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Saw-Toothed Market Action Ahead

Obviously, the BIG money opted to wait before buying yesterday, and the question now is, when will it step in ?Fed Chairman Ben S. Bernanke's comments Wednesday indicated the Fed planned to reduce

Obviously, the BIG money opted to wait before buying yesterday, and the question now is, when will it step in ?
Fed Chairman Ben S. Bernanke’s comments Wednesday indicated the Fed planned to reduce the pace of its bond purchases in measured steps through the first half of next year, ending around mid-year.
But now, the Street is debating whether that reduction will come sooner rather than later, and how disruptive it will be here and abroad.
Bottom line: More uncertainty than before Bernanke’s news conference.
This confirms my earlier conclusion that the summer months will be characterized by a saw-toothed market action, sharp swings up and down as the market seeks a comfort level.
I don’t think this debate will be resolved soon. Too many balls up in the air. What the market doesn’t need right now is a new negative to surface to rattle the Street’s cage even more.
We have had a change in the market’s M.O., starting in late May when sellers started to meet buyers head-on ending what amounted to institutions buying as prices rose and especially on minor dips.
Now, with uncertainty and fear mounting, the reverse is likely to dominate the market’s direction until like I say, a comfort level is reached, when all foreseeable negatives are discounted.
I would be suspicious of any rally today, just too much uncertainty. Right now, I see a risk down to DJIA 14,195 (S&P 500: 1,543) with a number rallies before it gets there.
Quadruple Witching Friday: While the expiration of stock-index futures, index options, stock options and stock futures hasn’t had a big impact on the stock market, it may this time. Yesterday’s sharp drop may have impacted certain strategies and that may carry over into next week. Beware of very sharp moves up and down.
Investor’s first read – an edge before the open
DJIA: 14,758.32
S&P 500: 1,588.19
Nasdaq Comp.:33,646.63
Russell 2000: 960.51
Friday, June 21, 2013 (9:11 a.m.)

Apple (AAPL: $416.83)
With support at $420 – $422 broken, AAPL now at risk of dropping below $405.
.At 10 times earnings and yielding 2.94%, AAPL is a value, but management has not yet produced news that would prompt institutions to buy in-size. The Street is becoming impatient. Nevertheless, long-term buyers can be expected to use this slippage to buy.
FACEBOOK (FB – $23.90)
Overhead supply is formidable at $24.45, but an up-channel is forming, assuming the stock holds support at $23.45.

We have an important schedule for economic reports this week. For access to information including charts and graphics go to . Great site !
George Brooks
“Investor’s first read – an edge before the open”
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The writer of Investor’s first read, George Brooks, is not 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. 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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