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.
BULL MARKET RETRACEMENT:
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 read– Daily edge before the open
DJIA: 16,315
S&P 500: 1,877
Nasdaq Comp.: 4,227
Russell 2000: 1,061
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS (10/10 close)
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 good possibility of a major war resulting must be considered.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
THIS WEEK’s ECONOMIC REPORTS:
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.”
TUESDAY:
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.
WEDNESDAY:
MBA Purchase Apps/ Refi’s (7:00)
PPI-FD (8:30);
Retail Sales (8:30):
Empire State Mfg. (8:30):
Business Inventories (10:00):
THURSDAY:
Jobless Claims (8:30):
Industrial Production (9:15):
Philadelphia Fed Svy(10:00):
Housing Mkt Ix. (10:00):
FRIDAY:
Housing Starts (8:30):
Consumer Sentiment (9:55):
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
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.
Read Next
