Market to React to Week's Economic Reports

George Brooks |

TuesdayJune  24, 2014      9:03 a.m.  BEFORE the OPEN

TODAY:

    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 readDaily edge before the open

DJIA:  16,937                                   

S&P 500: 1,962

Nasdaq  Comp.:4,368

Russell 2000:    1,184

   

EUROPE:

    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.

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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.”

MONDAY:

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.

TUESDAY:

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):

WEDNESDAY:

MBA Purchase Apps (7:00):

Durable Goods Orders (8:30):

GDP (8:30):

Corporate Profits (8:30):

PMI Services Flash (9:45):

THURSDAY:

Jobless Claims (8:30):

Personal Income/Outlays (8:30):

Kansas City Fed. Mfg. Ix.(11:00):

FRIDAY:

Consumer Sentiment (9:55):

 

 

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RECENT POSTS:

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

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 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.

 

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