Thursday, September 18 , 2014 9:16 a.m. BEFORE the OPEN
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The Street’s reaction to Fed Chief Janet Yellen’s press conference at 2:30 yesterday was restrained. Today’s market action is key to the near-to-intermediate term trend in stock prices.
The market appears to be unconcerned with international tensions, even the serious threat of ISIL. That can change if Russia crosses over into Ukraine.
Also of little concern currently is the outcome of the mid-term elections in November. That too can change in coming weeks.
Since there is no press conference scheduled after the October 28-29 FOMC meeting and no meeting at all in November, the Street can stop worrying about a change in Fed policy for a couple of months.
TODAY:
I still view a spike up in stock prices now as risky and believe odds are high for a correction this month or next. While yesterday’s reaction to Yellen’s comments, a strong follow through should follow through today, possible 150 – 200 Dow points. The key is, can the market hold the gain or does the BIG money use the rise to sell stocks.
Support todayis DJIA: 16,998; S&P 500: 1,982; Nasdaq Comp.: 4,540
Resistancetoday is DJIA: 17,240; S&P 500: 2,012; Nasdaq Comp. 4,587
Investor’s first read– Daily edge before the open
DJIA: 17,156
S&P 500: 2,001
Nasdaq Comp.:4,563
Russell 2000: 1,153
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THE FED: No more Yellen press conferences until Dec. 17
The Street wanted clarification on the Fed’s interpretation of interest rates remaining low for a “considerable time,” a term used since last March. They got it yesterday when Fed Chief Janet Yellen emphasized that rates are unlikely to rise quickly as the economy continues to improve, saying, “Even after employment and inflation are near mandate-consistent levels, economic conditions may for some time warrant keeping the target federal funds rate below levels the committee views as normal in the longer run.”
The Fed projects a rise in the Federal Funds rate to 1.375 by the end of 2015
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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 is forming to counter ISIL’s territory and influence quest.
This can get uglier than ugly where it is now. The possibility of a major war resulting must be considered.
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TECHNICAL ANALYSIS OF EACH OF THE 30 DOW INDUSTRIALS (9/12) 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 September 12, the near-term resistance level is 17,135; the primary support is 16,890 and secondary support is 16,500.
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THIS WEEK’s ECONOMIC REPORTS:
The center of focus this week will be the FOMC meeting and Fed Chief Janet Yellen’s news conference at 2:30 p.m. Wednesday. 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:
Empire State Mfg. Svy (8:30): September index up to 27.14 from 14.69 in August. New orders 16.86 up from 14.40
Industrial Production (9:15): August was down 0.1 pct. after a gain in July of 0.4 pct..
TUESDAY:
FOMC meeting begins
ICSC Goldman Store Sales (7:45): Dropped 2.6 pct in the Sept. 13 week over the prior week. Year/year is +3.0 pct..
PPI-FD (8:30): Unchanged in July. Ex food/energy was up 0.1 pct. vs. increase of 0.2 pct. June.
WEDNESDAY:
MBA Purchase Mtge Purchase Apps: (7:00): Purchase apps rose 5.0 pct. in Sept. 12 week vs. drop of 3.0 pct. in the prior week. Refi’s rose 11.0 pct. after a drop of 11.0 pct. the prior week.
Consumer Price Ix.(8:30): Unchanged in August vs. a rise of 0.1 pct. in July
Housing Market Ix.(10:00): Sept. Index up to 59 from 55 in Aug..
FOMC announcement (2:00):
Fed press conference – Yellen (2:30):
THURSDAY:
Jobless Claims (8:30): Down 36,000 to 280,000 in the Sept. 13 week
Housing Starts (8:30): Down 14.4 pct. in Aug; Starts down 5.6 pct..
Philly Fed Svy (10:00)
FRIDAY:
Leading Indicators (10:00):
Quadruple Witching Friday
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RECENT POSTS:
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
Sept. 12 DJIA 17,049 The Fed, Elections, Geopolitics Stymie Bulls
Sept. 15 DJIA 16,987 A Brief Yellen Rally This Week ?
Sept. 16 DJIA 17,031 Street Keying on Yellen’s Wednesday Comments
Sept. 17 DJIA 17,131 Yellen Rally Risky – Raise Some Cash
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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