Early January Action – KEY !

Investor’s first read – Daily edge before the open
DJIA: 17,603
S&P 500: 2,063
Nasdaq Comp:5,065
Russell 2000: 1,149
Thursday: Dec. 31, 2015 9:04 a.m.
WISHING YOU A GREAT NEW YEAR
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I am expecting 2016 to be a rough year for stocks with some wide swings in the market averages – a field day for market timers. The market was “range bound” in 2015 with numerous swings up and down, but aside from the August plunge and September/October rebound, the swings were tight and hard to exploit.
The market’s trend in January has an excellent track record for signaling the “general tone” of the market for the year. It’s called the January Barometer (JB) developed by Yale Hirsch (Stock Trader’s Almanac) in 1972. Essentially, the trend of the S&P 500 in January is followed by a like change for the year, though a lot of contrary things can happen between January 31 and December 31.
The logic behind the JB is that institutions tend to tip their hand as soon as the new year kicks off, buying if strongly bullish, selling if bearish.
This will be the BIG test for the JB, since a lot of balls are up in the air going into the year, any one of which can come down and do damage.
I am not sure what the Street is thinking, if anything conclusive. Throughout the year they were indecisive, mostly in lock step with the Fed’s indecisiveness on interest rates.
It is a relief that the Fed has acted, With that uncertainty out of the way, we will now see what the Street really thinks.
BEAR MARKET ?: So far, just one or two nasty corrections. It all depends on new negatives hitting the market when it is down and ready for a rebound.
Note: 2016 IS THE YEAR FOR BUYING OILS. A selling climax, a one-day affair with a big plunge and a close on the upside is the ideal scenario. Big money may not wait for that. The Saudi’s are playing a dangerous game. Too many big hitters getting hurt. Pressure from within out the outside will force them to trigger a price rebound, just like they triggered a plunge.
TODAY:
Yesterday’s sell off was triggered by another plunge in the price of oil, which is down again today. The market is still plodding through the year end muddle of institutional portfolio adjustments (showcasing winners – dumping losers).
Early trading in January will help clear the picture a lot.
The Bulls couldn’t prevail yesterday – not good. Oil stocks are getting pounded in pre-market trading which doesn’t help. Bulls must do better than this, perhaps a rebound this afternoon.
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SUPPORT “today”: DJIA:17,521; S&P 500:2,055; Nasdaq Comp:5,043.
RESISTANCE “today”: DJIA:17,666; S&P 500:2,068 ; Nasdaq Comp.:5,086.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Not yet)
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 29, 2015, a reasonable risk is 117,209 a more extreme risk is 16,920. Near-term upside potential is 18,056.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Concern for the number and extent of additional bumps in interest rates by the Fed; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official. While Fed has assured the Street additional bumps will be modest, doubts by some will have an impact.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Important Day for the Bulls

Investor’s first read – Daily edge before the open
DJIA: 17,720
S&P 500: 2,078
Nasdaq Comp:5,107
Russell 2000: 1,160
Wednesday: Dec. 30, 2015 9:04 a.m.
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Yes, the year end rally lives, and the market did post big numbers yesterday.
I expected that based on the one-day reversal Monday and strong pre-market buying Tuesday, one of the more readable combinations.
For weeks, I have expected a year end rally to carry into January when the market would get hit by sellers, during the first week of trading.
This buying is part of year end portfolio adjustments, which usually yields to the buyers as Dec. 31 nears.
The bigger question will be, what will the BIG money do in 2016 ?
I think it will be a rough year. I have expected the selling to start early in the month, which is when it should start if the year is a downer.
But, before pulling the trigger, I will wait for the early returns in January when institutions tip their hand on how they see the year as a whole. This phenom is referred to as the January Barometer. I don’t like clichés, but generally speaking, as January goes so goes the year. Statistically, the January to December 31, track record is very good for good and bad years following a January signal. Just be aware that a lot can happen (and does) during the year.
A new year is a new ball game for the institutions. New monies flow in and they have buy lists earmarked for the new year, positions they did not want to broadcast in year end reports.
The first week in January gives an early warning for the month’s trend.
Corporate earnings are projected to increase 6% -8% in 2016, which gives the bulls something to be optimistic about in a year fraught with uncertainty politically and economically. But the Street expected the same increase for earnings in 2015.
If earnings track upward in Q1, it will definitely help the bullish case. If they fall short, look out.
This will be the BIG test for the JB, since a lot of balls are up in the air going into the year, any one of which can come down and do damage.
TODAY:
My technical analysis of each of the 30 Dow stocks indicates a near-term potential for this rally to top 18,000 (see below). That includes several days into January.
This is still year end portfolio adjustment muddle, but a rally from a down open would indicate the year end rally has further to go, that the institutional buying is the dominant factor for now.
NOTE: This is the year for a turn around in oil stocks (see below). Too many big names getting hurt. Pressure to mount on Saudi Arabia, even hostility within and without.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,656: S&P 500:2,068 ; Nasdaq Comp:5,087 .
RESISTANCE “today”: DJIA:17,807; S&P 500: 2,088; Nasdaq Comp.:5,131.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Not yet)
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 29, 2015, a reasonable risk is 117,209 a more extreme risk is 16,920. Near-term upside potential is 18,056.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Concern for the number and extent of additional bumps in interest rates by the Fed; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official. While Fed has assured the Street additional bumps will be modest, doubts by some will have an impact.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Year End Rally – Spill Over Into Early January

