Bulls Need a Follow Through

Investor’s first read Daily edge before the open

DJIA:  16,472
S&P 500: 1,951
Nasdaq  Comp.: 4,707
Russell 2000: 1,222

Monday:  Oct. 5, 2015   9:15 a.m.

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     Global stock markets continue to welcome bad news as “good,” with surges here and abroad. 

      Friday’s 8:30 jobs report fell far short of expectations converting  what was going to be a strong open into a sharp sell off before the open. 

      But buyers jumped on the weak open when it dawned on them that a softening economy  pretty much pushes a Fed increase in interest rates into 2016.

      The conclusion by the Street  that, “Bad news is bullish – good news bearish” has been the Street’s drumbeat for years.  It will change abruptly some day when “bad” is truly bad, that regardless of what the Fed does, the economy and stocks are headed south, non-stop.

       Like it or not, this is the game we must play. My point here is, just be open to the fact this illogical thinking will change some day when buying bad news marks a market top.   

TODAY: 

       Extreme volatility has characterized trading off and on for years.    What is needed by the bulls is a follow through, more than a one or two day move, but a trend upward, with buyers on dips.

       If the bulls are going to get this, now is the time for it. A breakdown below DJIA 16,016 (S&P 500: 1,908) would set the stage for a major drop in prices.       

…………………………………………………………………………….

RESISTANCE today:  DJIA: 16,617; S&P 500:1,968; Nasdaq Comp.:4,751.

SUPPORT today:  DJIA: 16,326; S&P 500: 1,936; Nasdaq Comp.: 4,661

…………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.     >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

WHAT THE FED SHOULDS DO:

       No fewer than six (6) Federal Reserve heavies speak starting at 8:30 and ending at 1:00p.m..  WOW !  Six in one day, – That, and Hurricane Joaquin all for one weekend !

        What the Fed should do is what all of us investors, analysts, etc who have been in this for a while have learned to do  and that is to come out and admit they erred by inaction in the past and now with  implying a rate increase was likely by year-end. “We were wrong” –  Say it !  The numbers don’t justify it now.  Then  add, “When the numbers and international risks justify it we will raise rates, not before.”

      The Street is as much to blame as the Fed. It’s all about the Fed – Will it ? Won’t it ?  The Street  should get back to basics – the bigger picture – earnings one year out, not this asinine quarter-to quarter stuff; the big economic picture here and abroad, U.S. Governance, Corporate responsibility.

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  October, 2 2015,  a reasonable risk is 16,260 a more extreme risk is 16,155. Near-term upside potential is 17,164.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but “at risk” of  a bear market.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  but will likely drop to a lower level.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

*Stock Trader’s Almanac ( New edition should be out)

…………………………………………………………

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Huge Test for Bulls – Huge !

Investor’s first readDaily edge before the open

DJIA:  16,272
S&P 500: 1,923
Nasdaq  Comp.:4,627:
Russell 2000: 1,097

Friday:  Oct. 2, 2015   9:15 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////    

      Bearish sentiment was jolted Tuesday, Wednesday, and Thursday as stocks stabilized and rebounded.

      But the bears were quick to jump all over an upside breakout at the open yesterday driving down stocks sharply until noon when buyers finally stepped in to end  the rout and work stocks back up to even at the close.

     One hour before the open today, it looked like the market would be opening up, with futures trading nicely on the upside.

      That’s when the Employment Situation report hit with only 143,000 new jobs posted in September well below the Street’s comfort level.

      Instantly, the market tanked.    While motor vehicle sales in Sept. were solid, construction spending on single-family and multi-family homes  improving, both the PMI Manufacturing and the ISM Manufacturing indexes signal trouble. And now a weak employment report to confirm some cracks in the foundation. All this with economies abroad  struggling.

TODAY:     

This looks like a goal line stand for the bulls. A breakdown from here signals another leg down and it will be ugly.

      No fewer than six top level Fed execs speak today starting at 8:30 and ending at 2:00 p.m.

      What did they know in advance ?

…………………………………………………………………………….

