The Ryan/Murray budget deal now goes to both Houses of Congress where passage is uncertain. Among other things, it averts mid-January shutdown of the government .
This deal and a Congressional approval may just set a new tone for semi-compromise in 2014, an election year. The accord does ease some of the pain of sequestration $40 bil.. 2014, $20 bil. 2015. Neither side got all they wanted.
A more positive , less rigid ideological tone in Congress would inject badly needed CONFIDENCE in our government, and confidence spells a greater expansion of P/Es which may be necessary if bottom lines struggle.
NEXT ! The December 18 announcement by the Fed on its taper decision.
Bloomberg survey: 12 of 35 economists expect a December 18 taper; 9 expect a January 30 taper; and 14 expect a March 20 taper.
Any meeting when the FOMC announces a taper would have to be accompanied by a Fed Chair press conference and business summary. January’s FOMC meeting does not have that scheduled. If the Fed were to suddenly schedule a press conference for January, it would be a tip off in advance.
FOMC meetings next six months:
December 17 – 18
January 29 – 30, 2014
March 19 – 20
April 29 – 30
June 17 – 18
July 29 - 30
We would get our best read from this market if the DJIA dropped to 15,875 (S&P 500: 1,792. That would give us a feel for how much is in the bear’s tank. If a lot, we are looking at a drop to 15,575 (S&P 500:1,752).
A rise above DJIA 16,030 (S&P 500: 1,815) signals a strong chance of a year-end rally, maybe a big one.
Investor’s first read– a daily edge before the open
S&P 500: 1,802
Russell 2000: 1,119
Wednesday, Dec. 11, 2013 9:20 a.m.
Nevertheless, DO NOT take your eye off what is happening, especially to overly depressed stocks. While you are shopping, enjoying lunch-time “cheer,” or scrambling for one thing or another, THINGS WILL be happening. That stock you were planning to buy, but felt there was plenty of time to buy it, could easily rise 3% -4%, even in a down market. It’s happened to me too often.
Just a reminder: Anyone keeping track of the breadth of the market (advances/declines) should realize the year-end maneuvering will distort the numbers, often favoring decliners.
NOT ROCKET SCIENCE !
This doesn’t have to be rocket science. Common sense and sensitivity to the emotions that are driving stock prices is key, because the level of the stock market, and stocks, is a matter of opinion. For proof, look at the varying levels and valuations the market and stocks reach over months, years. Confidence rules – too little, too much, a change for better or worse. Step back, ask, what drumbeat is the market marching to right now ? It would be nice to have a perfect formula for all the calls needed, but that would simply cause everyone to do the same thing at the same time, negating its value.
TIMING – OPPORTUNITY STOCKS New addition planned: alert to stocks with emerging technical patterns with potential.
The following are based on technical analysis only and are not to be taken as buy or sell recommendations, but as one of many factors that must be considered in the decision process. Comments do not take into consideration earnings reports, or changes in institutional ratings, company guidance. Technical analysis is based on one’s interpretation of the impact buying and selling have on the price of a stock and is therefore not an exact science. News and events can change an interpretation instantly.
Apple (AAPL: $565.55) Positive.
Thursday’s reversal and Friday’s drop looked like a combination of selling into the news (China/iPhones) and selling into a strong market rally. Monday’s bounce off $560 support improved AAPL’s pattern though yesterday was disappointing. There is still a seller there at $567 and$568. Support is $564, though AAPL could slip to $562, in face of profit taking. It can still run across $570 and on to 52-week high $575, it’s just that time of the year, crosscurrents and all.
Facebook (FB:$50.24) Positive
As expected, FB broke through support ($49.75) and pushed into the 50s. Resistance is $52.60. Support is now $49.80.
IBM (IBM: $177.12) Neutral/Negative
No change: IBM is still struggling with an irregular base. Overhead supply between $178 and $181 is very formidable. IBM trying to stabilize at $175. Failure indicates a test of $172.60. This is painful to watch. I plan to replace IBM. If in fact it slips below $170 and tumbles in a selling climax, I will pick it up again, seeking to target a bottom, but this isn’t much help to anyone.
Pulte Homes (PHM: $18.43) Positive
Little change from Friday’s post - While PHM got a big boost from Fed Vice-Chair Janet Yellen’s assurance the Fed will continue to accommodate the economic recovery and especially housing, the industry must now demonstrate it can gain traction. That may be in the works with the big jump in October’s New Home Sales. PHM should attract buyers in this area. if housing is a “go.” PHM spiked up on Monday and Tuesday, but ran into a wall, though it nearly got to $19 yesterday.