Investor’s first read – Daily edge before the open
DJIA: 17,528
S&P 500: 2,056
Nasdaq Comp:5,040
Russell 2000: 1,148
Tuesday: Dec. 29, 2015 9:04 a.m.
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The market is well ahead of its 2002 – 2007 bull market high – DJIA: 23.3%; S&P 500: 30.9%; Nasdaq Comp.:76.3%; Russell 2000: 35.5%.
Since the 2009 bear market bottom, it has risen DJIA: 172%; S&P 500: 209%; Nasdaq Comp.: 299%; Russell 2000: 237%.
The Bull’s best hope for higher prices is corporate earnings. An increase of 6% to 8% would turn 2016 into a stable, perhaps banner year. Even the expectation of higher earnings would avert a wipeout, or until it became evident earnings were going to disappoint. Earlier this year, the Street was projecting earnings growth of 8%, but it looks like the year will end up with little growth at all.
Again, this year, the Street is expecting a 7% – 8% increase in corporate earnings. That could be bolstered by a rebound in earnings of oil companies after a disastrous year in 2015.
We should know by mid-January whether the Street is a believer. I’ll stick to my forecast of a January correction and give it a second look as we enter the second week. January has a consistent record for forecasting the overall tone of the market for the year as a whole. It’s called the January Barometer, and its track record is impressive.*
Institutions tend to tip their hand as on-balance buyers or sellers early in the new year. Next year is loaded with question marks, including a presidential election.
TODAY:
The year end rally lives. After an early sell off, the market closed at the highs for the day, a strong indication the market would open on the upside the next day.
Pre-market trading in the stock-index futures today confirms that with a good probability the strength will spill over into January, as expected.
Obviously, a rally failure under these conditions would be a bad sign. It shouldn’t happen today. Market should post big numbers today.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RESISTANCE “today”: DJIA:17723; S&P 500: 2,073; Nasdaq Comp.:5,093.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Not yet)
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 24, 2015, a reasonable risk is 16,950 a more extreme risk is 16,722. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Concern for the number and extent of additional bumps in interest rates by the Fed; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official. While Fed has assured the Street additional bumps will be modest, doubts by some will have an impact.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Institutions Positioning for 2016 – a Muddle

