Tuesday, October 7, 2014 8:58 a.m. 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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Bulls hung on yesterday, but the market is nervous about Q3 earnings and beyond. The strong U.S. dollar stands to adversely impact earnings of some multi-national companies.
While the Street’s focus will be on corporate earnings this month, the combined impact of the IS, weakness in economies abroad, the Fed’s last bond purchase this month, the timing of an increase in interest rates, and mid-term elections give investors a lot to think about.
The market has rebounded sharply over the last three days, giving the Bulls reason to believe the correction is over.
Odds favor a sideways trend with slight upward bias going forward, BUT this is October and all bets are off. Bear markets started in October 1983 and 2007. Bear markets ended in 1974, 1987, 1990, 1998, 2002.
TODAY:
With a plate full of uncertainties like that, volatility stands to dominate trading in coming weeks. A break below DJIA 16,795; S&P 500: 1,947; Nasdaq Comp. 4,404 flash a serious warning signal about another leg down.
Minor supporttoday is: DJIA: 16,951; S&P 500: 1,960; Nasdaq Comp.: 4,442.
Resistance todayis: DJIA: 17,076; S&P 500: 1,971; Nasdaq Comp.: 4,472.
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Investor’s first read– Daily edge before the open
DJIA: 16,9911
S&P 500: 1,964
Nasdaq Comp.:4,454
Russell 2000: 1,094
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TECHNICAL ANALYSIS EACH of 30 DOW INDUSTRIALS (10/3 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 10/3 close: Resistance 17,260; Primary Support: 16,824; and Secondary Support: 16,741.
The resistance and support levels listed daily may differ, since they are shorter term.
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INTERNATIONAL TENSIONS:
Ukraine/Russia – Quiet for now, but has the potential to get uglier.
ISIS/Iraq/Syria – A Euro/Mid-East coalition has formed to counter ISIL. A full-blown bombing mission has been undertaken, which stands to be ongoing. Psychologically, that stands to play well in America, which has been warned of future terrorist activity. The possibility of a major war resulting must be considered.
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THIS WEEK’s ECONOMIC REPORTS:
Light week for reports on the economy. FOMC meeting, minutes released Wednesday, but no press conference 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.”
TUESDAY:
ICSC Goldman Store Sales (7:45):
Consumer Credit (3:00):
FOMC Meeting begins
WEDNESDAY:
MBA Purchase Apps/ Refi’s (7:00):
FOMC Minutes (2:00): No Press Conference
THURSDAY:
Jobless Claims (8:30):
Wholesale Trade (10:00):
FRIDAY:
Import Export Prices (8;30):
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RECENT POSTS:
Sept, 24 DJIA 17,055 Critical Crossroads for Money Managers
Sept. 25 DJIA 17,210 Back to Tug of War – Bulls vs. Bears
Sept 26 DJIA 16,945 Moment of Truth for Market’s Direction
Sept. 29 DJIA 17,113 Huge Test for Bulls Today
Sept. 30 DJIA 17,071 Big Move in Market for Winner of Tug of W ar
Oct. 1 DJIA 17,042 October – Risk or Opportunity ?
Oct. 2 DJIA 16,804 October Opportunity But Angst in Interim
Oct. 3 DJIA 16,801 Rally Today Must Hold
Oct. 6 DJIA 17,009 Best Six Months for Owning Stocks Looms ?
*Stock Trader’s Almanac
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 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.
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