Traders: Lock In Some Gains

Investor’s first read – Daily edge before the open
DJIA:16,943
S&P 500: 1,993
Nasdaq Comp.: 4,707.:
Russell 2000: 1,076
Friday: March 4, 2016 9:06 a.m.
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The February Jobs Report was a solid increase of 242,000, unemployment rate 4.9% (participation 62.9%).
Good stuff but unlikely to force Fed this late in the game to bump rates following its FOMC meeting next week. However, in her press conference at 2:30 next Wednesday, Fed Chief Janet Yellen may indicate a bump at its April meeting and may suggest several more in line for 2016.
While the market has moved in lockstep with oil prices in recent months, it may start to key more and more on the Fed after these jobs numbers.
While conventional technical analysis would lean toward a bump and grind market pressing up into late April, before a major correction, this is an unusually unconventional market, a correction may start sooner.
Presently, I see major overhead supply starting around DJIA 17,176; S&P 500: 2,021; Nasdaq Comp.: 4,796. That’s where the market started to break down in January.
What would trigger a drop before then ?
Downward revisions in Q3 and Q4 earnings, for one. Fed action to increase rates this month (15th), and or, an increasing likelihood the Fed will follow up wit two more bumps this year. Finally, an inventory glut driven plunge in oil prices.
The market has had a 10% run since its double bottom February 11. Traders will be locking in some profits since the market is nearing major resistance. New buying must be selective.
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SUPPORT “today”: DJIA:16,826; S&P 500:1,981; Nasdaq Comp. :4,681
RESISTANCE : “today”: DJIA:17,021; S&P 500:2,003; Nasdaq Comp.:4,733.
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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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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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