SUPPORT today:  DJIA: 16,027; S&P 500: 1,891; Nasdaq Comp.:4,551

…………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.     >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

WHAT THE FED SHOULDS DO:

       No fewer than six (6) Federal Reserve heavies speak starting at 8:30 and ending at 1:00p.m..  WOW !  Six in one day, – That, and Hurricane Joaquin all for one weekend !

        What the Fed should do is what all of us investors, analysts, etc who have been in this for a while have learned to do  and that is to come out and admit they erred by inaction in the past and now with  implying a rate increase was likely by year-end. “We were wrong” –  Say it !  The numbers don’t justify it now.  Then  add, “When the numbers and international risks justify it we will raise rates, not before.”

      The Street is as much to blame as the Fed. It’s all about the Fed – Will it ? Won’t it ?  The Street  should get back to basics – the bigger picture – earnings one year out, not this asinine quarter-to quarter stuff; the big economic picture here and abroad, U.S. Governance, Corporate responsibility.

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 28, 2015,  a reasonable risk is 15,586 a more extreme risk is 15,079. Near-term upside potential is 16,575.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but “at risk” of  a bear market.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  but will likely drop to a lower level.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

*Stock Trader’s Almanac ( New edition should be out)

…………………………………………………………

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bulls MUST Step In NOW, or………….

Investor’s first read Daily edge before the open

DJIA:  16,284
S&P 500: 1,920
Nasdaq  Comp.4,620:
Russell 2000: 1,00

Thursday:  Oct. 1, 2015  9:12 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////    

      Bearish sentiment was jolted Tuesday and Wednesday as stocks stabilized and rebounded.

      Tuesday,  I gave the  market averages an outside chance of reaching   DJIA: 16,494 ;  S&P 500: 1,952; Nasdaq Comp.:4,738.  Tuesday  featured enough “churn” to stop the bears;  Wednesday was up  sharply  and today looks like it will get off to a good start. I accompanied that projection

        Fed Chief Janet Yellen spoke at 3:00 p.m. yesterday making what was perceived as  “hawkish” comment, noting that the economy’s improvement in recent years has been “significant.”  Well now, that was profound.  Come to think of it, she’s right. Now that the Fed is running on the fumes to make a decision, the focus is short-term – it needs upbeat data to raise rates.

       While the employment situation is upbeat, other indicators are soft, such as the Chicago, dropping sharply in September below the threshold 50 level.

The ADP Employment report came at 8:15 a.m. Wednesday and was solid with  with 200,000 new hires in September..  The Employment Situation report will come at 8:30 a.m. Friday.

       Q3 earnings will start to hit the Street in coming weeks along with adjustments in future estimates/guidance. I can’t see how they will make good reading, but stocks in general are down going into the report period, which helps (if you are long).  

  TODAY:     

        It may merely be a rally in a pronounced downtrend, but there is a chance the Aug. 24 – the present is an important turn upward. By all means, sit close to the exit, because it will only take a sharp plunge after a “rally failure” to reverse the up trend.

       The bulls need to see persistent buying-in-size from institutions to come off the sidelines.

       Rallies in a sharp downtrend or bear market tend to come and go quickly as buyers hit a wall then get trampled buy anxious sellers happy to have a chance to bail at higher prices, if only pennies.

        The market action since the Aug. flash crash has a chance of being the end to the carnage with double bottoms in the DJIA, S&P 500 and Nasdaq, but Not the Russell 2000 which slid below the Aug. 24 lows.

         We are approaching the beginning of the best time for owning stocks (Nov. – May),* but this is OCTOBER and all bets are off.

          For months I have favored a September/October bottom.  Maybe August beat me to it, maybe not.

          If the bulls are loaded for bear, they will waste no time buying on dips, at the market and at higher prices. A lot of stocks have been slaughtered and may be candidates for investors looking back wishing they had done some buying.

         That, combined with the need  for institutions  to put clients’ cash to work should be good reason to shop for bargains.

         If this is a major juncture, the bulls should step in. If they don’t, the market will have to find a level that attracts them  – in size, which does count.
…………………………………………………………………………….

RESISTANCE “today”: DJIA: 16,401 ; S&P 500:1,937; Nasdaq Comp.:4,659.

