Street's Bullishness Mounting

George Brooks |

Thursday, November  6, 2014     9:12 a.m.  DAILY BEFORE the OPEN

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Daily:Boiling down fundamental, technical, economic,

monetary, fiscal, psychological, and seasonal data into a quick read.

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   The Bull Market has clearly climbed a wall of worry with the S&P 500 up more than 200% in less than six years.

   It has done that in spite of dysfunction in Washington. 

   President Obama is not the only one looking to his legacy, so too will be Senator Mitch McConnell (72), who will want to show legislative progress.  McConnell, a master politician, will have his hands full  as he prioritizes issues and attempts to establish a workable rapport with the President and Democratic  Senators.

    The House may be a different story.  Given its new numbers, it may seek to take its attack on the President to even higher levels – a negative for the market.

TODAY:

    Yesterday’s market was not as buoyant as one would expect, but the Street is still weighing in on the prospect for tax reform and other business-friendly legislation.  Just the  perception of a better climate for big and little business should boost its appetite for risk investments.

    The Street  wants more out of this bull and has the clout to make that happen. With Q3 earnings reports mostly out, the Street will now be looking to Q4 and beyond.

    It’s vision will be reflected in stock prices.  If the outlook is positive, expect bids to be firm and dips limited, a “step-up” market action with few corrections.

    A bright outlook for earnings, a Congress of its choice, and the consistent seasonal pattern of strong markets between November 1 and May 1,  stands to produce an extension of  the bull market started in March 2009.

    That’s conventional reasoning. Contrary thinkers will be expecting just the opposite.

Resistancetoday starts at DJIA: 17,602; S&P 500: 2,031; Nasdaq Comp.: 4,651

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Investor’s first readDaily edge before the open

DJIA: 17,484

S&P 500:  2,023                               

Nasdaq  Comp.: 4,620

Russell 2000:1,167

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    BEST SIX MONTHS for OWNING STOCKS (Nov. 1 to May 1)*

   This six months period has consistently outperformed the six months between May 1 and November 1, though both have been interrupted by counter moves.

    It is important to consider the possibility that the six month period starting Monday will be an exception.  This would not only go counter to the Best Six Months pattern, it would contradict the market’s bullish record for rising  in pre-presidential  election years.

    If the Washington scene has been ugly and dysfunctional over the last four years, it stands to get even more so regardless of who comes out ahead next Tuesday.   Just keep an open mind.  None of these seasonal tendencies is infallible.  These seasonal patterns, and others are presented in great detail in the Stock Trader’s Almanac – “must” reading.

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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS   (10/30 close)

By technically analyzing each of the 30 Dow industrials then using the Dow “divisor” to convert the data back into the DJIA, I can get a better read on what is primary support and a secondary support.

  As of the 10/8 close:  Resistance 17,532; Primary Support: 17,052; and Secondary Support: 16,930.

   NOTE: These calculations generally hold for longer periods of time, but need to be changed when the market is hit with excessive volatility.

   The resistance and support levels listed daily may differ, since they are shorter term.

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THIS WEEK’s ECONOMIC REPORTS:

     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:

PMI Mfg Ix. (9:45): Oct. index down to 55.9 from 57.5 in Sept.

ISM Mfg. Ix (10:00): Oct. up to 59.0 from56.6 in Sept..

Construction Spend (10:00): Sept. down 0.4 pct. after  drop of 0.5 pct in Aug.

Global Mfg. Ix. (11:00): Sept. unchg. At 52.7

TUESDAY:

ICSC Goldman Store Sales (7:45:) Down 1.6 pct.  in Nov 11, week vs. gain of 0.3 week prior;   Year/year is +1.8 pct.

Factory Orders (10:00): Sept. down 0.6 pct. vs decline of 10.0 pct. revised Aug.

WEDNESDAY:

MBA Purchase Apps, Refi’s (7:00):Purchases up 3.0 pct. in Oct 31 week vs -5.0 prior week; Refis down 6.0 pct vs -7.0 prior week

ADP Employment 8:15): Oct private payrolls were 230,000 vs 225,000 week ago

Fed’s Kockerlakota speaks (9:15):

Fed’s Lacker speaks (9:30):

PMI Services Ix.(9:45): Index was 57.1 in Oct. down from 58.9 in Sept.

ISM Non-Mfg Ix (10:00): Oct Index was 57.1 vs. 58.6 in Sept.

Fed’s Rosengran speaks (10:00)

THURSDAY:

Jobless Claims (8:30): Down 10,000 to 278,000 in Nov. 1 week

Productiviy/Costs (8:30):

FRIDAY:

Employment Situation (8:30):

Consumer Credit (3:00):

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RECENT POSTS:

Oct. 20   DJIA  16,380   Critical Week for Bulls

Oct. 21   DJIA  16,399   Market Attacking Key Resistance

Oct. 22   DJIA   16,614  Just a Rally of End of the  Correction ?

Oct. 23   DJIA   16,461  BIG Day for Economic Reports

Oct. 24   DJIA   16,677  DJIA – a Portfolio of Small Cap Stocks ?

Oct. 27  DJIA    16,805  Wednesday: Wall Street: Pass, or Fail

Oct. 28   DJIA   16,817  Bullard Bull !!

Oct. 29   DJIA   17,005  Fed Decision – Major Market Reaction ?

Oct. 30   DJIA   16,974  Interest Rate Angst Next

Oct. 31   DJIA   17,195  Raise Some Cash

Nov. 3    DJIA   17,390  New Era for Stocks ????

*Stock Trader’s Almanac

George  Brooks

A Game-On Analysis,  LL

“Investor’s first read – a daily edge before the open”

Brooks007read@aol.com

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 or as investment advice 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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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