Investor’s first read – Daily edge before the open
DJIA:17,552
S&P 500: 2,030
Nasdaq Comp:5,048
Russell 2000: 1,154
Monday: Dec. 28, 2015 9:04 a.m.
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The traditional year-end rally started four days ago from DJIA 17,116 (S&P 500: 2,005). The market rebounded from a two day sell off after the Fed announced its long awaited bump in interest rates. It may already be over.
However, a sharp rebound from today’s sell off means it is still alive !!
The market is currently distorted by year-end institutional portfolio window dressing, much of which couldn’t be done until money managers got the official decision from the Fed, Wednesday Dec. 16. The buying and selling may spill over into January.
Institutions will be buying some of 2015’s losers in 2016, stocks it did not want to show as holdings in year-end reports. They will be selling some of 2016’s winners they did want to show in year end reports, but didn’t want to hold.
Odds are good that Q1 will be a downer, that investors should have a sizable cash reserve, either by taking profits in early 2016 or deferring purchase seeking to buy-in at lower prices. Preservation of capital is an important part of strategic investing. It goes hand-in-hand with one’s tolerance for risk.
The market is well ahead of its 2002 – 2007 bull market high – DJIA: 23.3%; S&P 500: 30.9%; Nasdaq Comp.:76.3%; Russell 2000: 35.5%.
Since the 2009 bear market bottom, it has risen DJIA: 172%; S&P 500: 209%; Nasdaq Comp.: 299%; Russell 2000: 237%.
The Bull’s best hope for higher prices is corporate earnings. An increase of 6% to 8% would turn 2016 into a stable, perhaps banner year. Even the expectation of higher earnings would avert a wipeout, or until it became evident earnings were going to disappoint. Earlier this year, the Street was projecting earnings growth of 8%, but it looks like the year will end up with little growth at all.
We should know by mid-January which way this goes. I’ll stick to my forecast of a January correction and give it a second look as we enter the second week. January has a consistent record for forecasting the overall tone of the market for the year as a whole.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,461; S&P 500:2,049; Nasdaq Comp.:5,022
RESISTANCE “today”: DJIA:17,641 ; S&P 500:2,070; Nasdaq Comp.:5,073.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Not yet)
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 24, 2015, a reasonable risk is 16,950 a more extreme risk is 16,722. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Concern for the number and extent of additional bumps in interest rates by the Fed; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official. While Fed has assured the Street additional bumps will be modest, doubts by some will have an impact.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Market Probing Resistance – Careful

Investor’s first read – Daily edge before the open
DJIA:17,602
S&P 500: 2,064
Nasdaq Comp:5,045
Russell 2000: 1,152
Thursday: Dec. 24, 2015 9:02 a.m.
WISHING ALL OF YOU A MERRY CHRISTMAS AND HAPPY HOLIDAY
Trading in the stock market will end at 1:00p.m. today
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The year end rally continues, as institutions re-invest the proceeds from year-end sales, as well as new monies.
I haven’t seen many bullish forecasts for 2016, which is bullish in and of itself.
Mutual fund redemptions are running high, another positive.
I continue to warn of a down January and several broader swings in the market throughout the year vs. 2015’s two dozen saw tooth swings up and down of varying magnitudes.
Oil is rebounding without a selling climax as BIG money begins to nibble at lower prices.
Is this the bottom for oil ?
Odds favor it is either a rally in a bear oil market, or a rally that will be followed by a test of the recent lows. (see below)
TODAY
The long holiday weekend starts at 1:00 p.m. for those who have business to conduct, which suggests a low-volume day, but some nice upside. There are still five trading days left in 2015.
This is the fourth day of the year end rally and the market averages are starting to press into a resistance level , beginning at my resistance levels noted below. The market can move beyond these levels, but buyers begin hitting more selling.
New buys, except in highly depressed issues become more risky as the market moves deeper into resistance. At some point soon, the market will hit a wall.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,546; S&P 500:2,057; Nasdaq Comp.:5,032
RESISTANCE “today”: DJIA: 17,698; S&P 500:2,073; Nasdaq Comp.:5,073
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Easy Does It – Year End Rally to Hit Resistance

