Risk Level Rises

Investor’s first read – Daily edge before the open
DJIA: 17,830
S&P 500:2,075
Nasdaq Comp.:4,805
Russell 2000: 1,139
Friday: April 29, 2016 8:58 a.m.
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TODAY
Yesterday I warned, “What cannot be overlooked is the CBOE Volatility Index (VIX). Based on index options puts and calls, the VIX is referred to as the “investor fear gauge,” bullish after rising sharply, bearish when down big-time.
Hitting four year lows, the VIX is telling us the Street hasn’t a fear in the world – close to la-la land.”
I went on to note that the best opportunities in the stock market exist at extremes when things couldn’t get worse (BUY), or things couldn’t get better (SELL).
This is one of those indicators that is well worth respecting when it hits an extreme.
I revised my TECHNICAL ANALYSIS of the 30 Dow stocks last night lowering support and resistance levels for each stock before converting to DJIA (see below).
Before getting too bearish across the board, it is worth noting that with fixed income rates so low, the Street will keep buying “yield” stocks, which dominate the DJIA.
Earnings are a tiny bit better than expected, yet the market does not trade well.
Q1 GDP was weak, most likely hurt by the brutal sell off in stocks in January.
This is one of the most uncertain presidential election years in 40 years. That should be a drag on stocks.
There are cracks in the foundation warranting a healthy cash reserve.
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SUPPORT “today”: DJIA:17,903; S&P 500:2,085; Nasdaq Comp.:4,837.
RESISTANCE “today”: DJIA:17,716; S&P 500:2,061; Nasdaq Comp.:4,774.
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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 Apr. 28, 2016, a reasonable risk is 17,661 a more extreme risk is 17,374. Near-term upside potential is 18,039.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORRECTIONS IN SPRING LAST SIX YEARS
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Volatility Index Says “No Sweat” – Really ?

