Corrections are a healthy part of upswings as long as new negatives don’t surface after the market has dropped and is poised to rebound.
The bulls have run the show non-stop since a 4.4% rally began in mid-May, and some consolidation is justified.
The only news of interest prior to the open is positive as Mortgage Bankers’ Applications where apps for mortgages were up 9.0%, refi’s up 11.0% in the June 6 week.
That suggests the pre-open weakness is “technically oriented, a temporary imbalance of buyers and sellers.
The thing to watch here is the “trampoline” (bounce) effect. An old soft ball bounce indicates more downside, a golf ball bounce indicates an imminent recovery.
Support today is DJIA: 16,856; S&P 500: 1,938; Nasdaq Comp.: 4,307
Resistance today is DJIA: 16,896; S&P 500:1,943; Nasdaq: 4,317
A one-day reversal where the market averages recoup their entire loss for the day would very bullish.
Investor’s first read– Daily edge before the open
S&P 500: 1,950
Nasdaq Comp.: 4,337
Russell 2000: 1,172
Wednesday, June 11, 2014 9:15 a.m.
The European Central Bank’s cut of its benchmark interest rate and announcement to employ additional measures to stimulate European economies stands to help the U.S. economy, as well. It did little to boost stock markets abroad which are trading at six-year highs, suggesting the move was already discounted. Even so, let’s consider it a positive.
TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS
At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself. The DJIA is a price-weighted average and subject to distortion by higher priced issues.
As of June 9, the support for this calculation is 16,801 and resistance is 17,176.
Note: My daily support/resistance levels are more short-term oriented.
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.”
NFIB Small Bus. Optimism Ix. (7:30): May index up to 96.6 from 95.2
ICSC Goldman Store Sales (7:45) Sales down 2.8 pct. in June 7 week from a gain of 2.9 pct. the prior week. Year/year now +3.0 pct. vs +3.1 pct.
JOLTS (10:00) Job Openings/Labor Turnover improved beyond expectations with 4.455 million job openings at the end of April vs 4.166 million in March. The hires-to-separations ratio remained unchanged.
Wholesale Trade (10:00). While inventories rose 1.1pct., sales rose 1.3 pct, keeping the stock to sales ratio
MBA Purchase Apps (7:00) Mortgage apps surged 9.0 pct and refi’s 11.0 pct. in the June 7 week
Treasury Budget (2:00)
Jobless Claims (8:30)
Retail Sales (8:30)
Bus. Inventories (10:00)
June 2 DJIA 16,717 Decision Time for Stocks ?
June 3 DJIA 16,743 Economy “Must” Accelerate, or…
June 4 DJIA 16,722 Correction in Stocks Without Robust Economic Rebound
June 5 DJIA 16,737 Bulls Must Pick It Up, or Lose the Ball
June 6 DJIA 16,836 Easy Does It ! Dow 20,000, But Not in Straight Line
June 9 DJIA 16,924 Stock Market Breakout – Now What ?
June 10 DJIA 16,943 Greed/Fear Ratio, Not P/Es, Drive the Market
A Game-On Analysis, LLC publication
“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 investment advice or 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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