Market on the Verge of a Big Move?

George Brooks |

MondayJuly  30, 2014      9:04 a.m.  BEFORE the OPEN  

    As I write, investment analysts are digesting Q2 earnings reports and preparing projections for earnings for coming quarters.  With the exception of a stop-and-go housing industry, the economy is gaining traction, perhaps more than expected.

    Currently, war in the Mid-east and Ukraine is not adversely impacting the stock market. It looks like it is all about money, money at the corporate bottom line, and we will shortly find out what the Street sees for this year and into next year.

    TODAY:

    Yesterday’s positive open failed to gain traction and the day ended with the major market averages giving back all that they gained throughout the day, a rally failure.

    Pre-market trading today suggests a rebound.  Again, like yesterday, this rebound will have to have legs, no room for another rally failure.

    A failure would be bad news short-term, since both the Jobs report and GDP came in positive an hour before the open.  Q2 GDP posted a 4.0% gain (vs. minus 2.1% Q1) and 218,000 private sector jobs were added in July with June revised up to 281,000.

    A strong close paves the way for new highs, quite possibly a very strong up-leg.

    Support todayis : DJIA: 16,884; S&P 500: 1,966; Nasdaq Comp.: 4,434.

    Resistance todayis DJIA: 17,026; S&P 500: 1,983; 4,466.

Investor’s first readDaily edge before the open

DJIA: 16,912

S&P 500: 1,696

Nasdaq  Comp.:4,442 

Russell 2000:    1,141

THE FED:                                                                                                  

    We will hear more cautionary  comments from the Fed going forward in an attempt to ease an interest rate hike when its reality hits early next year. The Fed does not want speculative fever to run rampant prior to the rate increase.

     The Fed’s “easing in” policy is bad news for those who want the feeding frenzy to continue unabated, but good news for investors who opt for  a more stable market and an inevitable crunch instead of crash.

   

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TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS

(UPDATED ANALYSIS:  July 21)

    At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and a more extreme support leyel, as well as a short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself.  The DJIA is a price-weighted average and subject to distortion by higher priced issues.

     I ran my analysis after the July 21 close and concluded the near-term upside for the DJIA is 17,333 a  reasonable downside is 16,932 and more extended downside risk to 16,865. We hit 16,877 Monday. A follow through to yesterday’s rally failure puts that number in jeopardy.

    Note: My daily support/resistance  levels are more short-term oriented.

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THIS WEEK’s ECONOMIC REPORTS:

    The economic report schedule is heavy this week with a good balance between housing, service, production and employment

      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):July the winter low in Feb.flash reading at 61.2 well above 50’s break even and 7.9 points above

Pending Home Sales (10:00):Index was 102.7 in June vs103.8 in May

Dallas Fed Mfg (10:30):Index is 12.7 in July vs. 11.4 in Jun..

TUESDAY:

FOMC Meeting begins

ICSC Goldman Store Sales (7:45): Up 0.2 pct. in July 26 week from a drop of 0.4 pct. the prior week . Year/year is +4.6 pct.

S&P Case Shiller Home Prices (9:00): Slipped in May to a minus 0.3 pct. rate vs. +0..2 pct. in Apr..m Year/year is +9.3 pct. vs. +10.8 pct. Apr.

Consumer Confidence (10:00): Rose to 90.9 from85.2

State Street Investor Confidence (10:00): Slipped to 114.7 in July from 119.5 in June.m

WEDNESDAY:

MBA Purchase Apps/Refi’s (7:00): Flat ! Down 2.2 pct., Refi’s down 4.0 pct. Year/year Apps down 12.0 pct.

ADP Employment (8:15): 218,000 Private Sector Jobs were added in July, June was revised upward to 281,000.  Jobs added were across the entire spectrum of industries and pay scale.

GDP 8:30): Q2 growth was 4.0 pct. vs a minus 2.1 pct. – a surprise

FOMC Minutes  - no press conference

THURSDAY:

Jobless Claims (8:30):

Chicago PMI (9:45):

FRIDAY:

Employment Situation (8:30):

Personal Income (8:30):

PMI Mfg. Ix. (9:45)

Consumer Sentiment (9:55):

ISM Mgd Ix. (10:00)

Construction Spend (10:00)

Global Mfg PMI (10:00)

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RECENT POSTS:

July 22   DJIA   17,051  Significance of Yellen’s Warning

July 23   DJIA   17,086  Feeding Frenzy in Low-Priced Stocks Imminent ?

July 24   DJIA   17, 113 Taper’s End Fully Discounted – 2015 Interest Rates Not

July 25   DJIA   17,083  Is Market Action Setting Stage for a Leg Up ?

July 28   DJIA   17,960  Big Week – Economic Reports/Q2 Earnings

July 29   DJIA   16,982  Quite Before the Storm ?

A Game-On Analysis,  LLC publication

George  Brooks

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

Brooks007read@aol.com

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.

 

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