Quiet Before the Storm?

George Brooks |

TuesdayJuly  29, 2014      9:04 a.m.  BEFORE the OPEN

Sanity at last !  Gone are the days of wide swinging markets with volatility rudely yanking investors first in one direction, then in another.

    Yes, maybe – but I wouldn’t get too indifferent if I were you.

    The fast money needs more volatility than this. This is like watching a potato.

    At this point, the bulls only need a nudge. The bears need a crack in the market’s “step-up” pattern of  a rally followed by a few days of correction before another rally takes the market to new 52-week highs, though  only slightly.

    Right now, the market is not news sensitive, so a big move up or down will hinge on the Street’s perception of corporate earnings 6 – 9 months out.

    If more positive than it has been over the last six months, the DJIA reach 18,136 (S&P 500: 2,112; Nasdaq Comp.: 4,701). before a sharp technical correction sets in in the fall.

    If the outlook is disappointing, expect a sharp slide to DJIA 15,515; S&P 500: 1,806; Nasdaq Comp.: 4,105.


    Watch the trampoline effect this morning.  A sharp bounce bodes well, a lethargic one raises the odds of a rally failure and the need for more corrective work before a rebound can take place. A positive open will be tested after 30-40 minutes of trading.

    Support todayis : DJIA: 16,942; S&P 500: 1,975; Nasdaq Comp.: 4,432.

    Resistance todayis DJIA: 17,064; S&P 500: 1,986; 4,468.

Investor’s first readDaily edge before the open

DJIA:  16,982

S&P 500: 1,978

Nasdaq  Comp.:4,449 

Russell 2000: 1,139        

THE FED:                                                                                                  

    We will hear more cautionary  comments from the Fed going forward in an attempt to ease an interest rate hike when its reality hits early next year. The Fed does not want speculative fever to run rampant prior to the rate increase.

     The Fed’s “easing in” policy is bad news for those who want the feeding frenzy to continue unabated, but good news for investors who opt for  a more stable market and an inevitable crunch instead of crash.




    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.

     I ran my analysis again following the Monday, July 21 close and concluded the near-term upside for the DJIA is 17,333 a  reasonable downside is 16,932 and more extended downside risk to 16,865.

    My analysis run last week July 1 projected near-term resistance for the DJIA at 17,109 where it stalled last week. 

Note: My daily support/resistance  levels are more short-term oriented.



    The economic report schedule is heavy this week with a good balance between housing, service, production and employment

      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.”


PMI Services (flash) 9:45): July the winter low in Feb.flash reading at 61.2 well above 50’s break even and 7.9 points above

Pending Home Sales (10:00): Index was 102.7 in June vs 103.8 in May

Dallas Fed Mfg (10:30): Index is 12.7 in July vs. 11.4 in Jun..


FOMC Meeting begins

ICSC Goldman Store Sales (7:45): Up 0.2 pct. in July 26 week from a drop of 0.4 pct. the prior week . Year/year is +4.6 pct.

S&P Case Shiller Home Prices (9:00):

Consumer Confidence (10:00):

State Street Investor Confidence (10:00):


MBA Purchase Apps/Refi’s (7:00):

ADP Employment (8:15):

GDP 8:30):

FOMC Minutes  - no press conference


Jobless Claims (8:30):

Chicago PMI (9:45):


Employment Situation (8:30):

Personal Income (8:30):

PMI Mfg. Ix. (9:45)

Consumer Sentiment (9:55):

ISM Mgd Ix. (10:00)

Construction Spend (10:00)

Global Mfg PMI (10:00)



July 22   DJIA   17,051  Significance of Yellen’s Warning

July 23   DJIA   17,086  Feeding Frenzy in Low-Priced Stocks Imminent?

July 24   DJIA   17,113  Taper’s End Fully Discounted – 2015 Interest Rates Not

July 25   DJIA   17,083  Is Market Action Setting Stage for a Leg Up ?

July 28   DJIA   17,960  Big Week – Economic Reports/Q2 Earnings

A Game-On Analysis,  LLC publication

George  Brooks

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


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.









DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
AZN.18A AstraZeneca Plc Floating Rate Notes 2018 n/a n/a n/a 0


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