SUPPORT today:  DJIA: 16,208; S&P 500: 1,907; Nasdaq Comp.:4,597

Note: most of the DJIA stocks are up in pre-market, except AAPL which  is taking 10 points off the DJIA.     

 …………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

     >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 28, 2015,  a reasonable risk is 15,586 a more extreme risk is 15,079. Near-term upside potential is 16,575.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but “at risk” of  a bear market.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  but will likely drop to a lower level.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

*Stock Trader’s Almanac ( New edition should be out)

…………………………………………………………

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Who Wants It Most … Bulls….or Bears ?

Investor’s first read Daily edge before the open

DJIA:  16,049
S&P 500: 1,884
Nasdaq  Comp.: 4,517
Russell 2000:  1,083

Wednesday:  Sept. 30,  2015   8:36 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////

      The ADP Employment report came at 8:15 a.m. today with Sept. payrolls up 200,000.  The Employment Situation report will come at 8:30 a.m. Friday, since “employment” has a bearing on a Fed decision to raise interest rates. 

      Monday’s  crunch wiped out any chance that the 17-day consolidation phase following the Aug. 24 flash crash could serve as a base for a rebound.     

       Bearish sentiment  has intensified  with so many global hotspots, none the least of which is plunging commodity prices.    What is happening there is beginning to look like the kind of “extreme” that will mark a turning point, ergo a  reversal ideally  after one big “flush.”  Commodities in general, especially copper have been crushed. Who in their right mind would buy them ?  hmmm.

       Q3 earnings will start to hit the Street in coming weeks along with adjustments in future estimates/guidance. I can’t see how they will make good reading, but stocks in general are down going into the report period, which helps (if you are long).    

 MY BAD:  Yesterday’s projection for the market averages was meant for the week, not Tuesday alone – damn.  We got a lot of  quarter-end churning yesterday, suggesting buyers had met sellers head-on,  but yesterday’s projection of DJIA: 16,494 ;  S&P 500: 1,952; Nasdaq Comp.:4,738 will  be a stretch for this week especially without a larger gain yesterday. Even so, with a follow through tomorrow and Friday, it’s possible.

TODAY:

      This rally surprised the Street, but I felt sentiment was getting too bearish.  Part of  this buying is related to institutional quarter-end adjustments, but some has to be bargain hunting.

       Buying here must become feverish if this rally is to  hold. A rally failure would pave the way for another leg down. We’ll have to see who wants it most – Bulls….or Bears ?

       Fed Chief Yellen speaks at 2:00 p.m.. She alone can stifle a rally. Nothing against her personally, but  the Fed has lost credibility. We are better off without ANYONE from the Fed speaking.  BEWARE !

        RESISTANCE “today”: DJIA:16,263; S&P 500:1907;  Nasdaq Comp.: 4,574 .

      

 …………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

     >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 28, 2015,  a reasonable risk is 15,586 a more extreme risk is 15,079. Near-term upside potential is 16,575.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but “at risk” of  a bear market.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  but will likely drop to a lower level.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

No Room For a Rally Failure

Investor’s first read Daily edge before the open

DJIA:  16,001
S&P 500: 1,881
Nasdaq  Comp.4,543
Russell 2000:  1,092

Tuesday:  Sept. 29,  2015   9:13 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////

The two most anticipated economic reports this week  will be the ADP Employment report at 8:15 a.m. Wednesday and the Employment Situation report 8:30 a.m. Friday, since they will have a bearing on a Fed decision to raise interest rates. 

      Yesterday’s crunch wiped out any chance that the 17-day consolidation phase following the Aug. 24 flash crash could serve as a base for a rebound.

       The small company Russell 2000 actually plunged below the Aug. low, which the DJIA, S&P 500 and Nasdaq Comp. have yet to do.

       Bearish sentiment  is intensifying with so many global hotspots, none the least of which is plunging commodity prices.    That suggests an “extreme” that has to change, ergo a  reversal in oil prices, ideally  after one big “flush.”

