Bubbles don’t develop when a lot of people are looking for them. The current March 6, 2009 bull market will go on record as the most dramatic of them all.
Why ?
Because it climbed an incredibly steep wall of worry- unprecedented ! This wall actually slanted backward, at times.
The bull market will end in classic fashion – micro caps gapping up every Monday at the open, and the Street making an airtight case to justify a DJIA P/E north of 30 !!
That may be several years out.
In the interim, we will have one or two 8% -11% corrections, even a mini-bear, as well as a flat 1,500- point, nine month trading range. The latter can be very profitable, but it takes precision timing.
More than likely, all these scenarios will kick off at higher levels.
In addition to targeting very short-term moves, I like to paint a picture of the big scene It is simply too easy to get so overly focused on the day-in-and-day-out activity that you miss a broadening top or bottom formation.
As savvy as many of us are, it is easy to lose sight of the big picture.
I will.
Taper talk is back, and the new bully on the Street is JOBs. A sharp increase would justify the first of many Fed tapers. Just talk of the subject nudges interest rates upward.
So, in spite of all that Vice-Chair Janet Yellen has said about Fed policy remaining accommodative, the Street keeps stirring the pot.
Traders who hung around for a half day, may lighten up today, since odds favor Monday won’t be as positive.*
TODAY: Good chance of a DJIA breakout through resistance ar !6,110 and running to 16,187. S&P 500 has a shot at 1,817)
Note: Does anyone doubt that by the close of trading at 1p.m. today, they will have heard enough about Black Friday to last a year. ?
Investor’s first read– a daily edge before the open
DJIA: 16,097
S&P 500: 1,807
Nasdaq Comp.4,049
Russell 2000: 1,141
Friday, Nov. 29, 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: $545.96) Positive.
AAPL’s three week consolidation was resolved on the upside with Tuesday’s high volume, $9 breakout at the open. Yesterday, AAPL added another $12 . Support should hold at $544. CLASSIC breakout from a consolidation pattern, which is no more than a rest period between a strong trend up. If anyone ever tells you technical analysis doesn’t work, or that no one knows where the market or a stock is headed, what they are really saying is, it is THEY who don’t know how to apply timing. It is a skill, not a science. It defies computerization. It is not flawless, since in this business there always several balls up in the air, any of which can plunge to change the picture.
Facebook (FB: $46.49) Positive
My suspicions of a phony H&S top were confirmed Tuesday and Wednesday with FB’s rebound. Nevertheless, FB must cross $49 to ice the deal.
IBM (IBM: $178.97) Neutral
Its breakdown from $186 to $181 cut IBM’s recent move upward short due a to Hedge fund short seller’s negative comments about IBM’ s future. IBM slipped below $179.35 support, so more probing for support is needed. It could slip to $174. While its trading volume was light yesterday, IBM made an effort to stabilize above $178 and could even move up across $182. What amazes me is that a hedge fund short-seller would comment negatively on a stock. What amazes me more is that his comments would be reported
Pulte Homes (PHM: $18.85) 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. Without traction, PHM will fluctuate between $18.45 and $19.30.
First Solar (FSLR:60.53) Positive (watch closely)
FSLR has spent the last 9 days consolidating its October/November move up from $40 to $66. Odds strongly favor a $2 to $3 jump, perhaps today.
Nike (NKE:$79.33) “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. – A plodder.
Hewlett-Packard (HPQ: $27.36) Positive.
Yesterday, I noted that HPQ’s stock was locked in narrow resistance/support channel between$24.85 and $25.60, and that a breakout either way could result in a 2-point move. It broke out on the upside Wednesday rising $2.27 points, thanks to a good Q4 report.
Polaris Inds. (PII:) Positive
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: $386.71) Positive
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:28.54) 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
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. 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.”
The economy is again a major impact factor of the stock and bond market since it stands to dictate Fed policy change.
(GET DETAILS: mam.econoday.com)
MONDAY:
Pending Home Sales Ix. (10:00): Declined 0.6 pct to 102.1, a 10-month low.
Dallas Fed Mfg Svy (10:30): Rose to 16.9 in Dec. from 13.3 in Nov.
TUESDAY:
ICSC Goldman Store Sales (7:45): Sales for major retail stores saw a 2.6 pct increase for the Nov 23 week
Housing Starts (8:30): Only permits available Oct. +6.2 pct vs. 5.2pct Sept.
FHFA House Price Ix, (9:00) House prices rose 0.3pct in September vs a gain of 0.4pct in August
S&P Case-Shiller : September, HPI (9:00) house prices here were 1.0 pct vs. +0,9 pct Y/Y gain is 13.3pct
Consumer Confidence (10:00) : Index dropped to 70.2 in Nov. from 72.4 Oct. which dropped from 80.2 in Sept.
Richmond Fed. Mfg Ix, (10:00) :Nice jump to 13 in Nov. from 1 in Oct.
WEDNESDAY
Durable Goods (8:30) :dropped 2.0 pct. Oct vs gain of 4.1 pct, Sept. Eccl Transport Oct was down 0.1 pct. after a 0.2% rise Sept.
Jobless Claims (8:30) : Dropped 10,000 to 316,000
Chicago Fed Nat’l Activity Ix. (8:30): slipped to a minus 0.18 pct. in Oct.
Chicago PMI (9:45) : Nov. was 63.0 vs. 65.9 in Oct. New orders continue strong.
Consumer Sentiment (9:55): Nov. index was 75.1 vs 73.2 Oct.
Leading Indicators (10:00): Advanced 0.2 pct in Oct. vs. increase of 0.9 pct Sept.
THURSDAY
Thanks giving day off.
FRIDAY
Fed Balance Sheet 4:30
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
WATCH” Stocks”
Nov 15 DJIA 15,876 “Yellen – No Taper – Surprise January Correction ?
Nov 18 DJIA 15,961 “Green Light to Load Up on Stocks ?
Hospital
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”
George Brooks
“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
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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. Brooks may buy or sell stocks referred to herein.
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