Street Eyes Sunday Oil Meet in Doha

Investor’s first read – Daily edge before the open
DJIA: 17,926
S&P 500: 2,042
Nasdaq Comp.: c4,945.:
Russell 2000: 1,128
Friday: April 15, 2016 9:07 a.m.
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The Street heads into the weekend expecting good news coming out of the April 17 oil talks in Doha, Qatar. The freeze in oil production unofficially agreed to by Saudi Arabia, Russia, Qatar, and Venezuela, is expected to go ahead without a hitch.
Brent crude, the benchmark for global (sweet, light) crude is up 30% since the four agreed to agree Feb. 16. Iran’s participation could be a sticking point. Fifteen countries including members and non-members will meet in Doha Sunday.
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.
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.
TODAY
Obviously, bad news out of Doha would rankle stock and commodity markets.
The market will go up sharply or down depends on what the Street sees for Q4 earnings and beyond, though in this uncertain environment any projections that far out would be suspect.
I expect a rough ride into year-end – several sharp moves down, but a few opportunities for traders to scalp a quick profit, and one major opportunity for longer tern buyers to enter, probably in the fall, if we get a big crunch.
While the Street may push prices higher based on currently perceived Fed policy, I think this market is working on an intermediate-term top. Whether that evolves into a bear market depends on whether new negatives hit the market when it is down.
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SUPPORT “today”: DJIA:17,753; S&P 500:2,067; Nasdaq Comp.:4,893.
RESISTANCE “today”: DJIA:18,006; S&P 500:2,092; Nasdaq Comp.:4,967.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
 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.

Easy Does It !

Investor’s first read – Daily edge before the open
DJIA:17908
S&P 500:2,082
Nasdaq Comp.:4,947
Russell 2000: 1,129
Thursday: April 14, 2016 8:07 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
TODAY
The market wants to go up. Money managers are pressed for performance, unfortunately at a time they shouldn’t be pressed.
It looks like investors are seeking yield, since they aren’t getting a return on CDs, money markets and bonds.
Just that alone, can press the market up to challenge all-time highs.
Pressure is mounting on investors to jump in, as so often happens when a market presses higher and higher.
As the market rises, so does risk. This is not an “all-in” market.
What can go wrong here ?
Well, the April 17 talks in Doha, Qatar confirming a freeze in oil production unofficially agreed to by Saudi Arabia, Russia, Qatar, and Venezuela could be inconclusive, even blow up.
Brent crude, the benchmark for global (sweet, light) crude is up 30% since the four agreed to agree Feb. 16. Iran’s participation could be a sticking point. Fifteen countries including members and non-members will meet in Doha Sunday.
It looks like the Street is not intimidated by an expected ugly Q1, but it is too early to tell. There are some cracks in the foundation, one being a 2.1% drop in March auto sales. Quarter reports for CSX and JPMorganChase (JPM) were anything but exciting, though both stocks rose.
THIS IS A PHONY MARKET. I DO NOT GET THE IMPRESSION THE STREET IS SURE OF ANYTHING EXCEPT IT LOVES WHEN THE FED FILI-FLOPS IN THE DIRECTION OF SLOWMO ON INTEREST RATE INCREASES.
If the Fed is unable to justify another increase in rates, what does that say about the economy ?
If the Fed increases rates with the prospect of more rate increases to follow, the Street’s “blankie” will be yanked away and we will have another one of those freefalls, this time one that will take longer to recover.
Selective rules, just sit close to the exit. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,819; S&P 500:2,072; Nasdaq Comp.:4,931.
RESISTANCE “today”: DJIA:18,006; S&P 500:2,093; Nasdaq Comp.:4,974.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
 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.

