No Room For a Rally Failure – None !

Investor’s first read – Daily edge before the open
DJIA:16,995
S&P 500:1,989
Nasdaq Comp.:4,662
Russell 2000: 1,063
Friday: March 11, 2016 9:11a.m.
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Oil prices may be reaching a peak near-term, as the International Energy Agency (IEA) just announced oil prices may have bottomed. Traders will likely use the news and accompanying spike in oil prices to sell. Dire forecasts of $20 oil were abundant in late January prior to a 42% rebound in WTI crude from $26.55 a barrel. Traders used that news and price weakness to buy.
TODAY:
Stock index futures are sizzling this morning in a delayed reaction to the ECB’s announcement yesterday of a reduction in borrowing costs and expansion in its QE to corporate bonds.
Is this good news, or bad ? What can be done if this action doesn’t work ?
Again, I get back to the tug of war between bulls and bears. Yesterday it was first the bulls, then the bears appeared to gain an edge.
While the bulls are off to a good start, they cannot fail to follow through today. If they succeed, I don’t expect another major correction until late April when the May – June negative seasonality sets it.
Part of today’s strength may be in anticipation that the Fed won’t bump interest rates next Wednesday. That euphoria may be premature, since Fed Chief Janet Yellen may announce the prospect for increases in rates at subsequent meetings.
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RESISTANCE : “today”: DJIA:17,196; S&P 500:2,012; Nasdaq Comp.:4,718
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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 new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages,
As of March 2, 2016, a reasonable risk is 16,716 a more extreme risk is 16,651. Near-term upside potential is 17,134
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 STATUS OF MARKET: Bearish – but trying to turn. Expect volatility
 OPPORTUNITY: RISK: Risk high, but opportunity for traders at lower levels.
 CASH RESERVE: 25% – 45%. Consider 75% now
 KEY FACTORS: Fear taking hold. Concern for the number and extent of additional bumps in interest rates by the Fed; strength of economic rebound; Outlook for Q1, and 2016 earnings as a whole.
The Street is counting on a big jump in Q3 and Q4.
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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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