Investor’s first read – Daily edge before the open
DJIA: 18,041
S&P 500:2,095
Nasdaq Comp.:4,863
Russell 2000: 1,154
Thursday: April 28, 2016 8:49 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
As expected, the Fed did not bump rates yesterday. More importantly, it eliminated the words “global economic and financial developments continue to pose risks” from the text of its FOMC minutes, suggesting its decision process is no longer influenced by negatives abroad !!
While Jobs growth is strong and the housing market has improved, business fixed investment and net exports have been soft. The median projections by FOMC members is still for two rate increases in 2016 (down from four in December).
What did jolt the market was the decision by the Bank of Japan (BOJ) last night to pass on further stimulus, leaving interest rates and asset purchases unchanged.
It was hoped Japan, the world’s third largest economy would ramp up its stimulus, which would have global benefits. Stock markets around the world took a hit this morning as a result.
West Texas intermediate oil for June delivery closed at $45.33 a barrel, its highest close since November, in response to yesterday’s FOMC report indicating the Fed was less concerned about global economies.
TODAY
The Nasdaq Composite declined yesterday in face of weakness in tech stocks. The market will open lower today after the Bank of Japan’s announcement over night not to further stimulate its economy.
What cannot be overlooked is the CBOE Volatility Index (VIX). Based on index options puts and calls, the VIX is referred to as the “investor fear gauge,” bullish after rising sharply, bearish when down big-time.
Hitting four year lows, the VIX is telling us the Street hasn’t a fear in the world – close to la-la land.
The best opportunities in the stock market exist at extremes when things couldn’t get worse (BUY), or things couldn’t get better (SELL).
The market can go down because it is top heavy – the sudden show of sellers with few buyers to catch stocks, or a drop can be triggered by unexpected news. This market is ever so vulnerable to a piece of bad news. It is top heavy, but can get more top heavy with the DJIA reaching 18,304.
With the hope for a decent return on fixed income, high yield stocks are still attractive, though many selling above average P/Es.
Watch this one carefully, it is a snake in the grass.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,941; S&P 500:2,083; Nasdaq Comp.:4,836.
RESISTANCE “today”: DJIA:18,109; S&P 500:2,103; Nasdaq Comp.:4,884.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Apr. 22, 2016, a reasonable risk is 17,792 a more extreme risk is 17,634. Near-term upside potential is 18,340.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORRECTIONS IN SPRING LAST SIX YEARS
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Investor’s first read – Daily edge before the open
DJIA: 18,041
S&P 500:2,095
Nasdaq Comp.:4,863
Russell 2000: 1,154
Thursday: April 28, 2016 8:49 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
As expected, the Fed did not bump rates yesterday. More importantly, it eliminated the words “global economic and financial developments continue to pose risks” from the text of its FOMC minutes, suggesting its decision process is no longer influenced by negatives abroad !!
While Jobs growth is strong and the housing market has improved, business fixed investment and net exports have been soft. The median projections by FOMC members is still for two rate increases in 2016 (down from four in December).
What did jolt the market was the decision by the Bank of Japan (BOJ) last night to pass on further stimulus, leaving interest rates and asset purchases unchanged.
It was hoped Japan, the world’s third largest economy would ramp up its stimulus, which would have global benefits. Stock markets around the world took a hit this morning as a result.
West Texas intermediate oil for June delivery closed at $45.33 a barrel, its highest close since November, in response to yesterday’s FOMC report indicating the Fed was less concerned about global economies.
TODAY
The Nasdaq Composite declined yesterday in face of weakness in tech stocks. The market will open lower today after the Bank of Japan’s announcement over night not to further stimulate its economy.
What cannot be overlooked is the CBOE Volatility Index (VIX). Based on index options puts and calls, the VIX is referred to as the “investor fear gauge,” bullish after rising sharply, bearish when down big-time.
Hitting four year lows, the VIX is telling us the Street hasn’t a fear in the world – close to la-la land.
The best opportunities in the stock market exist at extremes when things couldn’t get worse (BUY), or things couldn’t get better (SELL).
The market can go down because it is top heavy – the sudden show of sellers with few buyers to catch stocks, or a drop can be triggered by unexpected news. This market is ever so vulnerable to a piece of bad news. It is top heavy, but can get more top heavy with the DJIA reaching 18,304.
With the hope for a decent return on fixed income, high yield stocks are still attractive, though many selling above average P/Es.
Watch this one carefully, it is a snake in the grass.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,941; S&P 500:2,083; Nasdaq Comp.:4,836.
RESISTANCE “today”: DJIA:18,109; S&P 500:2,103; Nasdaq Comp.:4,884.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Apr. 22, 2016, a reasonable risk is 17,792 a more extreme risk is 17,634. Near-term upside potential is 18,340.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORRECTIONS IN SPRING LAST SIX YEARS
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Apple Down at Open – A Warning Shot ?

Investor’s first read – Daily edge before the open
DJIA: 17,990
S&P 500:2,091
Nasdaq Comp.:4,888
Russell 2000: 1,150c
Wednesday: April 27, 2016 9:08 a.m.
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The minutes of the FOMC meeting will be released today at 2:00 p.m., but a press conference is not scheduled to follow, strongly indicating no change in the Fed’s benchmark interest rate.
That does not mean the minutes won’t contain warnings of an interest rate increase in coming months, which could jolt the market.
The news front is quiet, almost crisis free, so maybe the Fed will toss some tough talk in just to keep the Street on its heels.
So far, Q1 earnings are a smidge better than expected, another down quarter does not seem to disturb the Street which is looking for better Q4 results.
While DuPont (DD), Procter&Gamble (PG), Lockheed (LK), and 3M (MMM) beat expectations, Alphabet (GOOG), Apple (AAPL), and Microsoft (MSFT) didn’t.
Now that the nominees for both political parties seem a sure thing, the Street will be more focused on what to expect next year, which should prompt more and more uncertainty as we descend on November. That increases the odds of a correction starting in coming weeks (see below).
TODAY
The Street will focus on the FOMC report at 2:00 p.m., but at some point here the November elections will have more and more of an impact. We know what to expect from the Fed report today, we don’t from the results in November.
This just in: Apple (AAPL) is down sharply in pre-market trading, which could trigger a sell off in other tech stocks.
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SUPPORT “today”: DJIA:17,863; S&P 500:2,077; Nasdaq Comp.:4,851.
RESISTANCE “today”: DJIA:18,077; S&P 500:2,101; Nasdaq Comp.:4,917.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Apr. 22, 2016, a reasonable risk is 17,792 a more extreme risk is 17,634. Near-term upside potential is 18,340.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORRECTIONS IN SPRING LAST SIX YEARS
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Like Tireless Pink Rabbit

