There are still buyers out there, especially on any weakness. Nevertheless, I am uneasy about this market. A rally here to DJIA 14,638 (S&P 500: 1,572) is likely today, but new buying must be selective. A rally failure later in the week would be a danger signal.
IBM’s disappointing earnings were a jolt, and the stock took a nasty hit. Same with GE. That shouldn’t be happening in a buoyant market where the BIG money is aggressively bullish. CAREFUL ! Today’s action may be misleading.
Investor’s first read – an edge before the open
S&P 500: 1,562.50
Nasdaq Comp.: 3,233.55
Russell 2000: 914.80
April 23, 2013 (9:05 a.m.)
SEQUESTER: Stay tuned, it may become a factor.
At some point, the question will be raised about the sequester’s impact on the economy, notwithstanding the uncertainty it brings to persons at risk, directly and indirectly.
It is too early to expect anything to show up in the indicators, and it may never be a major issue if our economic recovery gains traction.
It is one of those potential negatives one has to consider along with other ingredients that lead to a decision to buy or sell.
Employers (government or private) may opt to furlough employees without pay, cut back on hours rather than release them to unemployment at the expense of the government. Even so, several weeks without pay has an impact on the economy.
This is one of those uncertainties that, along with a few others, can trigger a consolidation or pullback in the stock market.
Apple (AAPL: $390.53) One final plunge below $370 in offing.
What I wrote yesterday still stands. Resistance today is $409 - $412.
While the break below $400 did technical and psychological damage, odds are it will have one final plunge this week below $370. Most of the sentiment on the Street is negative for its earnings scheduled for tomorrow after the close. More than a dozen analysts has cut estimates in recent weeks. The company is suffering from lower margins and fierce competition from South Korea’s Samsung, which will introduce its own smartphone this week.. With the Street expecting the worst, AAPL can always report better-than-expected earnings a higher dividend, and plans for a better use of its $137 billion cash hoard, prompting a rally.
At this point, adds favor one final flush below $370 regardless of what AAPL reports. While its 45% decline from its September $705 high discounts a lot of negatives, it should take one more sell off to clear out the bears.
I am not long or short AAPL.
FACEBOOK (FB - $25.73)
There are some technical indicators that suggest FB is stronger now than when it reverser upward on March 23 from $24.72 and rose 14% by April 11.
However, a further decline in the market can take FB down further, $22, or so..
Between Aug. and Dec. last year, a trading range between$18 and $24 developed. That should provide support for FB and a buying opportunity. That’s where a three month tug of war took place between the believers and non-believers.
I am not long or short Facebook.
TODAY: Resistance starts at $26.87. Support is $25.76.
Investors will be looking for assurance this week that the economy is not weakening seriously. Reports from the primary driver of our recovery, housing, will come Monday and Tuesday. Due to strong numbers in February, analysts are revising Q1 GDP estimates upward, some to 3%.
PMI Manufacturing Ix.(8:58)
FHFA House Price Ix. (9:00)
New Home Sales (10:00):
Richmond Home Sales (10:00)
Durable Goods Orders (8:30)
Jobless Claims (8:30)
Bloomberg Consumer Comfort Ix. (9:45)
Kansas City Fed. Mfg. Ix.(11:00)
Consumer Sentiment (9:45)
“Investor’s first read – an edge before the open”
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