Tuesday, June 24, 2014 9:03 a.m. BEFORE the OPEN
Last week the Street’s spirits were buoyed by press conference comments by Fed chief Janet Yellen, who assured investors that a low interest rate policy would be pursued for a “considerable time.”
Doubts that the Fed can hold interest rates down may be raised this week if economic reports indicate the economy is gaining traction faster than expected (see calendar below).
Hopefully, the Street has weaned itself off the “good news is bad news,” mentality, and will buy rather than sell if the reports are especially positive.
This week should give us a read.
I am still looking for a spike up followed by a correction and sideways trading range into late summer, early fall. Such a trading range would offer nimble traders an opportunity to clip quick profits, but longer term investors an opportunity to acquire positions on dips. Either way, “timing” will be important.
Minor support today is DJIA: 16,927; S&P 500: 1,961; Nasdaq Comp.:4,365, though I view that as “suspect.” Much will hinge on a host of economic reports due out between 9 a.m. and 10 a.m.. (see calendar below).
There is a risk of a drop today to DJIA 16,860; S&P 500: 1,953; Nasdaq: 4,346.
There is minor resistance at DJIA: 16,958; S&P 500: 1,964; Comp: 4,372.
Breaking those levels calls for an attack of DJIA 17,000; S&P 500: 1,970; Nasdaq Comp.: 4,379.
Investor’s first read– Daily edge before the open
S&P 500: 1,962
Russell 2000: 1,184
The European Central Bank’s cut of its benchmark interest rate and announcement to employ additional measures to stimulate European economies stands to help the U.S. economy, as well. It did little to boost stock markets abroad which are trading at six-year highs, suggesting the move was already discounted. Even so, let’s consider it a positive.
TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS
(UPDATED ANALYSIS: June 20)
At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and a more extreme support level, 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.
As of the close June 20, the near-term upside for the DJIA is 17,117. Reasonable support is 16,811, more extreme support is 16,718
Note: My daily support/resistance levels are more short-term oriented.
THIS WEEK’s ECONOMIC REPORTS:
Look for a very heavy schedule of releases on the economy this week, especially Monday and Tuesday for the housing industry.
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.”
Chicago Fed Nat’l Activity Ix.(8:30): May up to 0.20 from Apr. minus 0.32
PMI Mfg Flash Ix. (9:45): Markit flash index for June up to 57.5 from 56.4 (final May). New orders 61.7 vs. 58.8
Existing Home Sales (10:00): Up 4.9 pct. May vs. gain of 1.5 pct. Apr./ Yea/year minus 5.0 pct vs. minus 6.8 pct.
ICSC GoldmanStore Sales (7:45): Up 2.0 pct. in 6/21 week vs +0.4 pct. week ago. Year/year now +4.1 pct. vs +3.1 a year ago
FHFA HousePrice Ix. (9:00):
S&P Case Shiller HPI (9:00)):
New Home Sales (10:00):
Consumer Confidence (10:00):
Richmond Fed Mfg.(10:00):
MBA Purchase Apps (7:00):
Durable Goods Orders (8:30):
Corporate Profits (8:30):
PMI Services Flash (9:45):
Jobless Claims (8:30):
Personal Income/Outlays (8:30):
Kansas City Fed. Mfg. Ix.(11:00):
Consumer Sentiment (9:55):
June 9 DJIA 16,924 Stock Market Breakout – Now What ?
June 10 DJIA 16,943 Greed/Fear Ratio, Not P/Es, Drive the Market
June 11 DJIA 16,945 Watch Trampoline Effect for Stocks
June 12 DJIA 16,843 Sideways, 3-Month Trading Range Beginning ?
June 13 DJIA 16,734 Iraq Crisis to Create Buying Opportunity
June 16 DJIA 16,775 Uncertainty – A Menace t Stock Prices Near-Term
June 17 DJIA 16,781 Decision Day for Stock Prices – Near-Term
June 18 DJIA 16,808 Market Awaits a Fed QE Exit Strategy
June 19 DJIA 16,906 Wall Street Needs a Dose of Reality
June 20 DJIA 16,921 Spike Up Likely, No Room for Rally Failure
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“Investor’s first read – a daily edge before the open”
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