Market Seeks Comfort Level on Rate Increase

Investor’s first read

DJIA:  17,995                                   

S&P 500: 2,079

Nasdaq  Comp.: 4,942

Russell 2000:    1,176

Tuesday March 10, 2015

The markets are  adjusting for something the Street has feared  for years – a rise in interest rates. Add to that, a slowdown in corporate earnings growth and a 6-year old bull market which has stretched valuations, and you have the potential for a nasty correction.

But, we have been here before –  a correction that is short-lived only to be followed by a surge in prices.

Bull markets can live with higher interest rates, but the idea of a change rattles the cage. A cash reserve is always smart under these conditions, clearly 15% – 20% is reasonable. It cushions against a further decline, and gives an investor an opportunity to take advantage of lower prices.

The risk here is for a drop to DJIA 17,615. Breaking that 17,454 comes into play. S&P 500 risk is 2,050. Breaking that 2,020 comes into play. The DJIA 18,165 (S&P 500: 2,106) level must be broken on the upside to reverse the current negative pattern.

On Thursday March 19, Apple (AAPL) will replace AT&T (T) as one of the 30 DJIAs. I expect this move to increase the volatility of the blue chip average.

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Yesterday marked the  SIXTH Anniversary of  the March 9, 2009,  bear market bottom and my Special Bulletin “BUY”  on March 10, with the DJIA at 6,805. Through its March 2, 2015 all-time high, the bull has logged in a 184% gain.

February 24, 2009  (DJIA:   7,114“Does the Cauldron of Fear Have to Boil Before This Market Turns ?”

Conclusion:  Countdown to bear bottom begins – 

February 25, 2009  ( DJIA: 7,350 “When the Fear of Owning Stocks Turns to Fear of NOT Owning Stocks” …before the Big money runs the table, you should be working your way back into the market, either via a managed fund, Exchange Traded Fund (ETF), or by taking partial positions in stocks you want to own.

February 27, 2009 ( DJIA: 7,182 ) “Lock and Load”  a surge of 2,000 points in the DJIA ? 

March 2, 2012  (DJIA:  7,062)   “$9 trillion Cash on the Sidelines vs $8 Trillion NYSE Market Value”

Conclusion: An unbelievable stat –  amazing – unprecedented buying power

March 2, 2009  ( DJIA: 6,832 “Ready …Aim.  ”SPECIAL BULLETIN”

Conclusion:  Get ready for a buying opportunity

March 3, 2009  ( DJIA:   6,818 ) “Big Money Reaching for the Bushel Basket”

ConclusionThe smart money was out there catching  stock at bargain prices

March 4, 2009 (DJIA:  6,726) “Once off the Sidelines, Big Money Good for a 1,500 – 2,000-point Rally” –a buying opportunity of a lifetime.

Conclusion: DJIA rose 2,000 points within 3 months

March 5, 2009 (Thursday – DJIA:   6,875 )   “Climactic Buy Possible by Tuesday”

Conclusion: DJIA hit its bear market bottom the following Monday.

March 9, 2009          ( DJIA:   6,626 “Be Ready for a Big Buying Opportunity”

We are getting ever so close to a bear market bottom. Be ready,

March 10, 2009  ( DJIA: 6,805)  “FIRE !”   (BUY !) 

Conclusion: The Bear Market bottom. I issued a Special Bulletin after the DJIA hit its intraday low of 6,440.

George Brooks

Investor’s first read

A Game-On Analysis, LLC publication

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Note: I discontinued publishing Investor’s first read on a "daily – before the open" basis on November 5, 2014, intending to begin publishing again on a less frequent basis and not always before the market opens. In the interim, I will publish occasionally as I see necessary.

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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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