Yellen Rally Risky - Raise Some Cash

George Brooks |

WednesdaySeptember  17 , 2014     9:16 a.m.  BEFORE the OPEN


Daily:Boiling down fundamental, technical, economic,

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


   This is the “spike” up I have been alerting readers to, one which I believe is risky for new buyers, since I have also been expecting a September/October correction.

   The extent of a correction depends on news flow, especially the potential for new negatives along the way that transforms a modest correction of 3% 5% into a bigger on of 8% -12%.

    Current negatives are no more formidable than those faced over the years since early March 2009 when the bull market was launched.  Some were far worse. But the market is at all-time highs now, ergo more risk.

    The market has not had a correction greater than 10% in three years.  Every attempt to drop is met by buyers who simply see no other place to invest their money.


   I think there is risk in jumping on a sharp  rally here. In fact, a cash reserve would protect  a portfolio against a market drop, as well as give  an investor the ability to invest  at better prices if that were to happen.

   Yesterday’s spike suggested the Street does not expect Fed Chief Janet Yellen to indicate that the Fed will raise its benchmark interest rate before Q2.

The rally will spike further if that is the case, but I suspect it will fail, if not today, than in a matter of days.

    The uncertainty of the mid-term elections will begin to impact the market in coming weeks, along with the situation in Ukraine and Mid-East.

    Expect the market to be moderately upbeat until 2:40 p.m. then to rally  until a sell off in the last 40 minutes of trading.  That assumes Yellen will not hint at an earlier-than-expected rise in interest rates.

Support todayis DJIA: 17,076; S&P 500: 1,990; Nasdaq Comp.: 4,538

Resistance todayis DJIA: 17,265; S&P 500: 2,113; Nasdaq Comp.: 4,587

Investor’s first readDaily edge before the open

DJIA: 17,131

S&P 500: 1,992

Nasdaq  Comp.:4,568   

Russell 2000: 1,150


THE FED: After today – no  more  Yellen press conferences until Dec. 17

   The Street is anxiously awaiting Fed Chief Janet Yellen’s press conference today at 2:30 pm in hopes it will get  a better feel for the timing of an increase in the Fed’s benchmark interest rate. The Fed’s bond purchase program is scheduled to end in October.

   This is Yellen’s last chance to comment on interest rates until  The December 16-17 FOMC meeting, since no press conference is scheduled for the October 28-29 meeting and there is no November FOMC meeting.






   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.



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.



    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 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.”


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..


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.


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):

FOMC announcement (2:00):

Fed press conference – Yellen (2:30):


Jobless Claims (8:30):

Housing Starts (8:30):

Philly Fed Svy (10:00)


Leading Indicators (10:00):

Quadruple Witching Friday



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

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.












DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Emerging Growth

Propanc Health Group Corp

Propanc Health Group Corp is an early stage healthcare company. It is engaged in developing new cancer treatments for patients, suffering from pancreatic and colorectal cancer.

Private Markets

Initial State

Initial State is an Internet of Things (IoT) data analytics & data management platform company. We turn sensor and event data into information that matters by making it easy to…


Blockchain currencies (e.g. Bitcoin) provide a new disruptive way to transfer value between parties over the internet as opposed to going through banks. GoCoin provides online merchants with a suite…