Raise Some Cash

George Brooks |

Friday, October  31, 2014     8:46 a.m.  DAILY BEFORE the OPEN

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Daily:Boiling down fundamental, technical, economic,

monetary, fiscal, psychological, and seasonal data into a quick read.

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TODAY:

    It’s done !  The Fed has ended QE bond purchases, confident the U.S. economy is gaining sustainable traction.

    Hopefully, the Street will now abandon its silly mentality that bad is good. Addicted to QE, the Street has actually welcomed a soft economic reports in recent years, because they suggested the Fed was less likely to end bond purchases until the economy was expanding rapidly. 

    Immediately after the Fed’s decision Wednesday, investors were uncertain  how the market would react  the following day,but buying in pre-market trading indicated the reaction would be positive, and the market soared.

    Nevertheless, while the DJIA was up 221 points, roughly two-thirds ( 141 points) of that rise was accounted for by Visa (V) which jumped  22 points on better than expected earnings. Visa is the DJIA’s highest priced stock, having ten times the impact on the average as Cisco (CSCO: $24.08)

    The S&P 500 and Nasdaq Composite were up  less percentagewise.

    Even so, the scramble to buy will continue today with a powerful open.

    However, the Major market averages are up sharply in just 12 trading days, so some short-term oriented investors are likely to lock-in profits. Since the October lows, the DJIA is up 8.2%, S&P 500: 9.8%, Nasdaq Comp. 8.4%, and Russell 2000: 11.1%.

    New all-time highs are within reach today for all but the Russell 2000, which has to post a gain of 5% to get there.

    The Street’s angst will now focus on the timing of an interest rate increase. While the economy should be able to accommodate slightly higher interest rates, just the suggestion of an increase sooner that mid2015 would  rattle the Street’s sense of security.

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Investor’s first readDaily edge before the open

DJIA: 17,195

S&P 500:  1,994                               

Nasdaq  Comp.: 4,566

Russell 2000:1,155

 

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    BEST SIX MONTHS for OWNING STOCKS (Nov. 1 to May 1)*

   This six months period has consistently outperformed the six months between May 1 and November 1, though both have been interrupted by counter moves.

    It is important to consider the possibility that the six month period starting Monday will be an exception.  This would not only go counter to the Best Six Months pattern, it would contradict the market’s bullish record for rising  in pre-presidential  election years.

    If the Washington scene has been ugly and dysfunctional over the last four years, it stands to get even more so regardless of who comes out ahead next Tuesday.   Just keep an open mind.  None of these seasonal tendencies is infallible.  These seasonal patterns, and others are presented in great detail in the Stock Trader’s Almanac – “must” reading.

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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS   (10/30 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 10/8 close:  Resistance 17,532; Primary Support: 17,052; and Secondary Support: 16,930.

   NOTE: These calculations generally hold for longer periods of time, but need to be changed when the market is hit with excessive volatility.

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

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THIS WEEK’s 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:

PMI Services –flash (9:45): Oct. index was 57.3 down from 58.9 in Sept.

Pending Home Sales (10:00): Up 0.3 pct. in Sept. vs. down 1.0 pct. Aug.

Dallas Fed Mfg. Ix. (10:30): Index slipped to 10.5 in Oct. from 10.8 in Sept.

TUESDAY:

FOMC Meeting begins

ICSC Goldman Store Sales (7:45): Up 0.3 pct. in 10/24 week; Year/year +2.8 pct.

Durable Goods (8:30): Down 1.3 pct. in Sept. after drop of 18.2 pct. Aug.  Ex-Trans +3.3 pct. vs. +8.7 pct. Aug.

S&P Case Shiller Home Price (9:00): Down 0.1 pct. Aug. vs increase of 0.1 pct. Jly.

Consumer Confidence (10:00): Index for Oct. is up to 94.5 from 89.0 in Sept.

Richmond Fed Mfg Ix. (10:00):  Index for Oct. is 20 vs. 14 in Sept.

WEDNESDAY:

MBA Purchase Apps (7:45):  Apps down 5.0 pct. ; Refi’s down 7.0 pct. in 10/24 week.

FOMC announcement (200): No press conference scheduled (yet)

THURSDAY:

GDP: Q3 (8:30):  3.5% after 4.6% (revised)  in Q2

Jobless Claims (8:30): Up 3,000 to 287,000 in 10/24 week

FRIDAY:

Personal Income/Outlays (8:30):

Chicago PMI (9:45):

Consumer Sentiment (9:55):

 

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RECENT POSTS:

Oct. 16   DJIA  16,141  Rally Today Off Wednesday Lows Risky

Oct. 17   DJIA  16,117  What If the Fed Doesn’t Delay Taper ?

Oct. 20   DJIA  16,380   Critical Week for Bulls

Oct. 21   DJIA  16,399   Market Attacking Key Resistance

Oct. 22   DJIA   16,614  Just a Rally of End of the  Correction ?

Oct. 23   DJIA   16,461  BIG Day for Economic Reports

Oct. 24   DJIA   16,677  DJIA – a Portfolio of Small Cap Stocks ?

Oct. 27  DJIA    16,805  Wednesday: Wall Street: Pass, or Fail

Oct. 28   DJIA   16,817  Bullard Bull !!

Oct. 29   DJIA   17,005  Fed Decision – Major Market Reaction ?

Oct. 30   DJIA   16,974  Interest Rate Angst Next

*Stock Trader’s Almanac

George  Brooks

A Game-On Analysis,  LL

“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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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