Investor’s first read – Daily edge before the open
DJIA: 17,977
S&P 500:2,087
Nasdaq Comp.:4,895
Russell 2000: 1,138
Tuesday: April 26, 2016 9:06 a.m.
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NOTE: I have nothing new to add today that adds more value than what I said yesterday, except under “TODAY.” Read it if you haven’t already. Re-read it if you have.
A good portion of the rally since January 20 was normal technical bounce after a historic decline. It has extended more than I expected, more than many in this business expected. Markets do that from time-to-time.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.

My March 31 “Technical Analysis of the 30 DJIA Companies” (DJIA: 17,685) called for an upside potential of 18,102. That was hit last Tuesday requiring me to update the computation (see below). The new upside is 18,340. Interesting ! The all-time high for the DJIA is 18,351.
That is possible since the U.S. dollar has been trending down, indicating a more favorable environment for exporters and companies with significant global business.
But something else is afoot here, which has been driving prices up. Starting with the rebound January 20 from the worst January plunge in 75 years, stocks paying attractive dividends became the darlings of the Street.
Throughout 2015, an index of dividend paying stocks tracked the same path as the S&P 500 and tech stocks, but suddenly diverged in January and have outperformed ever since.
The reason – the flip-flop in Fed policy in January from an expected four rate increases in 2016 to two, if that. The Street is assuming higher rates won’t be coming anytime soon and is seeking yield in dividend payers, they aren’t going to get it in fixed income with the 10-year treasury yielding 1.77 percent.
As a result, many yield stocks trade at premiums to historical norm. As long as they notch up, fine. It should be remembered that the price of a stock is automatically decreased by the amount of the dividend when the stock goes ex-dividend (when the company cuts a check, transferring money from its coffers to the shareholder.
Then too, if these stocks are now trading at a premium, what happens if the economy picks up and the Fed begins to bump rates up ? These stocks will correct back to normal valuations a drop in valuation that may erase much of the amount of dividends paid.
The FOMC meets today but no press conference is scheduled for Wednesday, so any action on rates is next to zero.
Dividend paying stocks power the DJIA, so my upside of DJIA 18,340 is possible if the Street keeps buying them. The all-time high for the DJIA is 18,351. Breaking that would give the BIG money a chance to unload stocks as the press headlines generate a lot of volume reporting the market hit a new all-time high.
TODAY
The market wants to press higher most likely since the Street expects the Fed to hold interest rates at current levels, though don’t be surprised if the FOMC minutes released Wednesday at 2:00 p.m. indicate a sharp divide internally on a rate increase.
Then too, as noted above, the Street is buying dividend stocks, seeking to lock in some sort of return, not available elsewhere.
Historically, market valuations a bit rich, but not if earnings are going to jump next year. That’s the sticking point. It’s too early to tell how corporate guidance and the Street’s projections will unfold in coming weeks.
Every day the market shakes off a decline and presses higher convinces investors (and institutions) there is no stopping this bull market. Riskless buying of stocks can’t be that simple. Hang on to some cash as a cushion. Get ready to lock in fat gains in coming weeks.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,942; S&P 500:2,085; Nasdaq Comp.:4,891.
A break below 17,912, 2,081, or 4,883 respectively raises a red flag short-term.
RESISTANCE “today”: DJIA:18,063; S&P 500:2,097; Nasdaq Comp.:4,917.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Apr. 22, 2016, a reasonable risk is 17,792 a more extreme risk is 17,634. Near-term upside potential is 18,340.
Seven stocks took sharp hits last week. These are “solid-sleeper” blue chip stocks !
Visa (V)
Travelers (TRV)
Coca Cola (KO)
IBM (IBM)
Microsoft (MSFT)
Procter Gamble (PG)
Verizon (VZ)
All had positive chart patterns before reversals, and should be considered a warning sign that even the big blues are vulnerable.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Dividend Stocks Driving the Market

