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Market Up Sharply – Someone Know Something?

   The market will open higher today, the question is – Why ?     The U.S. response to Syria is uncertain, as is Fed taper, the direction of  the economy here

   The market will open higher today, the question is – Why ?

    The U.S. response to Syria is uncertain, as is Fed taper, the direction of  the economy here and abroad, and the divisiveness of another debt ceiling confrontation with the remote possibility of a government shutdown.

   That leaves a “technical rally,” which is overdue coming off  a double bottom  and a market that has corrected 5.7% over the past month.

    But, the kids are back  to school now, and traders. money managers and brokers are back to work. In short, the investment year is beginning to kick in.

    While the Best Six Months* for owning stocks doesn’t officially start until November 1, the markets tend to jump the gun, especially if preceded by a summer sell off.

    At some point, the Street will accept an improving economy over its  addiction to the security that continued taper offers it. That threshold has to be crossed, for another leg of this bull market  to get underway.  It can’t happen in a bad news is good news environment.


Strength at the open may simply be “technical,” except last Wednesday’s/ Thursday’s  double bottom  is much too narrow, so today’s strength is most likely traders  front-running  a favorable resolution to a number of pressing uncertainties.

A number of stocks  are oversold and warrant the purchase of a partial position, so long as a cash reserve is maintained in the event the market will seek a comfort level at lower prices.

Support is DJIA 14,775 (S&P 500: 1,630)

Resistance starts at DJIA 14,946  (S&P 500:1,651)

Investor’s first readan edge before the open

DJIA:  14,810

S&P 500: 1,632

Nasdaq  Comp.: 3,589

Russell 2000:  1,010

Tuesday, Sept. 3,  2013     (9:12 a.m.)



The following are observations based solely on technical analysis and don’t give consideration to fundamentals or changes in brokerage ratings which can  have an immediate impact on stocks, justified or not.  The idea here is to give readers insight into the likely trends and turns in the stock’s price, short-and long-term.

   I picked up on AAPL and FB last year when they were in a tailspin, and  picked up on IBM, Pulte, First Solar, Target, and Hewlett-Packard recently for the same reason. These are not  buy or sell recommendations, and are not stocks I have recommended.

NOTE: Expect  support and resistance levels to change more frequently under adverse  and uncertain conditions  like those we are experiencing presently..

   WARNING: This market  is highly “news sensitive,” with everything at the present negative. Any break for the better in the mid-East, taper, or in the threat of a government shutdown in October will trigger a rally, especially in stocks below, since they have been hammered already.

  Apple(AAPL: $487.21 ) 

Note: Bottom was targeted at $385 the turn around  Apr. and Jun. 2013 (double bottom). This is a follow up.

Pattern: Positive, consolidating recent up move.

Resistance: $494

Support:  $487 – 489  – AAPL still in consolidation and probing for a level that discounts new negatives in overall market. Icahn must like this.  

  Facebook (FB – $41.29  )

Note: Bottom was targeted below $18 for a turnaround Sept. 2012, this is a follow up.

Pattern: Positive –

Resistance: $41.58

Support: $41 Friday I said “Buyers at the open yesterday reinforces positive pattern, chances of a bump to $44.75 better than even.” It got buying at the open and a bump to $42.26, but gave it all back by the end of the day, which may have been due to being Friday before a 3-day weekend and with a possibility of  a Syrian strike over the weekend.  Key is open Tuesday.

  IBM ($182.27  )  No change

Note: Started coverage  Aug. 7, 2013 after big plunge in stock

Pattern: Negative

Resistance:  $182.50                                       

Support:  Got down to my target on of $181.   A turning pattern may be forming..  Be aware that IBM has ranged four times up and down between $185 and $215 over the last two years.  Unless the fundamentals are horrendous  it is due for institutional buying, most likely in this area and possibly at or a smidge below $180.

Right now, there are sellers that must be taken out.

Each point up or down impacts the DJIA by about 13 points.

  PulteGroup (PHM- $15.39 ) 

Note: Started coverage Aug. 12, 2013

Pattern: Neutral but weakening

Resistance: $15.75

Support:  $14.60 (new)  Got whipsawed on this one. Thursday’s strength was reversed abruptly  as pattern weakened again due to industry uncertainty.


