Market Wants to Run - Values are There - Institutions Have Money - Looking for Catalyst - Big Money to Jump Gun ?

George Brooks  |

Brooksie’s Daily Stock Market blog   -  an edge before the open

Monday, August 29, 2011      9:20 am EDT

DJIA: 11,285.54      S&P 500: 1176.80

Big week for economic numbers + big month for positive  input from Obama administration and Fed sets the stage for upbeat market.

Market is seeking a level that discounts known and foreseen negatives.  The anxiously awaited speech on Friday by Fed Chair Bernanke didn’t  help much.

However, a read between the lines suggests Bernanke isn’t overly worried about the economy, and that reinforces my suspicion that the real story here is that our economy will NOT slip into another recession.

Continued slow-going, yes, and what can anyone reasonably expect after the 2007 – 2009 near miss with a total meltdown.

This week’s economic reports stand to provide important insight into just how much our economy is slipping.

Based on the news environment that has tempered consumer and business spending  in recent months, the numbers should  stink, but consumer spending was up 0.8 percent in July vs. a drop of 0.2 percent in June.

Monday: Pending Home Sales (10:00).  Little help expected.

Tuesday: Consumer Confidence (10:00)- slumping in face of Congressional dysfunction, concern for economy.

Wednesday: ADP Employment Report (8:15) – Through Aug. 12, it can be a clue to Friday’s all-important Employment Situation Report, but it only covers private payroll data, excluding the government.

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Chicago PMI (ISM) Survey ((:45): A positive surprise would help !

Factory Orders (10:00) – Continued weakness likely

Thursday: Motor Vehicle Sales (6:00) Recent rebound due to pick up after Japan’s supply disruption

Jobless Claims (8:30) –Last week numbers adversely affected by Verizon strike since settled.

Construction Spending (10:00)  -  volatile

ISM Manufacturing Report (10:00) – estimated to decline to 48.5 from 50.9 folowing a drop from 55.3>

Friday: Employment Situation (8:30) – Estimated by Bloomberg survey to climb only by 75,000 workers through mid-August. We need a good number here, or just not a bad number.

I think we  are a month to six weeks away from a recovery in the stock market.  The Big money may jump the gun if it sees evidence that a second recession is NOT in the cards.

Volatility will rule.  High volume breakout above DJIA 11, 550 (S&P 500: 1210 needed needed by bulls.  Downside is DJIA 9,680 (S&P 500: 1050).

It’s kind of a “lock and load” situation, as I headlined Friday looks like 1,000 DJIA points either way.

George Brooks


The writer of Brooksie’s Daily Stock Market blog, 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

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