TODAY:

      A lot of damage to stocks has already been done.  FactSet.com  notes that 21.6% of the S&P 500 are already down 20% (a bear market benchmark) and 9 out of 10 S&P 500 sectors are down for the year.

      Unfortunately, Q3 earnings will start to hit the Street next month along with adjustments in future estimates/guidance. I can’t see how they will make good reading.

       The S&P 500 must drop to 1707 (-11.6%) from current levels to comprise a bear market by “technical’ standards (-20%).  A 10% drop from here in the DJIA to 14,688 would take the average down 20% from its bull market high.

        With all the negativity, the bear case is a good one. Falling stock prices have passed the “Ouch” point, but not the “I can’t stand it anymore” (capitulation) point, which would take another harrowing plunge in prices.

         The market will open trading on the upside  today with an outside chance of reaching   DJIA: 16,494 ;  S&P 500: 1,952; Nasdaq Comp.:4,738.  A rally failure today would be very bearish.

…………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

     >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 28, 2015,  a reasonable risk is 15,586 a more extreme risk is 15,079. Near-term upside potential is 16,575.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but “at risk” of  a bear market.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  but will likely drop to a lower level.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

 

Bull – Bear Crossroads

Investor’s first read Daily edge before the open

DJIA:  16,314
S&P 500:  1931
Nasdaq  Comp.4,686;
Russell 2000:  1,124

Monday:  Sept. 28,  2015   9:13 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////

      Big week ahead for reports on the economy, starting today with  Pending Home Sales (10 a.m.) and the Dallas Fed Mfg. survey (10:30 a.m.).  The most watched report will be the ADP Employment report at 8:15 a.m. Wednesday and the Employment Situation report 8:30 a.m. Friday, since they will have a bearing on a Fed decision to raise interest rates. 

TODAY:

      Friday’s rally failure came after the S&P 500 and Nasdaq Comp hit targeted resistance, then gave it all back by the close. While the DJIA closed ahead 113 points, 68 of that gain was due to a 10 point gain in Nike (NKE).

      While the market reversed a six-day sell off last Thursday, it closed on a soft note Friday.

       IMPORTANT:  This  17-day consolidation phase following the Aug. 24 flash crash can serve as a base for a rebound in stock prices   That suggests a chance of a surge into 2016.  That possibility cannot be dismissed even in face of a lot of bearish news and deflationary activity in commodities, especially copper.

      A lot of damage has already been done.  FactSet.com  notes that 21.6% of the S&P 500 are already down 20% (a bear market benchmark) and 9 out of 10 S&P 500 sectors are down for the year.

      It is not easy to be bullish at this time, but these are the conditions that spawn a surprise rebound.

        Most likely that rebound would arise from a scary spike down and a high volume, one-day reversal where a 300 – 400 point plunge in the DJIA is reversed with the market closing in the black.

         HOWEVER, we cannot afford to ignore cracks in the fundamental foundation  and a greenstick fracture in the market averages. It wouldn’t take more than a nudge to trigger a breakdown in prices to new 2015 lows.

        Q3 earnings will start to hit the Street next month along with adjustments in future estimates/guidance. I can’t see how they will make good reading.

CONCLUSION:

       Odds favor a rebound, but odds also suggest a strong  possibility of a harrowing shakeout first below DJIA 15,000 (S&P 500: 1,780). The extent of that shakeout will depend on what new news hits the market when it is trying to rebound.

………………………………………………………………………………….

SUPPORT today:  DJIA:16,130  S&P 500: 1,909; Nasdaq Comp.:4,634

…………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

      

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

THE FED – Why they blew it !

      The Fed’s decision not to initiate a rate increase at its September FOMC meeting now gives the Street the impression that when it does the economy is really heating up and additional rate increases are not far behind.  That will jolt the Street into heading for the exits.

      The Fed  wanted to ease the economy and markets into the rate increase process, but overstayed its zero-rate policy.

     There always will be reasons for caution, there will never be a “best” time.  If the economy cannot handle a minor increase in rates, we have bigger problems than anyone realizes.

      I do not believe that is the case, but the Street may see it differently when the Fed acts.

      Until now, I expected a rate increase to be accompanied by a brief but sharp sell off, followed by a BIG rally.  Odds of that are fading.

