Setback for Bulls, But……………..

Investor's  first readDaily edge before the open

DJIA: 18,037
S&P 500: 2,108
Nasdaq  Comp.5,060:
Russell 2000:    1,252
Monday, April 27, 2015   8:35 a.m.

CONCLUSION:
     Looks like the market is still  locked in a three month trading range, roughly (DJIA 17,600 – 18,200; S&P 500: 2,040 – 2,115; Nasdaq Comp.: 4,845 – 5,050).  While the Russell 2000 had been in an uptrend throughout this period, it too is hitting headwinds.   

     The S&P 500 and Nasdaq Comp. broke out briefly last week and again yesterday only to get hit by sellers.  This is typical market action when stocks are locked in a consolidation pattern.

     Earnings and Fed interest rate angst are the culprits, as well as maneuvering by highly leveraged institutions.
   Expectations for soft Q1 earnings have been a drag for weeks, but that may be changing, as projections are not panning out as negative as originally thought..
   If the Street starts to see an earnings  rebound in the second half of the year with a possible bounce in oil prices and slide in the U.S. dollar not penalizing big-name stocks, we will get a sizable breakout and a run in small company stocks.
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TODAY: Down at the open. Should try to find support at DJIA: 17,982; S&P 500: 2,103; Nasdaq Comp.: 5,027. Failing that, the next support is DJIA: 17,887; S&P500: 2,093; Nasdaq Comp.: 5,017
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     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)

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KEY EXTERNAL FACTORS:
Greece is again at risk of default.
-Yemen chaos may be cooling.
-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.

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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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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