First Solar (FSLR:$36.72 )

Note: Started coverage: Aug.: 22, 2013

Pattern: Negative, but improving thanks to buying yesterday (wrong !) Sellers showed to send stock  back to support $36.50. Needs big sustained buying to head off drop tp $31 – $32.


Target (TGT:63.31 )

Note: Started coverage Aug: 22, 2013:

Pattern: Negative

Resistance: $63.25

Support: $63

Stock needs big buyer or it is headed for $61 – $62.  TGT’s drop from $73.50 is unnerving and may suggest the consumer is temporarily tapped out.

Hewlett-Packard (HPQ:22.34 )

Note: Started coverage Aug. 23, 2013

Pattern: Negative, probing for comfort level

Resistance: $22.36. 

HPQ looks like it can hold in this $22 – $23 area.  $19.85 is possible in a bad market.

eBay (eBay: $49.99 )   Yesterday’s action positive, though volume lacking

Note: Started coverage Aug. 28, 2013

Pattern: Neutral/bearish Friday’s action did damage

Resistance: $51.20

Support:  $ 49.65, but stock is at risk here.  Base support is in process of forming.  Stock should get a buyer in here as it has on five occasions when it ranged between $50 and $58 this year. If that happens, the intensity of that rally must be studied.  Failure to develop heavy volume suggests a break below $50 and drop into the mid-40s.  If there are bulls out there, they should find this price attractive and make their move. If  $50 isn’t attractive, the stock has a big problem.  (AMZN: $280.98 )

Note: Started coverage Aug. 28

Pattern:  Bullish, but correction must find support soon

Resistance: $284

Support:  Support now $280.  $268 – $272  is possible in a bad market.

 I do not own, nor am I short  AAPL, FB, IBM, PHM, FSLR ,TGT, HPQ, EBAY, AMZN.


Heavy schedule this week, also speeches by Federal Reserve  officials


   For a detailed account of past and current economic reports, including charts go to: –


PMI Mfg. Ix. (8:58)   Proj.:   Ix.: 53.9 Aug   unchg

ISM mfg Ix. (10:00)  Proj.:  Ix. 53.8 Aug.  vs

Construction Spending (10:00) Proj.:+0.3 pct. July vs. -0.6 pct June

Motor Veh. Sales  Proj.:  Aug. 12.3 mil unit  rate

ICSC Goldman Store Sales (7:45)  Proj.:  none

Int’l Trade (8:30)   Proj.: minus 39.0 bil July vs.   $34.2 bil June

Fed’s John Williams speaks (12:30)  Proj.:

Fed’s Narayana Kocherlakota speaks (8:00 pm)


ADP Employment rept (8:15)  Proj.:177,000 Aug  for private payrolls

Jobless Claims (8:30)   Proj.:    330,000 week ended  8/31 vs. 331,000 prior week

Productivity and Costs (8:30)  Proj.:+1.8 pct productivity;  +0.7 pct.

Fed’s Kocherlakota speaks again (9:00 am )

Factory Orders (10:00)   Proj.:  -3.4 pct. July

ISM Non-Mfg. Ix. (10:00)   Proj.:  Ix. 55.0 Aug.


Employment Situation (8:30)  Proj.: Private payrolls Aug. 178,000  , unemployment 7.4 pct.

Fed’s Esther George speaks (1:30 pm)  Proj.:


Aug 22  DJIA 14,897  “Street’s Angst Not About First Taper, but……”

Aug 23  DJIA 14,963  “Big Day: Rebound or Rally Failure ?”

Aug 26, DJIA  15,010  “Fed Policy Change – Big Impact on Stock Market ?”

Aug 27  DJIA  14,946  “No Quick Solution for Market’s Negatives – DJIA 14,250 ?

Aug 28  DJIA  14,776  “What Now for AAPL, FB, AMZN, FB, IBM, HPQ, etc. ?”

Aug 29  DJIA  14,824  “Don’t Buy the Syria Solution Rally?

Aug 30  DJIA   14,840 “ Countdown Starts Tuesday – What to Expect”

*Stock Trader’s Almanac  – New edition should be out now or shortly.

  George  Brooks

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

[email protected]


The writer of  Investor’s first read, George Brooks,  is not 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. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk. Brooks may buy or sell stocks referred to herein.