      The Street has  shuffled along behind the Fed on its decisions starting with “taper, or no taper” now with “Will it, or won’t it” on interest rates.

      The Street needs new benchmarks.  Going into a Presidential Election Year, the likelihood of an increase in interest rates lessens. The sooner the Street begins to focus on other factors, such as earnings ( a year out)  and valuations, the better everyone will be served itself included.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 25, 2015,  a reasonable risk is 16,168 a more extreme risk is 15,980. Near-term upside potential is 16,622.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but in a correction  into the fall.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  and is approaching an area of resistance.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

…………………………………………………………………………………

*Stock Trader’s Almanac

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

Easy Does It – Fed Action Still Unclear

Investor’s first readDaily edge before the open

DJIA:  16,201
S&P 500:  1,932
Nasdaq  Comp.;4,734
Russell 2000:   1,177

Friday:  Sept. 25,  2015   9:13 a.m.

/////////////////////////////////////////////////////////////////////////////////////////////////////////

      The market rebounded yesterday in anticipation of Fed Chief Janet Yellen’s speech after the close.  This is the Yellen rally I said yesterday was “risky.”

      Today, it will “gap” up at the open as a result of  Yellen’s comment that the Fed was on track to raise interest rates this year.

       One reason given in a Bloomberg News article today for this morning’s buying is that, “Investors now have clarity after a muddled message from the Fed last week”  in its post-FOMC press conference.

       Beg pardon, but aren’t things even more muddled now ?  One week after the FOMC meeting the Fed Chair is locking the Fed into a “will raise rates” position by year-end.

       And if they don’t, what happens to a disintegrating Fed credibility then ?

       Early on in this recovery, I was a Fed supporter, but in recent years I think its message has become too inconsistent to deserve  credibility.

       The Fed is micro-managing the direction of the financial markets. One problem with that is you do not have a true read on the level stocks would normally sell at without the Fed’s intervention.

       Maybe a normal level for stock prices would be 10% – 15% lower.     

TODAY

       In spite of all this, the technical pattern of stock prices positive in that we had an air clearing flash crash in August and several tests of those lows forming a base that can support a sustained rebound.

       We are approaching the Best Six Months “ of the year for owning stocks * (Q4, Q1) and a lot of blue chips have been crushed.

        I am wary of jumping in today, especially with a “gap” open when  the odds of catching the high for the day are above average.

       I am wary of buying in response to Yellen’s  comments yesterday, its timing  and the possibility they will widen the Fed’s credibility gap further.

        A rally failure today would seriously damage to the technical picture.

RESISTANCE today: DJIA: 16,386 ; S&P 500:1,953; Nasdaq Comp.: 4,786

SUPPORT today:  The market averages should hold above yesterday’s close. A rally failure would take the market down to DJIA: 16,103; S&P 500: 1,920; Nasdaq Comp.: 4,705.

…………………………………………………………………………………..

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.     

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

THE FED – Why they blew it !

      The Fed’s decision not to initiate a rate increase at its September FOMC meeting now gives the Street the impression that when it does the economy is really heating up and additional rate increases are not far behind.  That will jolt the Street into heading for the exits.

      The Fed  wanted to ease the economy and markets into the rate increase process, but overstayed its zero-rate policy.

     There always will be reasons for caution, there will never be a “best” time.  If the economy cannot handle a minor increase in rates, we have bigger problems than anyone realizes.

      I do not believe that is the case, but the Street may see it differently when the Fed acts.

      Until now, I expected a rate increase to be accompanied by a brief but sharp sell off, followed by a BIG rally.  Odds of that are fading.

      The Street has  shuffled along behind the Fed on its decisions starting with “taper, or no taper” now with “Will it, or won’t it” on interest rates.

