Wednesday, September 17 , 2014 9:16 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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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.
TODAY:
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 read– Daily edge before the open
DJIA: 17,131
S&P 500: 1,992
Nasdaq Comp.:4,568
Russell 2000: 1,150
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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.
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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):
FOMC announcement (2:00):
Fed press conference – Yellen (2:30):
THURSDAY:
Jobless Claims (8:30):
Housing Starts (8:30):
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
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.
