Easy Does It Before the Long Weekend

Investor’s first read Daily edge before the open

DJIA: 17,619
S&P 500: 2,063
Nasdaq  Comp.: 4,986
Russell 2000: 1,253

Tuesday, Jul 1, 2015   9:02 a.m.

SUMMARY

    The market’s near-term direction is pretty much dependent on the outcome of the Greek/IMF standoff, and a resolution may not come before a few more fake outs.    

     Ultimately, the direction of the market will once again be based on the rebound in the U.S. economy and timing of a Fed increase in interest rates the first in seven years.

TODAY

      Based on pre-open stock index future trading, the market will open on the upside.  There is a risk to paying up for stocks at the open, since a rally failure is possible with the Greek “situation” and potential domino effect still uncertain. The Europeans have had years to prepare for what is happening, so I think a more widespread crisis can be avoided.

      Today’s ADP employment report (237,000 new hires) beat projections, so focus may soon turn back to the economy, especially if the Employment Situation report at 8:30 tomorrow.

      With a three-day weekend coming up, traders may opt to bail early tomorrow and deal with the Greeks Monday.

       Look for a spike up at the open, then a test of support at DJIA: 17,620; S&P 500: 2,062, Nasdaq Comp: 4,981. Failure to hold there calls for more downside.

Resistance today starts at DJIA: 17,778; S&P 500: 2,081; Nasdaq Comp.: 5,034.

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THE FED

      The guessing game continues – Will the Fed bump interest rates up in September, or later ?

      Obviously, their decision will key on the strength of the U.S. economy where housing is taking the lead and now consumer expectations are soaring.

      Today brought the ADP Employment Report with 237,000 new hires, to be followed by the PMI Mfg. (9:45), ISM Mfg. (10:00), Construction Spend (10:00). Thursday we get Jobless Claims and the Employment Situation reports (8:30), and Factory Orders 10:00).

      Manufacturing has lagged. Any pickup and “interest rate bump” hits headlines.

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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” (0.1498588) to get the DJIA for those levels.
     As of  June 26 a reasonable risk is 17,837; a more extreme risk is 17,650 The upside potential is has dropped with the market’s inability to follow through last week and is now 18,270.  

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KEY EXTERNAL FACTORS: 

-Greece
-Stock market bubble – China
Q2 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.
Recent strength in employment and housing industry shifting concern from a weakening in the U.S. economy to enough strength to prompt an early bump up in interest rates.

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

 

 

 

 

 

 

 

 

 

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