      The Street needs new benchmarks.  Going into a Presidential Election Year, the likelihood of an increase in interest rates lessens. The sooner the Street begins to focus on other factors, such as earnings ( a year out)  and valuations, the better everyone will be served itself included.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 18, 2015,  a reasonable risk is 16,288; a more extreme risk is 15,814. Near-term upside potential is 16,548.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but in a correction  into the fall.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  and is approaching an area of resistance.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

…………………………………………………………………………………

*Stock Trader’s Almanac

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

 

Yellen Rally Risky

Investor’s first readDaily edge before the open

DJIA:  16,279
S&P 500:  1,938
Nasdaq  Comp.;4,752
Russell 2000:   1,140

Thursday:  Sept. 24,  2015   9:13 a.m.

///////////////////////////////////////////////////////////////////////////////////////////////////////////

 SUMMARY:

PREPARE for OPPORTUNITY

Prepare yourself mentally for a buying opportunity.  Bear in mind, when they come, most investors are too frightened to act.  At such junctures, the market always looks like it will go lower. Know which stocks you will feel comfortable with owning.  It gets confusing at bottoms, since so many stocks are down hard at these junctures.  The greatest obstacle is the human factor – fear at bottoms, greed at tops, big reasons why “buying  low – selling  high” isn’t just that easy. One consideration is to take partial positions then average those as you feel more comfortable with your timing.

OIL:

     With an unrelenting barrage of bad news on the oil sector, these stocks have got to be approaching the “wrung out” phase.  We have seen a few optimistic but contrary forecasts about being oversold and about higher oil prices going forward, but on each occasion, sellers enter to hammer these stocks down further.. At some point, everyone just bails and that marks the turning point.

      Without a grand announcement about $75 oil (whatever), these stocks should have one more spike down.  Watch them closely.

TODAY

I have been targeting a September/October Buy for months. While, my “Trader’s Buy” Aug 24, prior to the “flash crash” was timely,  I have stuck to my belief the turn would come this month or next.

What could turn the market up ? 

      Fed Chief Janet Yellen will deliver a speech after the close today. Her intent will be to stabilize global markets which have been in turmoil since last Thursday’s Fed announcement  not to raise rates. Once again, the Fed is tampering with the normal flow of stock pricesvery, very  dangerous policy.

      Corporate earnings will begin to flow next month. While 2016 was originally forecast as solid, recent thinking clouds that picture, potential negative.

      Lower prices  would do it.  Under uncertain/horrid conditions, markets must find a comfort level.   

       We are in the process of “testing the August 24 flash crash intraday lows (DJIA:15,370; S&P 500;1,867; Nasdaq Comp.:4,292).

       Nimble traders can buy 10 minutes after the open, but sit very close to exits.

        Resistance today: DJIA: 16,418 ; S&P 500:1,954 ; Nasdaq Comp.:4,792 all assuming the market optimistically front-runs Yellen’s speech after the close.

        Support today: DJIA: 16,144; S&P 500: 1,925; Nasdaq Comp.:4,711.

NOTE:  There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

THE FED – Why they blew it !

      The Fed’s decision not to initiate a rate increase at its September FOMC meeting now gives the Street the impression that when it does the economy is really heating up and additional rate increases are not far behind.  That will jolt the Street into heading for the exits.

      The Fed  wanted to ease the economy and markets into the rate increase process, but overstayed its zero-rate policy.

     There always will be reasons for caution, there will never be a “best” time.  If the economy cannot handle a minor increase in rates, we have bigger problems than anyone realizes.

      I do not believe that is the case, but the Street may see it differently when the Fed acts.

      Until now, I expected a rate increase to be accompanied by a brief but sharp sell off, followed by a BIG rally.  Odds of that are fading.

      The Street has  shuffled along behind the Fed on its decisions starting with “taper, or no taper” now with “Will it, or won’t it” on interest rates.

      The Street needs new benchmarks.  Going into a Presidential Election Year, the likelihood of an increase in interest rates lessens. The sooner the Street begins to focus on other factors, such as earnings ( a year out)  and valuations, the better everyone will be served itself included.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 18, 2015,  a reasonable risk is 16,288; a more extreme risk is 15,814. Near-term upside potential is 16,548.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but in a correction  into the fall.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  and is approaching an area of resistance.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.

Note: Source of economic data

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

…………………………………………………………………………………

*Stock Trader’s Almanac

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

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

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

 

 

 

 

 

 

 

 

 

 

Buying Opportunity Looms, but………..

