Wednesday August 3, 2011 9:18
DJIA: 11,866.62 S&P 500: 1254.05
Today: a bounce in the DJIA of 65 to 120 points is likely after 8 straight down days. Without dramatically positive economic reports today and Thursday and Friday, I don’t see any meaningful upside. Odds favor another rally failure.
My July 29, “Debt Ceiling Rally to Be a Fake Out” urged readers of a false move up in response to Congress’s avoidance of default and of a subsequent slide in stock prices to DJIA 10,700 – 10,830 (S&P 500:1150) by September/October.
The rally was indeed a fake out; yesterday’s 265-point plunge in the DJIA, suggests my downside target is reasonable in time.
My August 1, blog warned readers once again of another leg down, but added that DJIA 9,680 (S&P 500: 1050) was possible if new news hits the market once in gets down there, kind of a worst case scenario.
We have several things working against a rebound and sustained upmove in the stock market, most have been referred to here in recent weeks.
With recent economic indicators showing signs of a stall, the doomsters are once again trumpeting the possibility of a “double-dip” recession. However, we don’t have to have a series of distasteful economic indicators to adversely impact stock prices enough to hit my risk targets.
This is an important week for economic indicators. Today the ADP Employment Report for June came in at a plus 114,000, short of the projected 157,000. May Factory Orders and the ISM Non-Manufacturing survey
results will be reported at 10 o’clock. Jobless Claims come tomorrow at 8:30 and the very important “Employment Situation” report comes at 8:30 Friday.
The Street is hoping these reports WON”T be too bad. Good would be a blessing, since the market is floundering.
European sovereign debt issues will plague us for a long time with varying degrees of impact.
I am not impressed with the “debt deal.” I think the “Super Committee” stands to be another eunuch.
I am especially concerned with the obstructionism in Congress by the Tea Party Republicans. We need everyone reasonably debating the kind of issues that address our problems, not an element that is opposed to everything that isn’t exactly what “they” want. That is not helpful in difficult times, it is destructive.
The writer of Brooksie’s Daily Stock Market blog, 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
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