Street To Parse Yellen’s Words Today

Investor’s first readDaily edge before the open

DJIA: 17,904
S&P 500: 2,096
Nasdaq  Comp.: 5,055
Russell 2000: 1.269

Wednesday, June 17, 2015   9:03 a.m.

TODAY:

     The FOMC will release its report on the economy at 2:00 p.m., Fed Chief Janet Yellen will hold a press conference at 2:30. While a major announcement is not expected, the Street will parse every word of her comments for a clue regarding timing of a bump in interest rates.      

     While Greece’s woes have been a drag, a settlement would remove lift a lid of uncertainty over the market.
  The Russell 2000 has been a powerhouse throughout, an indication the Street is reaching for more risk to achieve gains.

     While this bull market has racked up incredible gains in six years, I do not see the sloppy buying yet, rank speculation with people making overnight gains in low-priced stocks.  I don’t even hear people talking about the market yet.

      Overpriced by a number of yardsticks – YES ! 
      Nevertheless, It is very hard to stop a runaway train, and even more difficult to jump off one.

The intense volatility over the last four months with abrupt surges and plunges in the market involved a corrective process, but more so it represents the potential for  a “top” formation or “base” formation for a big move.

RESISTANCE today is:  DJIA: 18,027; S&P 500: 2,107; Nasdaq Comp.:  5,083

MINOR SUPPORT today is:  DJIA: 17,881; S&P 500:2,093; Nasdaq Comp.: 5,048
……………………………………………………………………………

SUMMARY

     The BIG “Q” here is whether the U.S. economy will rebound from its Q1 slump and how robust that bounce would be.

      The Street is in a quandary. A sharp rebound in the economy would hasten a Fed bump up in interest rates, which to-date the Street has considered to be bearish.  A further slump in the economy would keep interest rates at all-time lows, which so far the Street thinks is bullish.

      However, the economy can only slump so far before the Street changes heart and heads for the exits.

       Last week’s employment and retail numbers were upbeat.  This week May Industrial Production and June Empire State Manufacturing were below forecasts, though the Housing Market Index beat estimates reaching a nine month high. While May Housing Starts slipped, permits for future construction surged to an 8-year high.    

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

QUESTION:   Will people be able to think independently 20 years from now, or will they have to ask a hand-held computer for the answer ?  Then too, who posts the info they are accessing ? Final question:  If a tree falls in the forest, does a hand held computer hear it ?

    I am far from the smartest person in the country, city, on my block, or in my home, but don’t take over my ability to think things through.

    Think about it (if you haven’t already surrendered that option), where is this going ?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>..

TRADING RANGE

     The four month trading range intact since February is (DJIA: 17,600 to 18,300; S&P 500: 2,040 to 2,130; Nasdaq Comp.: 4,856 to 5,100).

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

ALERTALERTALERT, etc.

     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.

     The DJIA and S&P 500 are unchanged since April 30.
…………………………………………………………………………………

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 5, a reasonable risk is 17,763; a more extreme risk is 17,556 The upside potential is has dropped with the market’s inability to follow through last week and is now 18,160.

   

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

RECOMMENDATION:  InvesTech Research is the finest advisory I have tracked in more than 30 years.  Plain talk, but solidly based indicators, great historical data to back positions.  Monthly, 8 pages, $295/year, worth every penny. Ask for copy (406)862-7777

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

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.

……………………………………………………………………………………

*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 *