Traders can clip some profits today (Wednesday ) and especially on a move above DJIA 10,465,

Brooksie’s Daily Stock Market blog
-an edge before the market opens

Wednesday, July 14, 2010 Posted: Tuesday 4:30 pm

Note: I will be traveling and out of touch for incorporating overnight news into this blog.

DJIA: 10,385.57
S&P500:1097.29
Nasdaq Comp.: 2244.42
Russell 2000: 641.13

This surge is partly due to the Street’s anticipation of good Q2 earnings, partly a matter of value investing for money managers looking out to the future, and partly short covering . My guess is it has rattled the cage of some computer programs and could trigger some panicky buying.

New buyers should place orders carefully, not paying-up for stocks that have already had a good run.

It was just days ago the Street ( and negative press ) were obsessed with a double dip recession. Maybe someone forgot to program that fear into the computers.

Nevertheless, Thursday is a big “news” day, which may shed light on that matter. So far, the market action suggests a double dip is a stretch !!!!

The intensity of the four sharp sell offs since April may have shaken out enough sellers to enable the market to bottom out and persist in a sideways trading range until fall with the lower end around DJIA 9,800 ( S&P 500: 1030 ).

If the Street abruptly rules out double dip, we will see a test of April’s highs.
Stocks are cheap looking out year, or so, if all the economy is going to do is slow down a”little.”

Contact: sensible sleuth@gmail.com

George Brooks

Yes, a huge bull market in small company stocks will happen, be patient, but be ready for it.

No one expects it, That's always been a good reason something will happen.

My Friday post still stands. Expect the market to continue to encounter headwinds in the DJIA (S&P 500: 1075 ) area.

Support is 9,880 - 9,900 (S&P500:1040 - 1045).

While resistance is stiff here, the market could still break out and run with the DJIA initially pushing up to the 10,280 area (S&P 500:1095 ).

Thursday is a heavy news day with the Producer Price Index, Empire State Manufacturing, and Jobless Claims coming at 8:30 am, Industrial Production at 9:15, and the Philly Fed. Survey coming at 10 am.

This market has been news sensitive in recent weeks with concerns about a double dip recession. Thursday could hold sway over whether the market moves several hundred Dow points in one direction or another.

Perhaps now that LeBron James has made his decision, the country can refocus.

Brooksie’s Daily Stock Market blog
-an edge before the market opensMonday, July 12, 2010 9:24 am EDT

DJIA:10,198.03
S&P 500: 1077.91
Nasdaq Comp.: 2196.45
Russell 2000: 629.43

Investment contrarians are drooling over two surveys that show investment sentiment among money managers as bearish as it was in late February 2009, right before the 2007 - 2009 bear market was ending and the current bull market was beginning.

Low readings in surveys by the National Association of Active Investment Managers NAAIM ) and the National Association of Individual Investors ( NAII ) preceded strong surges in the market in late June and late October 2009, and early February this year.

Hold on a sec !

These are money managers. How come they are bearish before an up move, and bullish before a down move ?

The short answer is, by the time the survey is taken, they have done their selling, ergo the downward pressure on the market has already taken place. The opposite is true of bullish readings.

Then too, the speed with which they can change their mind is measured in milliseconds, so ink on these kind of stats may not be dry before they mean little.

Monday’s Wall Street Journal headlined, “Small Investors Flee Stocks, Changing Market Dynamics,” noting how the volatility created by heavy computerized trading has pumped up risks of investing to intolerable levels.

Don’t investors have enough “risks” to deal with, without computer games ?

Stupid question, because the quants own Wall Street, it’s a private party. Investors wanting to play will just have to learn to read their moves and head fakes like they had to do over the years, starting with the individual investor themselves - remember the odd lotter ?

These guys play with the big cap stocks, which suggests the revival of a new game in town - small cap stocks ! They can’t play on this field without showing their hand before they buy a meaningful position.

So, a call to all you guys and girls who are leaving stocks to get slaughtered in bonds when interest rates eventually run up - come back to the market, get ready for a monstrous bull market in small company stocks, and snicker if it makes you happy while these nerds take turns destroying each others’ portfolios.

NOTE: I am not sure how long this web site will run. I am considering options to relocate my blog. Initially, it offered instant visibility with ease of posting.

I will be relocating it, either to a web site I set up, or an opportune location. I am still looking at options. So you do not lose contact, please send me your e-mail and I will notify you of the change when it comes, and in the interim, continue to post to EQUITIES as long as it is running, and e-mail my posts to you if it stops.

I am in Seattle and will return on Wednesday. This post will be made Monday evening, not shortly before the open Tuesday morning, as I do from Raleigh, NC, where I moved from Connecticut 6 years ago.

Send to: sensible sleuth@gmail.com.

George Brooks