Investor’s first read Daily edge before the open

DJIA:  16,330
S&P 500:  1,942
Nasdaq  Comp.;4,756
Russell 2000:   1,143

Wednesday:  Sept. 23,  2015   9:03 a.m.

///////////////////////////////////////////////////////////////////////////////////////////////////////////

 SUMMARY:

       Expect the Fed to trot out one of its governors to smooth over the impact of its decision not to raise interest rates last week, and its adverse impact on global markets.   That would trigger a rally of sorts.

      While the Street has heralded a Fed decision to defer rate increases in the past, it  is finding this “will it or won’t it” folly every month disconcerting. It seems  the Street is constantly looking over its shoulder for good news or bad news before making a decision.  Comments by Fed officials are better left to the press conference.

       There is no FOMC meeting scheduled for November, and no press conference scheduled for October. If a press conference is suddenly scheduled for October, it will be a tip off to an announcement of a rate increase, likewise  for a meeting/press conference is scheduled for November.

       Anybody give a hoot about corporate earnings ?

       I didn’t think so.

TODAY:

       We are in the process of “testing the August 24 flash crash intraday lows (DJIA:15,370; S&P 500;1,867; Nasdaq Comp.:4,292).

        Let’s not forget the fact this is a “pre-presidential election year,” historically the best of the four-year cycle.*  Then too, with the DJIA down 11% from its May high, the “Worst Six Months” seasonality is in full stride due to end November 1, though the slump could end any time. Sooooo, that suggests the “Best Six Months”* seasonality (Nov.1 to May1) has a chance of a repeat.*

        What’s my point ?

        Look for a buying opportunity.  With some negatives and uncertainties threatening to have a further impact, that opportunity may come at lower levels.

        It would be easier to read if we got a real crunch that weeds of all the nervous sellers.  A soft landing from these levels is possible, but it will have to be confirmed by unmistakable heavy volume  buying. I don’t see signs of that before the open.

        Resistance today: 16,468; S&P 500: 1,959; Nasdaq Comp.: 4,796

        Support today: 16,249; S&P 500: 1,932; Nasdaq Comp.: 4,732.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>    

THE FED – Why they blew it !

      The Fed’s decision not to initiate a rate increase at its September FOMC meeting now gives the Street the impression that when it does the economy is really heating up and additional rate increases are not far behind.  That will jolt the Street into heading for the exits.

      The Fed  wanted to ease the economy and markets into the rate increase process, but overstayed its zero-rate policy.

     There always will be reasons for caution, there will never be a “best” time.  If the economy cannot handle a minor increase in rates, we have bigger problems than anyone realizes.

      I do not believe that is the case, but the Street may see it differently when the Fed acts.

      Until now, I expected a rate increase to be accompanied by a brief but sharp sell off, followed by a BIG rally.  Odds of that are fading.

      The Street has  shuffled along behind the Fed on its decisions starting with “taper, or no taper” now with “Will it, or won’t it” on interest rates.

      The Street needs new benchmarks.  Going into a Presidential Election Year, the likelihood of an increase in interest rates lessens. The sooner the Street begins to focus on other factors, such as earnings ( a year out)  and valuations, the better everyone will be served itself included.

    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 18, 2015,  a reasonable risk is 16,288; a more extreme risk is 15,814. Near-term upside potential is 16,548.  Note: A drop below DJIA 15,713  would be very bearish.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

………………………………………………………………………………

  • STATUS OF MARKET: Bullish but in a correction  into the fall.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  and is approaching an area of resistance.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
  •  

Note: Source of economic data

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

…………………………………………………………………………………

*Stock Trader’s Almanac

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

 

 

 

 

 

 

 

 

The Spike !

Investor’s first read Daily edge before the open

DJIA:  16,510
S&P 500:  1,966
Nasdaq  Comp.;4,828
Russell 2000:   1,161

Tuesday:  Sept. 22,  2015   9:13 a.m.

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  TODAY:

     Quad Witching Friday and the day after are behind us and our stock market and those abroad are being tested.  What happens in coming days may decide if  the decline that started August 18 kicks off  a bear market, or just an ugly correction.

