Market to Key on Week's Economic Reports

George Brooks |


      The DJIA and S&P 500 have ranged sideways for six weeks after a rebound April 11 and is now attempting to break out and run for the fourth time.

      During that time the Nasdaq has been basing out after a nasty 9.7%, 5 week plunge.

      Whether the market can extend last week’s 3-day rally depends mostly on the economic reports released this week (see “This Week’s Economic Reports” below).

      Odds favor upbeat reports. The big question of course is: will they be upbeat enough to cause a meaningful increase in earnings guidance and projections?


      Look for a positive open with the DJIA approaching 16,700 and the S&P 500 punching to new highs. 

      Resistance isn’t as important in the next day or two as is the firmness of the up-move. No room for rally failures.

      The Nasdaq Composite is a different story since it got hammered in March and April. It will begin to run into resistance at 4,232 and may have to trend sideways before having a chance at higher levels.

Investor’s first read Daily edge before the open

DJIA:  16,606

S&P 500: 1,900

Nasdaq  Comp.:4,185

Russell 2000:    1,126

Tuesday,  May  27, 2014      8:55 a.m.


NOTE: I continue to run “Sell in May” and “Housing” for two reasons. One, this analysis is relevant and I add important content frequently. Two, I get new readers, and I want them to have access to this insight.


Sell in May and Go Away?? stock market has ranged sideways

   A popular jingle this time of the year for newsletters and journalistsMay has offered a number of timely exits, but I don’t buy the  “stay away” part, clearly not until November.

    Based on Friday’s market action, it looks like my contrariness is being rewarded.

   Essentially, it is the backend of the “Best Six Months”* to own stocks (November 1 to May 1). Obviously, the message here is of the two six month periods, May to November is the worst for stocks. 

   This is true, but as I have noted with the Best Six Months, a lot can happen in the interim.

   This bromide can’t be taken as a “given.” Of the 26 years I studied a “top” occurred in May on 10 occasions ranging from May 1 to May 22. Two occurred in June and two in July. No meaningful top occurred in 12 of the years studied.

   On far too many occasions over the last 26 years a May top was followed by a decline, but within months (well before Nov. 1) the market rallied sharply. I see it more as a trading opportunity – i.e. “Sell in May,” but be ready to buy back after a plunge.  



     The economy needs a contribution from the housing sector if it is going to gain major traction coming out of the winter slump.

      April’s 1.3% jump in Existing Home Sales may suggest a recovery in housing is near. The jump comes going up against a weak March, but total housing inventory rose 16.8% to 2.29 million homes for sale. Bank lending will remain a problem.

      Even so, housing stocks got a big boost Friday from the news and are beginning to show positive chart patterns.


Beazer Homes  (BZH) : $19.48 +$0.40

PulteCorp ($PHM):  $19.70 +$0.48

Toll Brothers (TOL) :  $35.50 +$0.56

KB Homes  (KBH) : $16.62 +$0.40

DR Horton  (DHI) : $23.57 +$0.92



      This is a big week for economic news. If it indicates the economy is charging out of its winter slump, money managers can expect to ramp up buying, assuming the outlook for corporate earnings will improve. 

      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.”


Durable Goods (8:30):Increased 0.8 pct. in April

FHFA House Price (9:00):

S&P Case Shiller  Home Prices (9:00):

PMI Svcs flash (9:45):


MBA Purchase Apps (7:00):

ICSC Goldman Store Sales(7:45):


GDP (8:30):

Jobless Claims (8:30):

Corporate Profits (8:30):

Pending Home Sales (10:00):


Personal Income (8:30):

Chicago PMI (9:45):

Consumer Sentiment (9:55):




May 13, DJIA  16,695  Bulls in Wings – Market Needs a Spark

May 14  DJIA  16, 715 What Could Spark a Surge or Plunge

May 15  DJIA  16,613  Market Needs Help from Economy, or…

May 16  DJIA  16,446  Bulls Blinked – But Don’t Get Too Bearish

May 19  DJIA   16,491  Stock Market Getting Ready for a Move ?

May 20  DJIA   16,511  Bull Still Alive

May 21  DJIA   16,374  Market Needs Help from Fed and Economy

May 22  DJIA   16,533 Again – Stock Market Set for a Big Move


**Stock Trader’s Almanac


A Game-On Analysis, , LLC publication

George  Brooks

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

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 investment advice or 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.













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:


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