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Stock Market Bubbles Don’t Burst to a Full House

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

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 reada 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


   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


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 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.



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.


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.


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.


Thanks giving day off.


Fed Balance Sheet 4:30


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 ?


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”

[email protected]

*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 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.










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