     Generally, a 20% decline in the stock market comprises a bear market. August’s flash crash (Aug. 18 – Aug. 24) dropped the DJIA 16.2%, the S&P 500: 12.5% and Nasdaq Comp. 17.9% (intraday).

      The difference between an ugly correction and a bear market is what news hits it when it is trying to turn back up.  Since the Aug. 24 low, the markets have been trying to sustain a rebound. That hit a wall last Thursday when the Fed announced it WAS NOT going to increase rates. That’s ironic, since the Street has always greeted a decision not to raise rates with buying.

       The morning before the Fed’s announcement, I urged readers to “raise cash” if the Fed opted out of an increase (SEE below). After a sharp rally that afternoon, the market sold off  with the help of Quad Witching Friday’s future’s/options expire.

      Yesterday, I headlined, “ Spike Down If Rally Fails.”

      Today we are getting a spike down in face of  tumbling commodities prices abroad and fears that China’s economy is tanking.

      The price chart of the Stoxx Europe 600 is a green stick fracture on the verge of a full fracture.

      This is not a pretty picture, since it won’t take much more downside in U.S. markets to  trace out the same dire picture.

       I am still holding to my forecast for a September/October bottom, in spite of my Aug. 24, “Trader’s Buy” before the open,  the day the flash crash ended. 

       I am open to the possibility that was the bottom, that another bottom can be made above those extreme levels.

SUPPORT today: DJIA: 16,118; S&P 500:1,938; Nasdaq Comp.:4,761

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THE FED – Why they blew it !

      The Fed’s decision not to initiate a rate increase at its September FOMC meeting now gives the Street the impression that when it does the economy is really heating up and additional rate increases are not far behind.  That will jolt the Street into heading for the exits.

      The Fed  wanted to ease the economy and markets into the rate increase process, but overstayed its zero-rate policy.

     There always will be reasons for caution, there will never be a “best” time.  If the economy cannot handle a minor increase in rates, we have bigger problems than anyone realizes.

      I do not believe that is the case, but the Street may see it differently when the Fed acts.

      Until now, I expected a rate increase to be accompanied by a brief but sharp sell off, followed by a BIG rally.  Odds of that are fading.

      The Street has  shuffled along behind the Fed on its decisions starting with “taper, or no taper” now with “Will it, or won’t it” on interest rates.

      The Street needs new benchmarks.  Going into a Presidential Election Year, the likelihood of an increase in interest rates lessens. The sooner the Street begins to focus on other factors, such as earnings ( a year out)  and valuations, the better everyone will be served itself included.

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NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.

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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies

 On occasion, I technically analyze each of the 30 DJIA stocks  for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the DJIA “divisor” (0.149677) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
     As of  September 18, 2015,  a reasonable risk is 16,288; a more extreme risk is 15,814. Near-term upside potential is 16,548.  Note: A drop below DJIA 15,713  would be very bearish.
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NEWS ENVIRONMENT    

        The following news has been  a contributor to recent market weakness, though most of these issues have been with us for weeks/months. 

-Chinese stock markets worst drop since 2007,  currently rebounding

-European stocks on verge of bear market (Germany’s DAX off 20%)

-U.S. stocks recovering from ugly crunch

-Commodities at 16-year low, but oil stabilizing.

-currency meltdown

      NOTE: Some of the Street’s pundits are arguing that this market behavior is unreasonable since the U.S. economy is doing well, if not great. Bear in mind, the stock market has historically been an early warning signal for the beginning of a recession, leading by as little as two months and as much as  13 months.

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  • STATUS OF MARKET: Bullish but in a correction  into the fall.
  • OPPORTUNITY: Volatility has set in, market has rebounded from August’s “flash crash”  and is approaching an area of resistance.
  • RISK: Above average with news sensitive market.
  • CASH RESERVE: 25%
  • KEY FACTORS:  Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; technical underpinnings weakening
  • CONCLUSION:  Having broken major support levels, the market is probing for a level that discounts uncertainties and negatives.
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Note: Source of economic data

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

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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