Investor’s first read – Daily edge before the open
DJIA:17,417
S&P 500: 2,038
Nasdaq Comp:5,001
Russell 2000: 1,137
Wednesday: Dec. 23, 2015 9:02 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
The sharp sell off following the Fed announcement of its bump in interest rates it didn’t look like I would get the year-end rally I have been expecting since Dec. 15. This week’s rebound changed that.
My reasoning was that there was a lot of selling and buying that couldn’t be executed until the Fed decision on rates was official. The selling came first, now the buying.
I have been warning of a top in the first week of January followed by a sharp sell off. I still see that, though it may come before January.
I have also alerted readers to the potential for a selling climax in oil stocks, but noted long-term investors may step in to take advantage of depressed prices and begin buying. That may have happened yesterday as the group rebounded. I agree with the long-term attractiveness of this group, but still see the potential for lower prices (See below).
We had a host of reports on the economy yesterday, but mostly ho-hummers.
Existing Home Sales dropped 10.5% in Nov., but that was attributed to the “Know Before You Owe” initiative which lengthened closing times.
TODAY:
Beware – new purchases as the market moves up have above average risk.
Current buying is coming from institutional re-investment of the proceeds of sales, as well as from investment of new monies that come in at year-end.
I do not see this lasting for long.
I don’t like new year forecasts, except to warn of the potential for sharp swings in both directions, starting with a plunge in January. Obviously, the magnitude of the January plunge would be lessened if the market tanks in coming weeks.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,346; S&P 500:2,029; Nasdaq Comp.:4,984
A break below these levels would be bearish.
RESISTANCE “today”:DJIA:17,546; S&P 500:2,052; Nasdaq Comp.:5.038
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way, sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Rally to Set Up January Top ?

Investor’s first read – Daily edge before the open
DJIA:17,251
S&P 500: 2,021
Nasdaq Comp:4,968
Russell 2000: 1,127
Tuesday: Dec. 22, 2015 9:15 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
Institutions have seven days left to adjust portfolios for year-end reports. Many had to wait for the Fed decision on interest rates to be “official” before acting, thus a scramble in the closing days of 2015.
Institutions want to dress up year-end reports to eliminate losers and project hope for the new year listing holdings that promise exciting gains in coming months.
My problem with that is that last year’s losers could be this year’s winners.
The market stabilized yesterday after heavy selling for three days, even closed on the upside, raising odds of a year end rally.
I don’t see a rush to buy in pre-market trading, suggesting caution regarding the prospects for 2016.
While the market bounced smartly in the last hour of trading yesterday, the bulls must step in today to prevent another sell off. It is still possible the year end rally occurred early last week and the correction I expected in the first week in January started last Thursday.
Should we get a follow through on the upside in coming days, I see January as a high-risk month.

Oil STOCKS (See below).
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,167; S&P 500:2,012; Nasdaq Comp.:4,946
A break below these levels would be bearish.
RESISTANCE “today”:DJIA:17,373; S&P 500:2,036; Nasdaq Comp.:4,997
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Wild Two Weeks Ahead

Investor’s first read – Daily edge before the open
DJIA:17,128
S&P 500: 2,005
Nasdaq Comp:4,923
Russell 2000: 1,121
Monday: Dec. 21, 2015 8:28 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
The market didn’t sell off after the Fed announcement last Wednesday as I expected, but it did sell off Thursday and Friday, big-time.
I have been expecting two things to happen in coming weeks. I expected a year end rally of sorts as institutions structure portfolios for 2016, but I also expected a sharp correction starting in the first week of January.
It is possible the January correction has already started, however, with stock index futures trading up big prior to the open today, it is possible the year end rally is starting now.
The selling and buying last week and continuing into this week has been magnified by the fact institutions had to wait for the Fed decision on interest rates to be “official” before they could place orders. Then too, last week’s activity was also impacted by Quadruple Witching Friday when index futures, index options, stock options and stock futures all expire on the same day.
Selling will continue as institutions scramble to adjust portfolios for 2016 after the Fed decision Wednesday. But there will be buying as well as institutions reinvest the proceeds from their recent sales and invest new monies that come in at year-end.
An exciting two weeks ahead !!
This is a big week for reports on the economy (see mam.econoday.com) for details.
Oil STOCKS (See below).
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:16,956; S&P 500:1,985; Nasdaq Comp.:4,875
These supports are low only assuming the remote possibility of a rally failure
RESISTANCE “today”:DJIA:17,347; S&P 500:2,033; Nasdaq Comp.:4,985
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL
I am not an expert on oil or commodities, not even close, but basic industries in a free fall will eventually become attractive either by way of a change (or perception thereof) in the fundamentals or extreme undervaluation as a result of emotional /panic selling.
The severe plunge in Brent and West Texas Intermediate crude oil prices over the last 18 months has crushed oil stocks and the stocks of related industries.
The potential exists for a selling climax in these stocks as negative press and industry forecasts gain momentum forcing investors to simply dump these stock, funds and ETFs indiscriminately, hammering prices down to a point they attract enough bargain hunters to stabilize prices.
There can be false rallies along the way sucking traders in prematurely, creating losses within hours, days. These are usually triggered by rumors or commentary by industry sources, mainly OPEC..
Timing buys can be treacherous even for the pros.
Whether oil stocks will get hit this hard depends on whether institutions with a long-term horizon believe they are a bargain and step in.
There is an opportunity shaping up for those who can afford the risk.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Selling Climax in Energy Stocks Coming

