Amazon’s (AMZN) Jeff Bezos plans to deliver packages by drone in coming years. I’m OK with that, just don’t crowd the “Ho-Ho-Ho guy Christmas Eve.
So, the Street is once again uptight about an early Fed taper, even though such a move would be a Fed vote of confidence in the nation’s economic recovery.
We may get a heads-up this week on the possibility of a pre-March taper when key production and employment reports are released (SEE BELOW).
Unfortunately, once the first taper is announced, however slight, the Street will worry about the next one.
While it would represent a “change” in Fed policy, the Fed would only taper if the economy was gaining traction…..and if that traction lost momentum, the Fed would reinstate QE.
But we have entered December, a month of uncertainty, when institutions adjust portfolios for curb appeal in year-end reports; while other investors sell stocks for tax reasons, then reinvest. At times, this activity puts a lid on the year’s winners, while bumping up losers. It can be a month that doesn’t make sense.
And, YES ! the Annual Forecasts for 2014. They make exciting reading, just think – You are gifted with “inside” on 2014’s biggest winners before the year even starts. What’s more, the Street is going to let you in on what is going to happen throughout an entire year.
ENOUGH ! I am being cynical to make a point. There are just too many variables out there to plot a course without risk.
Read them, investigate the numerous recommendations, put them on a watch list that would flag unusual activity, but don’t buy the list without your own due diligence.
The Stock Trader’s Almanac* presents valuable insight on year-end activity and probability, and adjusts these to changing trends.
For example, the “old” bromide was that small cap stocks tend to out perform big caps in January. But the Almanac claims the Street is front-running convention and buying these potential moon shots is mid-December.
Then there is its “Wall Street’s Only Free Lunch Served Before Christmas.”I’ll touch on that tomorrow.
The Street is going to be watching economic indicators every day of the week – no exceptions. Key will be Wednesday’s ADP Employment report (8:15) and Friday’s Employment Situation report (8:30). The Beige Book is released Wednesday at 2p.m., with some raw meat for the Street to chew on.
Investor’s first read– a daily edge before the open
S&P 500: 1,805
Russell 2000: 1,142
Monday, Dec. 2, 2013
TIMING – OPPORTUNITY STOCKS
The following are based on technical analysis only and are not to be taken as buy or sell recommendations, but as one of many factors that must be considered in the decision process. Comments do not take into consideration earnings reports, or changes in institutional ratings, company guidance. Technical analysis is based on one’s interpretation of the impact buying and selling have on the price of a stock and is therefore not an exact science. News and events can change an interpretation instantly.
Apple (AAPL: $556.07) Positive.
Classic breakout and run. Support $550
Facebook (FB:47.01) Positive
My suspicions of a phony H&S top were confirmed last week with FB’s rebound. Nevertheless, FB must cross $49 to ice the deal.
IBM (IBM: $179.68) Neutral
IBM is still struggling with an irregular base. Stock needs to hold above $177, or pattern worsens
Pulte Homes (PHM: $18.76) Positive
While PHM got a big boost from Fed Vice-Chair Janet Yetten’s assurance the Fed will continue to accommodate the economic recovery and especially housing, the industry must now demonstrate it can gain traction. PHM blew out Tuesday, but its follow through Wednesday ran out of steam, probably due to taper talk. Without traction, PHM will fluctuate between $18.45 and $19.30.
First Solar (FSLR:59.82) Positive
Tried to run at the open yesterday, but a seller stopped it in its tracks. Pattern is still positive. Support is $59.60, Resistance $61.40
Nike (NKE:$79.14) “the inchworm” Positive
Some profit-taking showed up yesterday to interrupt NKE’s steady inch-by-inch rise. Support is $79,10. Nike headed for 80s, but must now work through sopply at$79.60– A plodder.
Hewlett-Packard (HPQ: $27.35) Positive.
Wednesday breakout may need a day or two of consolidation.
Polaris Inds. (PII:133.47) Positive
No Change:Positive consolidation pattern . Acts like it wants to break out above $135 and run. But a seller came in to block a breakout and PII may have to absorb more selling before a good move up. Support is $133.60.
Amazon (AMZN: $393.62) Positive
No Change: Just like the pink rabbit beating on a drum – up, up, up
Raymond James’ Aaron Kessler recently raised his rating to Strong Buy from Market Perform. Kessler looks prescient as AMZN may be headed for $400. I think Kessler deserves a standing – “O.” That was a bold call.
Pandora Media (P:28.40) Positive.
This stock has lovers and haters and its volatility reflects it. Reversed its slide before it got to my target. Break above $29 opens the door for $30. But it could not break above $29, but Friday’s trading was light due to shortened trading. Should hold at $28.
THE ECONOMY: HUGE !
Prior to Vice Chair Janet Yellen’s Senate Banking Committee confirmation hearing last week, there was a concern for an early taper. Her testimony seemed to assure the Street that the Fed will continue to accommodate the economic recovery if she becomes chairman.
But the Street is once again worried about an early Fed taper, and this week’s economic reports may just raise its concerns to a higher level.
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.” HOWEVER: this site will not post data and charts for the Thanksgiving Day week electing to take a week off. The calendar below is current.
PMI Mfg. Ix. (8:58)
ISM Mfg. Ix. (10:00)
Construction Spend (10:00)
ICSC Goldman Store Sales ((7:45)
ADP Employment (8:15)
International Trade (8:30)
New Home Sales (10:00)
ISM Non- Mfg. Ix. (10:00)
Fed Beige Book (2:00)
Jobless Claims (8:30)
Factory Orders (10:00)
Employment Situation (8:30)
Consumer Sentiment (9:55)
RECENT POSTS - 2013
Nov 6 DJIA 15,618 “Bulls Hold the Edge, But What About Interest Rates ?
Nov 7 DJIA 15,747 “Early Profit Taking or Warning of a Correction ?”
Nov 8 DJIA 15,593 “Time for the Street to Get Off the Fed Teat”
Nov 12 DJIA 15, 761 “The Economy, Interest Rates, The Fed, Stock Market”
Nov 12 DJIA 15,783 “Get Ready for Year-End Cross Currents”
Nov 13 DJIA 15,750 “Money Manager Dilemma – Your Problem, as Well
Nov 14 DJIA 15,821 “Feeding Frenzy in 2014’s Winners ? Big Day for “TECH
Nov 15 DJIA 15,876 “Yellen – No Taper – Surprise January Correction ?
Nov 18 DJIA 15,961 “Green Light to Load Up on Stocks ?
Nov 25 DJIA 16,064 Fetch the Blinders – Here come the forecasts
Nov 26 DJIA 16,072 Time to Shop for New Winners and Old Winners Getting
Whacked by Profit-Taking”
Nov 27 DJIA16,072 “December Head-Fakes Galore – Raises Risks”
Nov 29 DJIA 16,097 “Stock Market Bubbles Don’t Pop to a Full House”
“Investor’s first read – an edge before the open”
*STOCK TRADERS ALMANAC: The new annual Stock Trader’s Almanac is off the press. This is a “must,” always has been, if you are a serious investor, or intend to be a serious investor. Visit stocktradersalmanac.com for details
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. Brooks may buy or sell stocks referred to herein.