Risk: DJIA 14,666 (-1,655 pts) by Oct. 31

George Brooks |

Wednesday, October  15, 2014     8:39 a.m.  BEFORE the OPEN


Daily:Boiling down fundamental, technical, economic,

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


   I see the potential for a  plunge of 1,655 Dow-points this month to 14,666. The S&P 500 would drop to 1,686.  That would be a drop of 15.5% from the all-time high for the DJIA and 16.5% for the S&P 500.

    To head this off, this market needs strong Q3 earnings plus impressive projections for future quarters.  We will shortly know more about Q3 earnings.

   The Fed could delay a slide in the market with an extension of bond purchases using global economic weakness as an excuse in which case the market would surge “temporarily.”

   While Q3 may come in “OK,” the future may be adversely impacted by a strong U.S. dollar and  softness in economies abroad (Japan, China, Europe).

    Other negatives (ISIS, Ebola, Ukraine, mid-term elections) add to the stock market’s woes.

    I am usually cautious, but seldom bearish. I see an opportunity in the making this month, but rough going in the interim.


    A one-third retracement of the five and one-half bull market would take the DJIA down to 13,714 (S&P 500: 1,568) and it can get there in face of the right combination of negatives.  A one-third retracement of any major move is not out of the question, just not the norm.

Good Q3 earnings and the same for projections for Q4 and 2015 could prevent the plunge I see shaping up.  Certain comments by Fed officials about interest rates staying low into late 2015 could delay a crunch, but only temporarily.


Investor’s first readDaily edge before the open

DJIA: 16,315

S&P 500: 1,877

Nasdaq  Comp.: 4,227

Russell 2000: 1,061




I will be revising this this week since secondary support is likely to be taken out.

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 16,851; Primary Support: 16,430; and Secondary Support: 16,112  (which should be hit today).

   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.



   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 good possibility of a major war resulting must be considered.



    A heavy week for reports on the economy.   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.”



NFIB Small Bus. Optimism (7:30): Sept. index was 95.3 vs. 96.1 in Aug.

ICSC Goldman Store Sales (7:45): Down 0.7 pct. in Oct. 11 week : Year/year+3.8 pct.


MBA Purchase Apps/ Refi’s (7:00)

PPI-FD (8:30);

Retail Sales (8:30):

Empire State Mfg. (8:30):

Business Inventories (10:00):


Jobless Claims (8:30):

Industrial Production (9:15):

Philadelphia Fed Svy(10:00):

Housing Mkt Ix. (10:00):


Housing Starts (8:30):

Consumer Sentiment (9:55):



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  Moment of Truth for Market’s Direction

Sept. 29  DJIA  17,113  Huge Test for Bulls Today

Sept. 30  DJIA  17,071  Big Move in Market  for Winner of Tug of W ar

Oct.  1    DJIA  17,042  October – Risk or Opportunity ?

Oct.  2    DJIA  16,804  October Opportunity But Angst in Interim

Oct.  3    DJIA  16,801  Rally Today Must Hold

Oct.  6    DJIA  17,009  Best Six Months for Owning Stocks Looms

Oct.  7    DJIA  16,991  Volatility: Q3 earnings, ISIS, the Fed, Elections

Oct. 8     DJIA  16,719  Extreme Volatility = Risk, but Opportunity

Oct. 9     DJIA  16,994  Bad News is Good News ?  Pure Insanity ! 

Oct. 10   DJIA  16,544  Last Man Standing – Bear – or Bull

Oct. 13   DJIA 16,544   A Dangerous Rally – Dow 16,000 this Week ?

Oct. 14   DJIA 16,321   Technical Rally – Easy Does It !

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


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