Friday, October 3, 2014 9:19 a.m. 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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Yesterday’s rally after a big spike down was classic “technical.” At some point selling is offset by enough bargain hunters to enable a recovery.
Volatility is simply an ongoing joust between buyers and sellers in responding to information known and suspected. Add some fear and greed and you get extremes up and down.
There appears to have been a lot of portfolio window dressing at the end of Q3 and beginning of Q4, resulting in a lot of churning up and down.
Was yesterday a bottom to be followed by new highs as the “Best Six Months for Owning Stocks (Nov. 1 to May 1)”* looms ?
The market action in coming days will answer that question. Investors who don’t want to wait for an answer can take partial positions. If the market rises, they can average up. If it declines they can average down. The risks and rewards are obvious if they go “all-in.”
There is overhead supply that must be penetrated before the market can go to new highs.
TODAY:
The market will open strongly today, as investors scramble to pick up what they perceive as bargains and short sellers cover positions before the weekend.
Resistancetoday is DJIA: 16,913; S&P 500: 1,961; Nasdaq Comp.: 4,459.
Supporttoday is DJIA: 16,776; S&P 500: 1,942; Nasdaq Comp.: 4,419
Yesterday’s close near the highs for the day after taking a big hit (one-day reversal) suggests at least a couple strong days.
BUT, there is no room for a rally failure – NONE !
The nine-day 4% drop in the DJIA may have been purely “technical,” a correction after a false breakout to all-time highs in September (“Breakout and Run – Followed by a Crunch” Sept. 3 – “Investor’s first read”)
The Street is coping with a host of negatives, all known (Russia, ISSIS, the Fed and interest rates, soft economies abroad). If a negative lurks out there that has not yet been discounted by the level of stock prices, the market is headed south.
Investor’s first read– Daily edge before the open
DJIA: 16,801
S&P 500: 1,946
Nasdaq Comp.:4,430
Russell 2000: 1,096
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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 to www.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):Dropped 8,000 in 9/27 week to 287,000.
Factory Orders (10:00): Down 10.1 pct in Aug. after rise of 10.5 pct in July; Ex trans. Drop was 0.1 pct.
FRIDAY:
Employment Situation (8:30): Sept. up 248,000, Aug. 180,000 (revised) Unemployment rate 5.9%.
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”
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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