]Support is $18.20 - $18.40Resistance is $18.95
First Solar (FSLR:$56.49) Positive
FSLR stabilized after Deutsche reported it believed concern for China’s solar industry is “overdone.”. ”FSLR has dropped sharply recently in face of a sharp drop in ReneSola (SOL) which reported greater than expected Q3 losses. Deutsche doesn’t expect demand for solar in China to drop year-over-year and re-iterated its buys on Trina Solar (TSL) and Yingli Green (YGE). Yesterday, I indicated FSLR desperately needed an institution to step up and clarify FSLR’s fundamental situation. Deutsche’s comments help, but FSLR needs more than that. Stock is trying to hold at $56. Stock is a wide swinger. Good news could get it back to $50.
Nike (NKE:$79.22) “the inchworm” Positive
Small wonder why I named NKE the inchworm ? – little moves in both directions but generally up. Looks like profit taking for the 2013 year is holding NKE back, though I am still uneasy about retail. Support $78.80. Resistance 79.76.
Hewlett-Packard (HPQ: $27.04) Positive.
No change: Consolidating surge two weeks ago. Support at 27 must hold or HP slides to $25.80 - $26.20.
Polaris Inds. (PII:) Positive
Third straight breakout in a row, but yesterday’s spike got hit by profit-taking.
Support is $137.60. Resistance is $139.80.
Amazon (AMZN: $387.78) Positive
No change: Break above $388 paves way for $394 and possible new 52-week high $399.
Pandora Media (P:29.25) Positive.
Yesterday, I said P was like following a drunk driver. More often than not, P gets hit by sellers every time it jumps sharply. Support is now $28.10. Resistance is $30.
Definitely not a stock for light sleepers. Has its lovers and haters.
A much lighter week this week. The Street will parse words from Fred speakers Monday (see below)
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.”
Fed’s Lacker speaks (12:30 p.m.)
Fed’s Bullard speaks (12:50 p.m.)
Fed’s Fisher speaks (2:15 & 6:30 p.m.)
NFIB Business Optimism Ix. (7:30) Rose to 92.5 in Nov. vs. 91.6
JOLTS (10:00) - Job Offers & Labor Turnover : Openings forecast for last day of Oct., were 3.925 million vs. 3.883 million Oct.
Wholesale Trade (10:00) : A heavy build in Q3 is now a concern for Q4 which opened up with a sharp 1.4 pct rise in Oct vs. a 1.0 pct rise in sales, however inventory to sales ratio is 1.18 vs. 1.17 in July.
Treasury Budget (2:00 p.m.)November -$155 billion
Jobless Claims (8:30) November 325,000 week end 12/7
Retail Sales (8:30) November +0.6 pct., excl auto: +0.3 pct.
Import/Export Prices (8:30) Nov. -0.8 pct import price, -.03 pct. export prices.
Business Inventories (10:00) Oct. =0.3 pct
Producer Price Index (8:30) Nov. -0.1 pct.
RECENT POSTS - 2013
Nov 12 DJIA 15,783 “Get Ready for Year-End Cross Currents”
Nov 13 DJIA 15,750 “Money Manager Dilemma – Your Problem, as Well
Nov 14 DJIA 15,821 “Feeding Frenzy in 2014’s Winners ? Big Day for “TECH
Nov 15 DJIA 15,876 “Yellen – No Taper – Surprise January Correction ?
Nov 18 DJIA 15,961 “Green Light to Load Up on Stocks ?
Nov 25 DJIA 16,064 Fetch the Blinders – Here come the forecasts
Nov 26 DJIA 16,072 Time to Shop for New Winners and Old Winners Getting
Whacked by Profit-Taking”
Nov 27 DJIA16,072 “December Head-Fakes Galore – Raises Risks”
Nov 29 DJIA 16,097 “Stock Market Bubbles Don’t Pop to a Full House”
Dec 2 DJIA 16.086 “Serious Stuff Coming This Week and Next”
Dec 3 DJIA 16,008 “Hunting Season – Be Armed and Ready”
Dec 4 DJIA 15,914 “Holidays, Or Not, DO NOT Take Your Eye Off This Market”
Dec 5 DJIA 15,889 “December’s Two Dilemmas – Watch Your Back”
Dec 6 DJIA 15,821 “No Fed Taper=December Rally – Correction Q1 ?
Dec 9 DJIA 16,020 “Investor Angst Intensifies”
Dec 10 DJIA 16,025 “ Two Big Dates Loom – What to Watch”
“Investor’s first read – an edge before the open”
*STOCK TRADERS ALMANAC
: The new annual Stock Trader’s Almanac is off the press. This is a “must,” always has been, if you are a serious investor, or intend to be a serious investor. Visit stocktradersalmanac.com
The writer of Investor’s first read, George Brooks, is not 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. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk. Brooks may buy or sell stocks referred to herein.
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