering how much further the market can drop.  Didn’t it look like it was ready for another leg up two days ago?

    Sure did when the DJIA jumped 274 points after a 272-point plunge Wednesday.


    There is a marked difference of opinion here, suggesting continued volatility up and down. It clearly looks like the August 7 lows of DJIA 16,333 and S&P 500: 1,904 will be tested, but beware of the whipsaw.

    Usually whipsaws are triggered by news, this one is more “technical” based, an alternating imbalance of buying and selling as if these parties show up on different days –strange.

    It’s an easier go now for the Bears because a lot of overhead supply has been created in the  DJIA 16,660 – 17,000 area. 

    The only catalyst I can see that is powerful enough to blow the market  up through that resistance would be better than expected Q3 earnings accompanied by upbeat projections for coming quarters. However, a strong U.S. dollar threatens to adversely impact major companies with international operations.

    Pre-market trading indicates a lower open, but not a wipeout. After a big down day, there should be a bigger follow through, which raises the possibility of a another rally. Should that occur and fail to hold, a test of the August lows is in the cards. 

     This could be a critical day.


Investor’s first readDaily edge before the open

DJIA: 16,659

S&P 500: 1,928                                

Nasdaq  Comp.: 4,378

Russell 2000: 1,067



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 17,211; Primary Support: 16,820; and Secondary Support: 16,211.

   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 possibility of a major war resulting must be considered.



    Light week for reports on the economy. FOMC meeting, minutes released Wednesday, but no press conference   For detailed analysis of both the U.S. and Foreign economies along with charts, go to 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.”


ICSC Goldman Store Sales (7:45): Up 0.1 pct. in Oct. 4 week vs. drop if 0.2 pct. in the prior week.  Yest/year is +3.9 pct.

JOLTS (10;00):  There were 4.835 million jobs open Aug. 31 vs. 4,605 million in Jly.

FOMC Meeting begins


MBA Purchase Apps/ Refi’s (7:00): Purchases up 2.0 pct.; Year/year down 8.0 pct. Refi’s up 5.0 pct.

FOMC Minutes (2:00):  No Press Conference


Jobless Claims (8:30): Down 1,000 to 287,750 in Oct. 4 week.

Wholesale Trade (10:00):


Import Export Prices (8;30):



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

Sept. 29  DJIA  17,113  Huge Test for Bulls Today

Sept. 30  DJIA  17,071  Big Move in Market  for Winner of Tug of W ar

Oct.  1    DJIA  17,042  October – Risk or Opportunity ?

Oct.  2    DJIA  16,804  October Opportunity But Angst in Interim

Oct.  3    DJIA  16,801  Rally Today Must Hold

Oct.  6    DJIA  17,009  Best Six Months for Owning Stocks Looms

Oct.  7    DJIA  16,991  Volatility: Q3 earnings, ISIS, the Fed, Elections

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

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

*Stock Trader’s Almanac

A Game-On Analysis,  LLC publication

George  Brooks

“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.

A weekly five-point roundup of critical events in fintech, the future of finance and the next wave of banking industry transformation.