Investor’s first read – Daily edge before the open
DJIA:17,495
S&P 500: 2,041
Nasdaq Comp:5,002
Russell 2000: 1,135
Friday: Dec. 18, 2015 8:56 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
Now that the Fed decision on interest rates is official, institutions have stocks to sell and stocks to buy based on that decision something they couldn’t do before the announcement.
Without an immediate concern for what the Fed will do next, the Street will have to focus on the areas of the economy that are weak and those that are strong to gain a feel for what to expect next year. Housing is strong, manufacturing is weak. I am not sure any forecasts of corporate earnings can be trusted, so we must assume valuations are a bit high until earnings gain traction after a flat year.
Ugliness and negativism will dominate 2016 as candidates for the presidency joust for control. Terrorism concerns will add to an uncertain investment environment.
All this suggests there will be opportunities, though timing will be critical.
TODAY
The market didn’t sell off after the Fed announcement Wednesday as I expected, but it did Thursday.
While the Street was relieved that the “will they, or won’t they” circus is behind us, they obviously had stocks to sell.
This market action is typical of December, as institutions realign portfolios.
I have been expecting a year-end rally of sorts, one that would carry into January where I expect a major correction. Should the market “front-run such a correction by plunging in December, January won’t be as big a loser.
Today is Quadruple Witching Friday when index futures, index options, stock options and stock futures expire on the same day. The event has the potential to disrupt trading.
THIS IS CLASSIC YEAR-END STUFF. Some of this selling and buying would not be taking place if the Fed had postponed its decision. Expect choppiness, but I do think odds are good for buyers to gain the upper hand before December 31 and into the first week of January.
This year has been brutal for money managers. The S&P 500 is down 2.1% for the year, 674 hedge funds have been forced to close for lack of performance.
While I see a high risk for a January correction, I think the swings in prices will be fewer the result being better opportunities for investors with patience and timely buys and sells.
WATCH ENERGY STOCKS FOR A MONSTER SELLING CLIMAX.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,371; S&P 500:2,026; Nasdaq Comp.:4,957
RESISTANCE “today”:DJIA:17,567; S&P 500:2,053; Nasdaq Comp.:5,026
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Doubt we have seen lows – depends a lot on the US dollar)
The energy sector is down 20% year-to-date, forecasts are for lower prices and no rebound. I can see a selling climax in this sector at lower levels, but the ingredients are there. The sector will bottom out well before any news of stabilization. Beware of false rallies, one-day affairs that look like the turn, but yield to another leg down.
Right now some traders may be tempted to catch the falling knife. There will come a point when no one in hell would even think of buying anything to do with oil, that’s when they are a buy.
Hey, it’s coming !
We are seeing a lot of bad press on oil – $30, low $20s. The big names are probing levels not seen in 5 years, and before that 2005. An institution with a 5 – 10 – 15 year horizon has no reason not to be buying, so they will be in there ahead of the ultimate low.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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

