Opportunity Unfolding ?

Investor’s first read Daily edge before the open

DJIA: 17,596
S&P 500: 2,057
Nasdaq  Comp.: 4,958
Russell 2000: 1,246

Tuesday, June 30, 2015   9:03 a.m.

SUMMARY

     The sell off at yesterday’s open  was not enough to discount angst about the potential fallout from a Greek default today if it fails to make its 1.6 billion-euro  debt payment owed to the IMF. The market continued to sell off throughout the day.

     Pre-open futures trading indicates the possibility of a bounce at the open today, but a follow through is suspect without positive news Greece is not going to default.  Greece’s voters will vote on a referendum Sunday whether or not to accept more austerity in exchange for financial aid.

      I think the European Commission, European Central Bank and IMF have been prepared for this for years and are ready to implement damage control to head off a European meltdown.  Greece accounts for 2% of the euro-zone output.

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TODAY     

      The DJIA and S&P 500 are testing March lows of 17,579 and 2,034 respectively. Breaking those lows would trigger more selling in a market already under pressure and could take the DJIA down to the 17,000 area (S&P 500: 2,000).

      The more upbeat Nasdaq Comp. and Russell 2000 have a long way to go before testing  the March lows, but should find support around 4,790 and 1,204 respectively.

      More downside beyond the Greek crisis ?

      Small-to-moderate corrections (3%-5%) become uglier (8%-12%) if the market gets hit by new negatives at the time it is ready for a rebound after a small correction. In most cases, this is not foreseeable in advance – it just happens.

      Expect statements designed to stabilize the stock market. Without concrete news resistance should start at:

Resistance today starts at DJIA: 17,737; S&P 500: 2,075; Nasdaq Comp.: 4,997.

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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 we will get the  S&P Case-Shiller Home Prices (9:00), Chicago PMI (9:45), Consumer Confidence (10:00). Wednesday brings the ADP Employment Report(8:15), 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: 

-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.

-Greece

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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