Market Crossroads - Which Way?

George Brooks |

NOTE: Changes to :Tech Watch” – Nike, Polaris, Pandora in, Target, eBay out

   I am looking over my shoulder for the unexpected, something that can trigger a sharp correction.  Don’t let that alarm you. In this casino environment, I  frequently look for trouble when it looks like stocks  seem to have nowhere else to go but up.

   Fortunately, we have had  three corrections since May though the net result  has been a higher market.

   Currently, I see January as a possibility for a nasty correction, but from higher levels.

   This is a monster bull, one that has thumbed its nose at one unthinkable adversity after another, and at some point in the future it will pack it in  with a spectacular speculative frenzy prior to a Grizzly size bear.

   In the interim, expect 3% -5% corrections and one or two 8% -11% pullbacks. The latter can  dole out enough pain to force investors to bail, just before a rebound.


   Yesterday was a ho-hummer with an ever so slight positive bias. Bulls want to see an attempt to sell off lose momentum, bears are hoping for a rally failure.

  Right now, the most readable market action would be the rally failure, since the market has posted an uninterrupted surge since early October.

   A move up that holds beyond DJIA 15,675 (S&P 500: 1,772) would be positive  raising the odds of new all-time highs. A sustained drop below DJIA: 15,580 (S&P 500: 1,760) would be a warning of more downside.

Investor’s first reada daily edge before the open

DJIA: 15,639

S&P 500: 1,767

Nasdaq  Comp. 3,936

Russell 2000:  1,108

Tuesday, Nov. 5, 2013     (9:01 a.m.)

TECH WATCH:   Changes: Adding Nike (NKE), Polaris Industries (PII) and  Pandora (P) and dropping Target (TGT) and eBay (EBAY).

   I am considering the elimination of the Tech Watch section and offering it in a separate publication on a subscription basis.

I would be able to cover more companies, and would not be constrained by a pre-market deadline. Comments welcome: Include opinion about how you think I could even improve commentary bearing in mind these are NOT buy/sell comments.

   The following are based on technical analysis only and  are not to be taken as buy or sell recommendations, but as one of many factors that must be considered in the decision process. Comments do not take into consideration earnings reports, or changes in institutional ratings, company guidance. Technical analysis is based on one’s interpretation of  the impact buying and selling have on the price of a stock and is therefore not an exact science. News and events can change an interpretation instantly. 

Apple (AAPL: $526.75) Positive.

No change. Remains in consolidation. Must break up through $528 to give it a shot at $540 and above. Friday, I said odds favored a slip to $514 - $518 first. It did that, hitting $515.84 before rebounding to $520. This is what a consolidation looks like – a lot of volatility reflecting profit taking and new investors who see the dips that selling produces as an opportunity to move in. I can see a slip to $510 - $512 in a soft market, but odds do not favor that, without an ugly surprise.

Facebook (FB: $49.75) Positive

Hit both resistance ($52) and support (49) levels Friday, closing at the latter and continuing down Monday. FB could drop quickly to $46.80 where it should find some buying.

 IBM (IBM: $180.27)  Negative, and it only has to work on its base a bit longer to turn positive.

No change:IBM is in the process of developing a turning pattern which will ensure investors further downside is limited. It has run into resistance at $182 and is now probing the downside for a support level where it should see buying above $178.

Pulte Homes (PHM: $17.83)  Positive

Investors got  the earnings report they  were looking for last week,  pushing PHM across $18. Since then, it has been digesting that gain. Trying to hold above $17.60  Any further weakness should attract a buyer.


First Solar (FSLR:$61.83)  Positive

Blowout earnings last week prompted buying and panicky short covering taking FSLR  above my target level. Stock can go higher. Support rises to $60.20.

Target (TGT: $64.62) Now positive but with a limited short-term upside.

This is the last day for my coverage of TGT. Stock could edge a bit higher but there is formidable resistance between $67 and $68.

Nike (NKE:$76.37) Positive

Has had a nice run from the $63 level with consolidations along the way, the most recent  being a 10-day sideways range between $75 and $76. It is volatile intraday. Support is $75.70, resistance $76.70. A good market should enable NKE to move across $80 near-term..

Hewlett-Packard (HPQ: $25.77)  Positive

No change: Hit $26 with room to spare in response to news of a $3.5 billion U.S. Navy order. Support is $25.55.

EBAY (EBAY: $51.37) Neutral  but struggling

This is the last day of coverage for eBay.

Continues to look weak with significant overhead supply, starting now at $53. Worth noting,  EBAY  has rebounded sharply from the $49 - $50 area  four times in a year and may do so again. Needs a big buyer to head off a drop the mid-40s.