Investor’s first read – Daily edge before the open
DJIA: 18,003
S&P 500: 2,091
Nasdaq Comp.4,906:
Russell 2000: 1,146
Monday: April 25, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
TODAY
My March 31 “Technical Analysis of the 30 DJIA Companies” (DJIA: 17,685) called for an upside potential of 18,102. That was hit last Tuesday requiring me to update the computation (see below). The new upside is 18,340. Interesting ! The all-time high for the DJIA is 18,351.
That is possible since the U.S. dollar has been trending down, indicating a more favorable environment for exporters and companies with significant global business.
But something else is afoot here, which has been driving prices up. Starting with the rebound January 20 from the worst January plunge in 75 years, stocks paying attractive dividends became the darlings of the Street.
Throughout 2015, an index of dividend paying stocks tracked the same path as the S&P 500 and tech stocks, but suddenly diverged in January and have outperformed ever since.
The reason – the flip-flop in Fed policy in January from an expected four rate increases in 2016 to two, if that. The Street is assuming higher rates won’t be coming anytime soon and is seeking yield in dividend payers, they aren’t going to get it in fixed income with the 10-year treasury yielding 1.77 percent.
As a result, many yield stocks trade at premiums to historical norm. As long as they notch up, fine. It should be remembered that the price of a stock is automatically decreased by the amount of the dividend when the stock goes ex-dividend (when the company cuts a check, transferring money from its coffers to the shareholder.
Then too, if these stocks are now trading at a premium, what happens if the economy picks up and the Fed begins to bump rates up ? These stocks will correct back to normal valuations a drop in valuation that may erase much of the amount of dividends paid.
The FOMC meets today but no press conference is scheduled for Wednesday, so any action on rates is next to zero.
Dividend paying stocks power the DJIA, so my upside of DJIA 18,340 is possible if the Street keeps buying them. The all-time high for the DJIA is 18,351. Breaking that would give the BIG money a chance to unload stocks as the press headlines generate a lot of volume reporting the market hit a new all-time high.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,749; S&P 500:2,085; Nasdaq Comp.:4,887.
RESISTANCE “today”: DJIA:18,083; S&P 500:2,101; Nasdaq Comp.:4,929.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 Apr. 22, 2016, a reasonable risk is 17,792 a more extreme risk is 17,634. Near-term upside potential is 18,340.
Seven stocks took sharp hits last week. These are “solid-sleeper” blue chip stocks !
Visa (V)
Travelers (TRV)
Coca Cola (KO)
IBM (IBM)
Microsoft (MSFT)
Procter Gamble (PG)
Verizon (VZ)
All had positive chart patterns before reversals, and should be considered a warning sign that even the big blues are vulnerable.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Bulls Must Step In Now or Else

Investor’s first read – Daily edge before the open
DJIA: 17,982
S&P 500: 2,091
Nasdaq Comp.:4,945
Russell 2000: 1,135c
Friday: April 22, 2016 9:12 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Some cracks in the 7-year bull market are beginning to appear, and should be respected. At some point, when least expected, when it appears to be safe to bet the ranch, a correction will begin. How deep depends on what news hits the market after a 5% to 12% pullback.
1-U.S. retail sales have been flat for a year and are now turning down.
2-March Vehicle sales turned in the worst performance in 6 and one-half years.
3-The IMF’s semiannual World Economic Outlook trimmed its 2016 growth forecast with downgrades for the U.S., UK, Japan, the Euro area , Brazil and Russia.
4-The failure of oil producers to agree Sunday on its freeze tosses the issue of oil prices into another quagmire.
5- The flow of Q1 earnings will be mostly negative, with little help expected in Q2.
6-The eighth year of a two term presidency tends to be a bummer. This on won’t be different.
7-The S&P 500 sells at 17.8 X trailing earnings. At 26.3 X , Shiller’s P/E is 58% above its historic norm, leaving little wiggle room for the Bulls.
TODAY
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
Short-term, the market needs a breather. Rally attempts will tell a lot. A failure to gain and maintain traction indicates a major correction is underway.
While the earnings picture has been ignored along with the economy and stock valuations, the Street may suddenly begin to factor these into their computer models. That would be the tipping point. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,906; S&P 500:2,081; Nasdaq Comp.:4,921.
RESISTANCE “today”: DJIA:18,076; S&P 500:2,102; Nasdaq Comp.:4,963.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 31, 2016, a reasonable risk is 17,664 a more extreme risk is 16,560. Near-term upside potential is 18,102
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Corrections Start April/May

