October Opportunity But Angst in Interim

George Brooks |

Thursday, October  2, 2014     9:19 a.m.  BEFORE the OPEN

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    After a contentious tug-of-war, the market has spoken.         

    Yesterday’s plunge resolved the difference of opinion that resulted in wide swings over the last five trading days, however expect extreme, unpredictable volatility to continue.

    The  break did technical damage to solid chart patterns, that can only be resolved by an immediate reversal to the upside or a further drop until a more gradual turning pattern is formed (most likely).

     Will this become an 8% - 12% correction, which would take the DJIA down to

15,962 – 15,268 ?

     Minor corrections like the one so far (3% - 4%) can become much bigger if new negatives develop or present negatives worsen (Ukraine, ISIS, Europe’s economy, Ebola “fears,” corporate earnings outlook for Q4 and beyond).

     We don’t have the answer to any of these now, but may shortly.

     In the interim, the market will have to probe for a level that discounts the known and “feared.”

TODAY:

    The market can bounce after an initial sell off as institutions jump on lower prices posted yesterday. A total reversal of the decline that started September 19 is only a remote possibility. October’s caldron of fear is barely simmering.  Look for a major trading opportunity if it begins to boil.

    Support  today is DJIA: 16, 670; S&P 500: 1,931; Nasdaq Comp.: 4,382

    Resistance today is DJIA: 16,894; S&P 500: 1,956; Nasdaq Comp.: 4,447

Investor’s first readDaily edge before the open

DJIA: 16,804

S&P 500: 1,946                                

Nasdaq  Comp.:4,422  

Russell 2000: 1,085          

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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS   (9/25 close)

By technically analyzing each of the 30 Dow industrials then using the Dow “divisor” to convert the data back into the DJIA, I can get a better read on what is primary support and a secondary support.

   As of the 9/25 close:  Resistance 17,141; Primary Support: 16,746; and Secondary Support: 16,454.

   The resistance and support levels listed daily may differ, since they are shorter term.

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INTERNATIONAL TENSIONS:

   Ukraine/Russia – quiet for now, but has the potential to get uglier.

   ISIS/Iraq/Syria – A Euro/Mid-East coalition has formed to counter ISIL. A full-blown bombing mission has been undertaken, which stands to be ongoing. Psychologically, that stands to play well in America, which has been warned of future terrorist activity.  The possibility of a major war resulting must be considered.

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THIS WEEK’s ECONOMIC REPORTS:

    Big week for economic reports.   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:

Personal Income/Outlays (8:30): Personal income rose 0.3 pct. in Aug. after a 0.2 pct rise in July.

Pending Home Sales  Ix. (10:00): Down 1.0 pct in Aug. vs 3.3 Pct. in July.

Dallas Fed Mfg. Ix. (10:30): Rose to 17.6 pct. in Sept. from 6.8 pct in Aug.

TUESDAY:

ICSC Goldman Store Sales (7:45): Sales dropped 0.2 pct. in Sept. 27 week vs. 4.1 pct. rise in the prior week.  Year/year up 3.6 pct.

S&P Case Shiller Home Prices (9:00): Down 0.5 pct. July vs. decline of 0.3 pct June.  Year/year is +6.7 pct.

Chicago PMI (9:45): September was 60.5 vs. 64.3 in August

Consumer Confidence (10:00): Index down to 86.0 in September from 93.4  (revised) in August.

State Street Global Investor Confidence Ix. (10:00): Index rose in Sept. to 123.9 from 120.1 in Aug..

WEDNESDAY:

MBA Purchase/Refi Apps (7:00): Unchanged in 9/26 week; Refi’s down 0.3 pct.

ADP Employment Rpt (8:15)  September increased 213,000 vs. 202,000 August

PMI Mfg. (9:45): September was 57.5 vs. 57.9 in August

ISM Mfg. Ix. (10:00):  September was 56.6 down from 58.0 in August.

Construction Spend (10:00): Down 0.8 pct. in August  after a gain of 1.2 pct. in July.

THURSDAY:

Jobless Claims (8:30):

Factory Orders (10:00):

FRIDAY:

Employment Situation (8:30):

Int’l Trade (8:30):

PMI services (9:45):

ISM Non- Mfg Ix. (10:00)

 

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RECENT POSTS:

Sept. 18  DJIA  17,156  Will BIG Money Sell Into Strength ?

Sept. 19  DJIA  17,265  Alibaba Frenzy – a Sell Signal ?

Sept. 22  DJIA  17,279  Another Test for the Bulls

Sept. 23  DJIA  17,172  Rally Now Would Be Risky

Sept, 24  DJIA  17,055  Critical Crossroads for Money Managers

Sept. 25  DJIA  17,210  Back to Tug of War  - Bulls vs. Bears

Sept  26  DJIA  16,945  Big Move in Market  for Winner of Tug of War

*Stock Trader’s Almanac

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 or as investment advice 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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