Thursday, July 3, 2014 9:10 a.m. BEFORE the OPEN
Trading will be light today as traders and investors hit the road for a long July 4th weekend, if they haven’t already. A spike in prices would offer traders not leaving early an opportunity to scalp better prices.
Today’s payroll data beat expectations with Non-Farm hires up 288,000 and a drop in the Unemployment rate to 6.1% from 6.3%, strongly suggesting the spring rebound from a severe winter is robust.
The stock-index futures took a hit on the news probably because the Street will now worry about the Fed allowing interest rates to rise sooner than originally projected (Q1 2015)
The stock market has been on a tear since April 11 with rises of DJIA (6.0%) S&P 500 (8.8%), and Nasdaq Comp. (12.9%). While five brief corrections along the way prevented an unsustainable spike in prices, there is risk of a temporary top in coming days followed by a trading range lasting into September.
We are about to enter the Q2 corporate earnings minefield, where stocks failing to comfortably “beat” Street projections are clobbered. Fortunately, many companies won’t report until late July/early August.
TODAY:
Odds favor a move by the DJIA above 17,000 and a good day overall, all assuming no sudden unexpected bad news.
I expect a correction of 4% to 6%, before fall. Odds favor it will start after the DJIA punches through 17,000 up to 17,110 or so.
Support today is DJIA: 16,918; S&P 500:1,968; Nasdaq Comp.: 4,437
Resistance today is DJIA: 17, 098; S&P 500: 1,989; Nasdaq Comp.: 4,491
NOTE: I will be travelling and not have access to the Internet between July 6 and July 20, ergo no post here.
Investor’s first read– Daily edge before the open
DJIA: 16,976
S&P 500: 1,974
Nasdaq Comp.:4,457
Russell 2000: 1,199
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TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS
(UPDATED ANALYSIS: July 1)
At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and a more extreme support leyel, as well as a short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself. The DJIA is a price-weighted average and subject to distortion by higher priced issues.
Yesterday’s breakout prompted me to run the analysis again. While my near-term upside remains the same at 17,109, the reasonable near-term downside jumps to 16,875 as of the close July 1. I did not calculate an extreme downside this time.
Note: My daily support/resistance levels are more short-term oriented.
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THIS WEEK’s ECONOMIC REPORTS:
Expect a full slate of reports in this shortened July 4 week with the key Employment Situation report coming at 8:30 Thursday, preceded by the ADP Employment report as usual on Wednesday.
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.”
MONDAY:
Chicago PMI (9:45): Declined to 62.6 in June from 65.5 in May
Pending Home Sales (10:00): Up 6.1 pct. in June from a gain of 0.4 pct. in May.
Dallas Fed Mfg.(10:30): Business Activity index was 11.4 in June vs. 8.0 in May; the Production index was 15.5 in June vs 11.6.
TUESDAY:
Motor Vehicle Sales: Light motor vehicles sales were up 4.6 pct. to an annual rate of 16.8 million vehicle.
ICSC Goldman Store Sales (7:45): Chain store sales for the Jun 28 week were up 1.0 pct. vs. up 0.8 pct .
PMI Mfg Ix.(9:45): Index hit 57.3 in June up from 56.4 in May.
ISM Mfg. Ix.(10:00): At 55.3 in June vs. 55.4 in May, but New Orders jumped to 58.9 from 56.9.
Construction Spend.(10:00):Up 0.1 pct. in May vs. 0.8 pct. in Apr., revised up from 0.2 pct.
Global Mfg. PMI (10:00): Rose in June to 52.7 from 52.1 in May.
WEDNESDAY:
MBA Purchase Apps.(7:00) Apps down 1.0 pct. refi’s up 1.0 pct. for week Jun 27
ADP Employment (8:15): June payrolls up 281,000 vs up 179,000 (revised)
Gallup US Job Creation Ix. (8:30) Index unchanged for June at 27.
Factory Orders (10:00): Down 0.5 pct. in May vs. gain of 0.7 pct. Apr..
THURSDAY:
Employment Situation (8:20): June Non-farm payrolls up 288,000, private payrolls up 262,000, strong numbers
International Trade (8:30):
Jobless Claims (9:30):
PMI Services Ix. (9:45):
ISM Non- Mfg. Ix. (10:00):
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RECENT POSTS:
June 20 DJIA 16,921 Spike Up Likely, No Room for Rally Failure
June 23 DJIA 16,947 Spike, Correction – Opportunity
June 24 DJIA 16,937 Market to React to Week’s Economic Reports
June 25 DJIA 16,818 Major Challenge for Bulls
June 26 DJIA 16,867 Again – Bulls Challenged
June 27 DJIA 16,846 Near-Term Tipping Point for Stock Prices
June 30 DJIA 16,851 Stock Fever Festering
July 1 DJIA 16,826 Week’s Economic Reports – Dow 17,000 ?
July 2 DJIA 16,956 Speculative Fever Mounting – Careful !
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 investment advice or 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.
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