Bulls Must Make Their Move, or…..

Investor’s first readDaily edge before the open

DJIA: 18,011
S&P 500: 2,109
Nasdaq  Comp.: 5,076
Russell 2000: 1,253

Wednesday, June 3, 2015   9:11 a.m.

TODAY:

     Looks like the Bulls are digging in their cleats for another run at new highs.  Pre-market futures trading indicates a positive open from what looks like a “coiled spring” pullback in the market over the last 7 days.

     This looks like the bull’s big day, but they must step in and run the table. Failure to run stocks up hands control over to the Bears.

Today’s resistance starts at DJIA: 18,091; S&P 500: 2,117; Nasdaq Comp.: 5,100.

If this is the bull’s charge, these resistance levels will yield quickly.

     With a solid open, support at DJIA: 17,946; S&P 500: 2,101; Nasdaq Comp.: 5,054  should not be tested.

     This is a key test for Bulls and Bears, like a tug of war that just begins to signal a barely perceptible shift in strength by one side which then leads to a rout.

ECONOMIC REPORTS

     This is a  big week for reports on the economy. Monday, Personal Income/Outlays; PMI Mfg.; ISM mfg.; and Construction Spend were reported as non-events.  PMI is still adversely impacted by the strong U.S. dollar.

     Factory Orders came yesterday and were off 0.4 pct. in Apr., the 8th decline in 9 months. The ADP Employment in May was on target, April’s International trade gap improved, with PMI Services, ISM Non-Mfg. scheduled for release later today; Jobless Claims come Thursday and  the Employment Situation report and Consumer Credit Friday.

     With a pickup in U.S. housing, it would be nice if other sectors of the economy would pick up. That can happen if the economy rebounds from Q1’s slump.   

GREECE

The consequences of Greece exiting the Eurozone are so dire, a compromise is likely. Not only would it be devastating to Greece’s economy, but its impact on global banking and financial circles would be dramatic. Don’t be surprised if this is a white knuckle one before resolution (this weekend ?)

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ALERTALERTALERT

     The six months period between Nov. 1 and May 1 has historically been the best six months for the stock market.* The six months between May 1 and Nov. 1 has underperformed. Consistent as this seasonal pattern has been, it must be noted that opportunities to trade against these trends have occurred often.  Analysts and the press will make a lot of noise about this phenom in coming months –  be careful.
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My Technical Analysis of the 30 DJIA Companies:  

On occasion, I technically analyze each of the 30 DJIA stocks  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” (0.1498588) to get the DJIA for those levels.
     As of  May 29, a reasonable risk is 17,917; a more extreme risk is 17,660 The upside potential is has dropped with the market’s inability to follow through last week and is now 18,260.

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KEY EXTERNAL FACTORS: 

-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. This week is mixed.

Note: Source of economic data

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

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*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

 

 

 

 

 

 

 

 

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