Investor’s first read – Daily edge before the open
DJIA: 18,096
S&P 500: 2,102
Nasdaq Comp.:4,948
Russell 2000: 1,142
Thursday: April 21, 2016 8:49 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Some cracks in the 7-year bull market are beginning to appear, and should be respected. At some point, when least expected, when it appears to be safe to bet the ranch, a correction will begin. How deep depends on what news hits the market after a 5% to 12% pullback.
1-U.S. retail sales have been flat for a year and are now turning down.
2-March Vehicle sales turned in the worst performance in 6 and one-half years.
3-The IMF’s semiannual World Economic Outlook trimmed its 2016 growth forecast with downgrades for the U.S., UK, Japan, the Euro area , Brazil and Russia.
4-The failure of oil producers to agree Sunday on its freeze tosses the issue of oil prices into another quagmire.
5- The flow of Q1 earnings will be mostly negative, with little help expected in Q2.
6-The eighth year of a two term presidency tends to be a bummer. This on won’t be different.
7-The S&P 500 sells at 17.8 X trailing earnings. At 26.3 X , Shiller’s P/E is 58% above its historic norm, leaving little wiggle room for the Bulls.
TODAY
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Be careful. The nature of corrections has been to plunge rather than slide gradually, not giving investors much time to react to preserve capital.
On March 31, I set DJIA 18,102 as a near-term potential under “My Technical Analysis of the 30 DJIA” (see below). Yesterday, the DJIA hit that target. Time for an update.
As expected, Q1 earnings are tracking a dismal forecast, but the Street is unfazed, obviously looking ahead to better numbers in Q4.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
With the caustic nature and uncertainties of this election year and other negatives, and other negatives, odds favor a slide into Q4 of this year. If not an inducement to raise some cash in the event new negatives surface, this April/May pattern should encourage investors be extremely cautious, sit close to the exit and to be very selective on new commitments. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,906; S&P 500:2,083; Nasdaq Comp.:4,898.
RESISTANCE “today”: DJIA:18,156; S&P 500:2,109; Nasdaq Comp.:4,959.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 31, 2016, a reasonable risk is 17,664 a more extreme risk is 16,560. Near-term upside potential is 18,102
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

So Far Street Unfazed By Q1 Reports

Investor’s first read – Daily edge before the open
DJIA: 18,053
S&P 500: 2,100
Nasdaq Comp.:4,940
Russell 2000: 1,140
Wednesday: April 20, 2016 8:56 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Some cracks in the 7-year bull market are beginning to appear, and should be respected. At some point, when least expected, when it appears to be safe to bet the ranch, a correction will begin. How deep depends on what news hits the market after a 5% to 12% pullback.
1-U.S. retail sales have been flat for a year and are now turning down.
2-March Vehicle sales turned in the worst performance in 6 and one-half years.
3-The IMF’s semiannual World Economic Outlook trimmed its 2016 growth forecast with downgrades for the U.S., UK, Japan, the Euro area , Brazil and Russia.
4-The failure of oil producers to agree Sunday on its freeze tosses the issue of oil prices into another quagmire.
5- The flow of Q1 earnings will be mostly negative, with little help expected in Q2.
6-The eighth year of a two term presidency tends to be a bummer. This on won’t be different.
7-The S&P 500 sells at 17.8 X trailing earnings. At 26.3 X , Shiller’s P/E is 58% above its historic norm, leaving little wiggle room for the Bulls.
TODAY
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Be careful. The nature of corrections has been to plunge rather than slide gradually, not giving investors much time to react to preserve capital.
On March 31, I set DJIA 18,102 as a near-term potential under “My Technical Analysis of the 30 DJIA” (see below). At the time, I thought that was a “stretch.” It confirms the merit of analyzing each of the 30 Dow stocks separately before converting the results to the DJIA.
So far, the Street is taking the Q1 reports in stride, obviously comforted by its expectation that better news will begin to flow in Q4 and next year. That ma be, but there is little margin for error with stock prices at lofty levels.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,906; S&P 500:2,083; Nasdaq Comp.:4,898.
RESISTANCE “today”: DJIA:18,156; S&P 500:2,109; Nasdaq Comp.:4,959.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 31, 2016, a reasonable risk is 17,664 a more extreme risk is 16,560. Near-term upside potential is 18,102
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Briefing.com
**Stock Trader’s Almanac
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Street to Key on Q1 Earnings

