Better-Than-Expected Q1 Earnings ??

Investor’s first read Daily edge before the open

DJIA: 18,038
S&P 500: 2,107
Nasdaq  Comp.:5,035
Russell 2000:    1,265
Thursday, April 23, 2015   8:40 a.m.

CONCLUSION:
    The DJIA, S&P 500, the Nasdaq Comp.  are still locked in a three month trading range  generally (DJIA 17,600 – 18,200; S&P 500: 2,040 – 2,115; Nasdaq Comp.: 4,845 – 5,040). A breakout on the upside in face of numerous negatives would be very bullish.
    With the exception of the Russell 2000, the three major market averages have failed on three attempts to breakout since early February.
      However, yesterday’s strength indicates the market is poised for a breakout in coming days.
     
While there are a number of negatives clouding the picture, a prospective upgrade in Q1 earnings expectations may be the catalyst for the breakout.
     The Street has been projecting a drop of around 5.5% in Q1 earnings, however that drop is looking more and more like  4.5%.  Currently, earnings of oil-related and international companies are being adversely impacted by a recent plunge  in oil prices and surge in the U.S. dollar. 

Technical Analysis of the 30 DJIA Companies:   

On occasion, I technically analyze each of the 30 DJIA stocks for three near-term levels, a reasonable risk, a more extreme risk, and an upside potential. I add the results of each, then divide by the DJIA “divisor” (0.1498588) to get the DJIA for those levels.
    Currently, a reasonable risk is 17,687; more extreme risk 17,500; and upside potential: 18,157. Any further surge in the DJIA would require an upward adjustment in these “risk” levels.

TODAY: Mixed at the open.  Bulls should enter on weakness.     

KEY EXTERNAL FACTORS: 

Greece is again at risk of default.

-Yemen chaos may be cooling.

-Stock market bubble – China

-Q1 earnings for some companies will suffer from U.S. dollar’s strength and plunge in oil prices.
-Market still keyed on the Fed and it’s first bump up in interest rates, which with a slight softening in recent economic reports looks like it may happen later rather than sooner.

Concern that the U.S. economy is beginning to slump.

Note: Source of economic data

For a weekly economic calendar and good recap of  indicators, go to mam.econoday.com.

George Brooks
Investor’s first read
A Game-On Analysis, LLC publication

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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 in keeping with their tolerance for risk

 

 

 

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