Market at Mercy of Q1 Earnings Reports

Investor’s first read Daily edge before the open

DJIA: 18,057
S&P 500: 2,102
Nasdaq  Comp.:4,995
Russell 2000:    1,264
Monday, April 13, 2015   9:07 a.m.

CONCLUSION:

   The uncertainty that accompanies quarterly earnings reports will dominate the stock market in coming weeks. Report periods can be hazardous, since stocks can be punished even with a report that “beats” projections.

    How so ?  Because this is isn’t always about fundamentals, as it is about big money maneuvering and lots of  stock manipulation and tape painting.  I see a lot of attractive chart patterns marred by unexpected gaps down, where it appears a plug is pulled for no good reason.  This is referred to “shaking the tree” to rid the stock of potential sellers (overhead supply), which enables it to be run up more easily in the future.

   Today’s support is DJIA 18,031 (S&P 500: 2,100; Nasdaq Comp.: 4,992).

   The Bulls have a shot at March highs of DJIA 18,205; S&P 500: 2,114; Nasdaq Comp.: 5,042; Russell 2000: 1,268, but selling can be expected to increase as the market enters levels that  stopped the market in March.

   Bear in mind the DJIA, S&P 500, Nasdaq Comp.  are locked in a three month trading range  (DJIA 17,600 – 18,200; S&P 500: 2,040 – 2,115; Nasdaq Comp.: 4,845 – 5,040). The smaller company index (Russell 2000) is more upbeat, suggesting the Street is seeking greater risk. 

KEY FACTORS: 

-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.

COMMENTS:

     The Street is so addicted to a Fed decision on interest rates, other analytic yardsticks appear to have little significance.       Bad news is welcome, since it suggests a delay in a rise in interest rates from zero to zero-plus-a-smidge.  Bad is good ?  What kind of silliness is that ?

     Even so, once a rate hike is announced, odds favor a brief plunge followed by a strong rally.

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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Note: I discontinued my daily – before – open publishing of Investor’s first read on November 5, 2014, after 6 years (1,600 posts).  Future publishing will be on a less frequent basis and not always before the market opens. In the interim, I will publish as I see necessary as I craft a new format.

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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 decisions in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

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