Investor’s first read – Daily edge before the open
DJIA: 18,004
S&P 500: 2,094
Nasdaq Comp.4,960:
Russell 2000: 1,139
Tuesday: April 19, 2016 9:07 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Referring to Sunday’s oil meet in Doha, Friday’s post noted, “It looks like good news is already discounted in the price of oil. Bad news isn’t ! A blow up or continuing uncertainty would hammer stock and commodity markets Monday.”
WRONG ! The price of oil stabilized and the stock market rose yesterday after an early hit.
Yesterday’s headline, “CORRECTION STARTING ?”
Market’s answer: NO, not today !
The big meet of oil ministers from 16 nations in Doha Sunday was a bust. Iran was the sticking point. It did not attend the meeting, stating it needed to reach pre sanction levels first. Saudi Arabia claimed it would not freeze production unless all oil producers froze production.
While the price of oil was down sharply at the open yesterday but rebounded. The expected drop in oil prices was tempered by the drop in production caused by a labor strike in Kuwait, OPEC’s fourth biggest producer.
Some cracks in the 7-year bull market are beginning to appear, and should be respected.
1-U.S. retail sales have been flat for a year and are now turning down.
2-March Vehicle sales turned in the worst performance in 6 and one-half years.
3-The IMF’s semiannual World Economic Outlook trimmed its 2016 growth forecast with downgrades for the U.S., UK, Japan, the Euro area , Brazil and Russia.
4-The failure of oil producers to agree Sunday on its freeze tosses the issue of oil prices into another quagmire.
5- The flow of Q1 earnings will be mostly negative, with little help expected in Q2.
6-The eighth year of a two term presidency tends to be a bummer. This on won’t be different.
7-The S&P 500 sells at 17.8 X trailing earnings. At 26.3 X , Shiller’s P/E is 58% above its historic norm, leaving little wiggle room for the Bulls.
TODAY
Right now, the Street is betting on a rebound in earnings in Q4, though any big percentage jump would be partly due to its comparison with a weak Q4, 2015.
For most of this 7-year bull market the Street has had a single focus – Fed policy. The adage, “Don’t fight the Fed” has been around forever. There are a host of other key factors that comprise an economic recovery and bull market (see above).
Bear markets start well ahead of the beginning of a recession, anywhere from 6 to 12 months.
My point here is, just because the Fed sugar coats the economy, and the Street fixated on its every move is not good reason to get careless.
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Be careful. The nature of corrections has been to plunge rather than slide gradually, not giving investors much time to react to preserve capital.
On March 31, I set DJIA 18,102 as a near-term potential under “My Technical Analysis of the 30 DJIA” (see below). At the time, I thought that was a “stretch.” It confirms the merit of analyzing each of the 30 Dow stocks separately before converting the results to the DJIA.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,947 ; S&P 500:2,087; Nasdaq Comp.:4,945.
RESISTANCE “today”: DJIA:18,067; S&P 500:2,101; Nasdaq Comp.:4,977
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 31, 2016, a reasonable risk is 17,664 a more extreme risk is 16,560. Near-term upside potential is 18,102
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
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 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Briefing.com
**Stock Trader’s Almanac
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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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.

Correction Starting ?