Polaris Inds. (PII: 131.09)  Positive

PII rose $2.09 yesterday to challenge resistance at $133-$134. Pre-market trading indicates it will open on the downside, suggesting it needs bigger volume to break out.

Amazon (AMZN: $358.74) Positive

No change:In an upbeat market, AMZN could move across $375. Raymond James’ Aaron Kessler’s  raised his rating to Strong Buy from Market Perform with a price target of $446.  Looks ready for a move to $364 - $366.

Pandora Media (P:$25.67) Positive.

Pandora  has ranged between 23 and $28 since mid-September as it digests its move up from $18.  It appears to have found support in the $25.30 - $25.75  area. In a good market, increased upside volume can take it beyond $28 into the low-30s. This is a highly news sensitive stock and it can go up or down sharply without advance notice. There has been some heavy trading in recent days, which could reflect  a buyer sopping up  some big pieces for sale. Stock needs a move above $26 to tip the scales in favor of the bulls. Break below $25 raises risk of drop to $23.


While the economic reports released this week are few in number, they are significant.   Though the accuracy of these reports may still be suspect due to the shutdown, the Street will be watching for clues about the economy’s strength, since it will influence  the timing of Fed taper.. Bernanke speaks at 3:30p.m. Friday.

   For a detailed account of past and current economic reports, including charts go to: -


Factory Orders (10:00)  Rose1.7 pct in Sept. vs. declines of 0.1 pct Aug, 2.8 pct July

Fed’s Powell speaks (11:40)

Fed’s Rosengran speaks (4:00 p.m.)


ISM Non-Mfg.Ix. (10:00)  PROJ.: Oct. index Sept. 54.5

Fed’s Lacker speaks (12:30 p.m.)

Fed’s Williams speaks (5:10p.m.)


Leading Indicators (10:00)  PROJ.:  Sept. +0.7pct.

Fed’s Pianalto speaks (1:0 p.m.)


Jobless Claims (8:30)  PROJ.: For week 11/2 335,000

GDP (8:30) PROJ.: 3rd estimate  Q3 +2,0 pct. annual rate

Fed’s Stein speaks (9:10)


Employment Situation (8:30) PROJ.: October 120,000, Private payrolls: 128,000. Unemployment rate 7.3 pct.

Personal Income/Outlays (9:55)PROJ.: Sept: +0.3 pct.

Consumer Sentiment (9:55)PROJ.: Nov. index: 75.0 vs. 73.2 Oct.

Fed’s Lockhart speaks (12:00p.m.)

Fed Chief Bernanke speaks (3:30p.m.)



Oct 15 DJIA   15,301   “What If We Default ?  What If We Don’t ?

Oct 16 DJIA   15,168   “Market Saying “Deal” – A High Risk Bet ?”

Oct 17 DJIA   15,373   “How Much of the “Deal” has the Market Discounted” ?

Oct 18 DJIA   15,371   “No More Wall of Worry for  Bull Market to Climb ?”

Oct 21 DJIA   15,399   “Analysis Projects High-Low Range for DJIA”

Oct 22 DJIA   15,392   “Is the Stock Market Vulnerable ?”

Oct 23 DJIA   15,467   “Q3 Earnings – Only Worry In Town ?”

Oct 24 DJIA   15,413   “No Fed Taper in Sight ?  Don’t Bet on It.”

Oct 25 DJIA   15,509   “Best Six Months for Owning Stocks”

Oct 28 DJIA   15,570   “Do I Detect Speculative “Fever “ ? If So, What Can  


Oct 29 DJIA   15,568  “ When Will the Small Investor Plunge ?”

Oct 30 DJIA   15,680  “Don’t Rule Out Fed Taper by Year-End”

Oct 31 DJIA   15,618  “Easy Does It ! Market Nervous, Needs Breather”

Nov 1  DJIA   15,545  “Rally Failure, Correction to Continue ?

  George  Brooks

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

*STOCK TRADERS ALMANAC: The new annual Stock Trader’s Almanac  is off the press.  This is a “must,” always has been, if you are a serious  investor, or intend to be a serious investor. Visit for details


The writer of  Investor’s first read, George Brooks,  is not 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. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk. Brooks may buy or sell stocks referred to herein.












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:


Symbol Name Price Change % Volume
NTRHF Nature Group Plc Ord 0.14 0.00 0.00 0


Emerging Growth

AfterMaster Inc

Studio One Media Inc is a diversified media and technology company. It is engaged in the development and commercialization of proprietary, edge audio and video technologies for professional and consumer…

Private Markets


The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…


Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.