Rate Bump to Trigger Year-End Action

Investor’s first read – Daily edge before the open
DJIA:17,749
S&P 500: 2,073
Nasdaq Comp:5,071
Russell 2000: 1,148
Thursday: Dec. 17, 2015 8:56 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
If institutions used the relief rally yesterday following the Fed’s long awaited bump in interest rates to sell, it didn’t have any impact on prices.
I think institutions have stocks to sell and stocks to buy based on the Fed’s decision yesterday to raise its federal funds rate. Now that the bump is official, they can go ahead.
The sell off late yesterday didn’t develop as I expected, it may today.
Buying should ultimately override the selling in coming days, leading to a year-end rally of sorts in face of a lot of forecasts for 2016, most positive.
I don’t believe in annual forecasts. Too many things happen within a 12-month span, but I am worried about January.
Odds are good for the market to top out during the first week in January 2016, kicking off a correction of 8% – 14%.
I don’t know now whether a decline of that magnitude will turn into a bear market. Unfolding events will determine that.
A declining market before year-end would blunt the negative impact of a January decline with stabilization sometime in late January and February.
This bull market hasn’t lacked for negatives, and 2016 won’t be spared. Subsequent bumps in the federal funds rate can be expected to take the rate up to anywhere from 0.85 percent to 1.375 percent, depending on who you ask.
The timing of the next bump will dampen enthusiasm. While both the economy and stock market have demonstrated they can do well with higher rates than these, it is the angst of another increase that worries the Street.
Election year ugliness can hardly be good for sentiments with the orchestration of the fear factor leading the charge.
While corporate earnings are expected to jump smartly next year, I am not sure why. They were expected to jump this year and didn’t, even ex-energy.
While bull markets have a rep of climbing a wall of worry, this bull market has already done a lot of climbing.
TODAY
I see the potential for a year-end rally that takes the DJIA above 18,000 (S&P 500: 2,100; Nasdaq Comp. 5,150) into the first week in January. Much can happen in the interim, but the markets are currently tracking that pattern.
It would be easy to get carried away by a surge in prices in coming weeks accompanied by a bunch of optimistic annual forecasts.
NOTE: Quadruple Witching Friday teams up with the complexities of December this week, as if there wasn’t enough to consider. Q-Witch occurs four times a year (Mar.,June, Sept. and Dec.) and is when index futures, index options, stock options and stock futures expire on the same day. The event has the potential to disrupt trading.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,596; S&P 500:2,056; Nasdaq Comp.:5,027
RESISTANCE “today”:DJIA:17,889; S&P 500:2,089; Nasdaq Comp.:5,117.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
NOTE: Support and resistance levels are where I expect the intraday prices of the DJIA, S&P 500 and Nasdaq Comp. to reverse or close. Buyers should be cautious when a resistance level is reached but consider buying when support levels are reached. Sellers should consider taking action when resistance levels are reached and defer selling when support levels are reached. These levels are picked daily and based on my application of technical analysis.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
OIL (Doubt we have seen lows – depends a lot on the US dollar)
The energy sector is down 20% year-to-date, forecasts are for lower prices and no rebound. I can see a selling climax in this sector at lower levels, but the ingredients are there. The sector will bottom out well before any news of stabilization. Beware of false rallies, one-day affairs that look like the turn, but yield to another leg down.
Right now some traders may be tempted to catch the falling knife. There will come a point when no one in hell would even think of buying anything to do with oil, that’s when they are a buy.
Hey, it’s coming !
We are seeing a lot of bad press on oil – $30, low $20s. The big names are probing levels not seen in 5 years, and before that 2005. An institution with a 5 – 10 – 15 year horizon has no reason not to be buying, so they will be in there ahead of the ultimate low.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR MARKETS
Pre-presidential election years have a record of being the best of the four-year election cycle with presidential election years running a close second. But the eighth year of a two-term presidency is the exception with the S&P 500 losing an average of 10.9% going back to 1901.*
This supports my expectation of a correction in January setting the precedent of a volatile year for stocks in 2016.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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” (0.149677) 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 December 11, 2015, a reasonable risk is 17,023 a more extreme risk is 16,643. Near-term upside potential is 17,611.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Bullish but “at risk” of a major correction in January.
 OPPORTUNITY: RISK: Risk increases with higher market, but light on the Street is GREEN in spite of negatives. January plunge possible.
 CASH RESERVE: 25% – 45% depends on tolerance for risk.
 KEY FACTORS: Fed decision on rates; strength of economic rebound; Outlook for Q3/Q4 earnings; Stimulus Europe/China a catalyst !!
 CONCLUSION: Fed bump in interest rates now official.
//////////////////////////////////////////////////////////////////////////////////////////////////////////
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
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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