Investor’s first read – Daily edge before the open
DJIA: 17,897
S&P 500: 2,080
Nasdaq Comp.4,938:
Russell 2000: 1,130
Monday: April 18, 2016 9:07 a.m.
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TODAY
Referring to Sunday’s oil meet in Doha, Friday’s post noted, “It looks like good news is already discounted in the price of oil. Bad news isn’t ! A blow up or continuing uncertainty would hammer stock and commodity markets Monday.”
The big meet of oil ministers from 16 nations in Doha yesterday was a bust. Iran was the sticking point. It did not attend the meeting, stating it needed to reach pre sanction levels first. Saudi Arabia claimed it would not freeze production unless all oil producers froze production.
So here we are, faced with yet another Mid-East crunch, lower oil prices and a stock market that is already on thin ice due to ugly Q1 earnings reports.
A plunge in oil prices may be tempered by a huge reduction in production caused by a labor strike in Kuwait, OPEC’s fourth biggest producer.
Is this the tipping point for the April correction I have expected ?
News is beginning to confirm trouble.
1-U.S. retail sales have been flat for a year and are now turning down.
2-March Vehicle sales turned in the worst performance in 6 and one-half years.
3-The IMF’s semiannual World Economic Outlook trimmed its 2016 growth forecast with downgrades for the U.S., UK, Japan, the Euro area , Brazil and Russia.
4-The failure of oil producers to agree Sunday on its freeze tosses the issue of oil prices into another quagmire.
5- The flow of Q1 earnings will be mostly negative, with little help expected in Q2.
6-The eighth year of a two term presidency tends to be a bummer. This on won’t be different.
7-The S&P 500 sells at 17.8 X trailing earnings. At 26.3 X , Shiller’s P/E is 58% above its historic norm, leaving little wiggle room for the Bulls.
CONCLUSION:
The Fed will do everything possible to avert a sharp drop in stock prices. However, that didn’t prevent chilling August 2015 and January/February plunges.
If the big picture on 2016 earnings (Q’s 1-4) is worse than expected, the market is heading south. Right now, the Street is betting on a rebound in earnings in Q4, though any big percentage jump would be partly due to its comparison with a weak Q4, 2015.
I am not surprised by the inability of the major oil producers to reach a decision in Doha this weekend. The Saudis got their way, as usual.
I am concerned about cracks in the global economic foundations and a pricey stock market. The level of stock prices is really a matter of consensus based on expectations for the future. Selling only 2.5% off its all-time highs, the S&P 500 is in the 7th year of a bull market that has risen 212%. Be very careful.
Q1 EARNINGS
So far, it looks like the Street is looking beyond Q1 earnings to Q4 when growth will appear to accelerate, mostly owing to a favorable comparison the weak showing in Q4 2015.
Companies will be issuing guidance for Q3 and Q4 from which analysts will issue projections. If revisions are lower across the board, the market will take a hit – higher, another leg up.
FactSet Research’s April 1 forecast revised Q1 earnings down to minus 8.5% (-3.7% ex energy) from a plus 0.8% projected in December. Of 121 company’s Q1 guidance, 94 have issued lower estimates. Currently, estimates for 2016 as a whole vary by source, but the trend appears to be downward revision.
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SUPPORT “today”: DJIA:17,763; S&P 500:2,066; Nasdaq Comp.:4,891.
RESISTANCE “today”: DJIA:17,953; S&P 500:2,087; Nasdaq Comp.:4,954.
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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 31, 2016, a reasonable risk is 17,664 a more extreme risk is 16,560. Near-term upside potential is 18,102
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ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
This supports my December forecast of an ugly January, a rough year as a whole, but with several buying opportunities.
FED HYPE CREATES POTENTIAL FOR FREE-FALL
The stock market is constantly adjusting for fundamental, economic, monetary, fiscal, political, psychological and global outlook, moving higher or lower depending on how it is perceived, a process I refer to as seeking a comfort level.
This sifting process is what creates rallies and corrections, bull and bear markets. In seeking a comfort level, the market often hits extremes if only momentarily.
By propping stock prices with verbal hype and changing policy projections, the Fed has denied the market the normal processing of all the other factors that comprise value.
Buyers jump in on Fed hype, and sellers defer action, hanging in as long as the Fed is in there with positive feed.
When an event triggers a sudden break, all that deferred selling hits a market that does not have enough buyers to absorb it, and you get a freefall. Throw in some highly leveraged positions on the wrong side of the market, and you get an horrendous freefall.
With a meltdown looming in 2008/2009 and the S&P 500 down 50% , the Fed had to step in. But, there is no good reason for the Fed to be propping the market now after the S&P 500 has tripled from its bear market lows.
What it is doing is creating a highly vulnerable market, one that can devastate investors if the Fed hype suddenly fails to work.
Freefalls come out of nowhere. Before an investor can respond, markets can be down 3% – 5% en route to a 12% – 20% – 35% plunge.
Like a rogue wave, the next one will strike without warning.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Briefing.com
**Stock Trader’s Almanac
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.