May to Hold Answer – Up or Down

Investor’s first readDaily edge before the open

DJIA: 18,035
S&P 500: 2,106
Nasdaq  Comp.5,023
Russell 2000:    1,246

Thursday, April 30, 2015   9:09 a.m.

CONCLUSION:

     The FOMC shed little light yesterday on the timing of an interest rate hike, though the ugly Q1 GDP report and soft employment numbers suggest a hike won’t come until later in the year.

     A break out of the  three month trading range, roughly (DJIA 17,600 – 18,200; S&P 500: 2,040 – 2,115; Nasdaq Comp.: 4,845 – 5,050) will depend on revised earnings and corporate guidance  projections going forward.

     While Q1 earnings have put a damper on stocks, the Street’s negativity may be overdone.  The quarter looks more like a drop of 0.2 percent, down from 3.1 percent a month ago.

     If the Street sees a robust rebound, expect an upside breakout.  Otherwise, it looks like the sideways trading range will continue, even trend down over the summer months.

ALERT:

     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.
…………………………………………………………………………………

TODAY:

Today’s support: DJIA: 17,971;  S&P 500: 2,098;  Nasdaq Comp.: 4,998

Today’s resistance: DJIA: 18,118;  S&P 500: 2,115; Nasdaq Comp.:5,054


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 April 17, a reasonable risk was 17,687; more extreme risk 17,500; and the upside potential: 18,157.   The DJIA peaked at 18,175 yesterday prior to a selloff that started in early trading.

     NEW: As of yesterday’s close (Apr. 27) my new calculations are:  Reasonable risk: 17,887; more extreme risk: 17,640; and near-term upside: 18,334 (a new high)

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

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.

……………………………………………………………………………………

*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

 

 

 

 

 

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.