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The Fed, Elections, Geopolitics Stymie Bulls

Friday,  September  12 , 2014     9:18 a.m.  BEFORE the OPEN Daily:Boiling down fundamental, technical, economic, monetary, fiscal, psychological, and seasonal

FridaySeptember  12 , 2014     9:18 a.m.  BEFORE the OPEN

Daily:Boiling down fundamental, technical, economic,

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


   The Bulls stepped up and held the line Wednesday and Thursday, averting a breakdown from a weakening  11-day consolidation area that was capable of supporting one more spike up in the market.

   The Street is not able to decide whether to buy aggressively here, defer purchase or sell, as evidenced to the market’s irrational pattern, failure to follow through on moves up or down.

    International events are a drag, but continued anxiety about the timing of the Fed’s increase in interest rates  is an uncertainty that baffles the Street. One day, there is impressive buying, the next day unnerving selling. 

   While the mid-term elections  (Nov. 4) don’t appear to be having an impact on the market, they will begin to next month – a lot at stake.


   The Street is hoping for clarification about the timing of a Fed increase in rates out of its FOMC meeting and press conference next Wednesday.

   Pre-market trading in the stock index futures suggests a mixed open.  

   The major market averages are locked in a trading range between:

DJIA 16,974 and 17,137;  S&P 500: 1,982 and 2,007; Nasdaq Comp. 4,542 and 4,600.

    I have been expecting a correction in September/October. That can start any day, but there still is a chance of one more spike up before that occurs.

    This is a tough read – guessing on the outcome is risky.

Investor’s first readDaily edge before the open

DJIA: 17,049

S&P 500: 1,997

Nasdaq  Comp.:4,591   

Russell 2000: 1,172



A surprise economic stimulus move by the European Central Bank (ECB) is driving the euro down sharply. The ECB  cut its refinancing rate, reduced its deposit facility rate , lowered its lending facility, and initiated the purchase of euro-denominated covered bonds  in an effort to jolt European economies out of lethargy. While the U.S. economy continues to inch forward, it could use help from abroad.



   Ukraine/Russia – quiet for now, but has the potential to get uglier.

   ISIS/Iraq/Syria – A Euro/Mid-East coalition is forming to counter ISIL’s territory and influence quest.


TECHNICAL ANALYSIS OF EACH OF THE 30 DOW INDUSTRIALS (9/5)  At key junctures, I technically analyze each of the 30 Dow industrials, then using the Dow’s “divisor” convert these results back into the DJIA. I seek a near-term resistance level and a primary and secondary support level.

   As of Aug 29, the near-term resistance level is 17,318; the primary support is 16,990 and secondary support is 16,912.


INTEREST RATES:On numerous occasions, I have reminded readers that stock prices can rise along with interest rates, but to a point where higher rates draw money away from stocks to bonds and where higher rates adversely impact the economy. Realistically, that point must be a lot higher than the zero-based interest rates existing today. I conceded that the stock market would take a brief hit when a move to higher rates was perceived by the Street, but stabilize before moving higher.

    A recent study by Andrew Garthwaite, chief equity strategist for Credit Suisse concludes just that. Since 1977, he found the S&P 500 peaked no earlier than four months prior to the Fed’s first rate increase, but gained as much as 4 percent in the six months after the first increase. He notes, that while rate rises have increased volatility in the stock market, they did not mark the end of the bull market.



    Very light week for reports.  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.”


NFIB Business Optimism Ix. (7:30): Index for August was up 0.4 points to 96.1

ICSC Goldman Chain Store Sales (7:45): Sept. 6 week sales up 0.7 pct. ; Year/year up 4.0pct.

JOLTS – Job Openings/Labor Turnover (10:00):There were 4,675 million job openings in July unchanged from June – the hires ratio was 3.5 pct./separations ratio 3.3 pct.


MBA Mortgage Purchase Apps (7:00): Purchase apps were down 3.0 pct and refi’s down 11.0 pct. in the 9/5 week

Wholesale Trade (10:00): July inventories were up 0.1 pct. but sales  were up 0.7 pct – stock-to-sales are 1.16.


Jobless Claims (8:30): Up 11,000 to 312,000 in week ended 9/6.


Retail Sales (8:30): Up 0.6 pct. in Aug. vs a gain of 0.3 pct. in July. Ex auto/gas gain was +0.5 pct.

Import/Export Prices (8:30):

Consumer Sentiment (9:55):

Business Inventories (10:00):



Aug  26  DJIA   17,076  Bull/Bear Tug of War at S&P 2000 Level

Aug  27  DJIA   17,106  Market poised for Sharp Move

Aug  28  DJIA   17, 122 2,000 on S&P 500 – Floor or Ceiling ?

Aug 29   DJIA   17, 079 How Long Will Bulls Prop the Market ?

Sept.  2   DJIA  17,098  What are Odds of a Big Correction of 8% – 12% ?

Sept.  3   DJIA  17,067  Breakout and Run – Followed by a Crunch

Sept. 4    DJIA  17,078  Bulls “Must” Take Charge NOW

Sept. 5    DJIA  17,069  Market to Tip Its Hand Today

Sept. 8    DJIA  17,173  Bullish Storm Surge Imminent ?

Sept. 9    DJIA  17,111  Bulls to be Tested Today

Sept. 10  DJIA  17,013  Stock Market Back on the “Edge”

Sept, 11  DJIA  17,068  Last Chance for Bulls to Avoid Crunch

A Game-On Analysis,  LLC publication

George  Brooks

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

[email protected]

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.