Market at a Crossroads – Sharp Move Likely

Investor’s first read – Daily edge before the open
DJIA:17,721
S&P 500:2,061
Nasdaq Comp.: 4,821.:
Russell 2000: 1,105c
Wednesday: April 13, 2016 9:07 a.m.
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Q1 EARNINGS
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. Q3 are expected to make better reading, but going up against a weak Q4 a year ago, earnings growth in Q4 2016 are projected to exceed 10%.
What is least expected here is the Street may ignore Q1 and look out to Q4 and even rally further this month before hitting serious resistance.
However, I don’t think that can happen if guidance and projections for Q4 are revised down.
Just be aware that the Street may do the unexpected in this case, and that means one more surge before a correction.
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.
OIL
April 17 meeting in Doha will confirm a production freeze. The Saudis insist Iran agree, but Kuwait says that isn’t necessary. Adding to the jump in oil prices is an unexpected drop in U.S. crude inventories.
TODAY
Yesterday’s jump in prices as the Q1 earnings report period begins suggests the Street is not intimidated by what is widely expected to be an ugly sight, opting instead for the second half of the year when earnings are projected to increase sharply albeit compared to a paltry quarters a year ago.
What can go wrong here ?
Well, the April 17 talks in Doha, Qatar confirming a freeze in oil production unofficially agreed to by Saudi Arabia, Russia, Qatar, and Venezuela could be inconclusive, even blow up.
Brent crude, the benchmark for global (sweet, light) crude is up 30% since the four agreed to agree Feb. 16. Iran’s participation could be a sticking point. Fifteen countries including members and non-members will meet in Doha Sunday.
Monday morning could be interesting.
It is too early to tell if the market will take a hit in face of lower Q1 earnings.
The decline into election time may not start until later in April, so much depends on corporate guidance and the Street’s projections for Q4 when earnings are expected to increase 11%. The market will tell us what they are thinking.
The bulls must drive the market beyond the April 1 peak of DJIA 17,811 (S&P 500: 2,075) to gain traction.
The market is at a crossroads with the potential for a very sharp move up or down. We should be getting the answer shortly.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,436; S&P 500:2,029; Nasdaq Comp.:4,811.
RESISTANCE “today”: DJIA:17,661; S&P 500:2,058; Nasdaq Comp.:4,875.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
 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.

Will the Street Ignore Bad Q1 Earnings ?

Investor’s first read – Daily edge before the open
DJIA:17,556
S&P 500:2,041
Nasdaq Comp.:4,833
Russell 2000: 1,084
Tuesday: April 12, 2016 8:59 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Q1 EARNINGS
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. Q3 are expected to make better reading, but going up against a weak Q4 a year ago, earnings growth in Q4 2016 are projected to exceed 10%.
What is least expected here is the Street may ignore Q1 and look out to Q4 and even rally further this month before hitting serious resistance.
However, I don’t think that can happen if guidance and projections for Q4 are revised down.
Just be aware that the Street may do the unexpected in this case, and that means one more surge before a correction.
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.
OIL
April 17 meeting in Doha will confirm a production freeze. The Saudis insist Iran agree, but Kuwait says that isn’t necessary. Adding to the jump in oil prices is an unexpected drop in U.S. crude inventories.
TODAY
Yesterday marked the third straight rally failure – not good, but the real test lies ahead as Q1 earnings hit and new projections for the rest of 2016 are drawn.
While, the market should go down under these conditions, I just think investors should be reminded that when least expected it often defies the consensus and goes in the opposite direction, i.e. there are not enough investors now who are convinced the market is going higher.
I can see a good technical case for DJIA 17,200 (S&P 500: 2,005) this week. So much depends on how the Street greets Q1 earnings.
None of this changes my expectation for more plunges and a couple trading opportunities before year-end and even that it begins this month.
There is an even chance, we will see one more head fake before the plug is pulled.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,436; S&P 500:2,029; Nasdaq Comp.:4,811.
RESISTANCE “today”: DJIA:17,661; S&P 500:2,058; Nasdaq Comp.:4,875.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Entering Critical Weeks

Investor’s first read – Daily edge before the open
DJIA:17,576
S&P 500:2,047
Nasdaq Comp.:4,850
Russell 2000: 1,097
Monday: April 11, 2016 8:53 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
April 17 meeting in Doha will confirm a production freeze. The Saudis insist Iran agree, but Kuwait says that isn’t necessary. Adding to the jump in oil prices is an unexpected drop in U.S. crude inventories.
While oil still has clout, Q1 earnings will take center stage in coming weeks. The reports are not expected to be bedtime reading, but there is always a chance they won’t be as bad as expected in which the market will go up sharply.
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
TODAY
Well, here we go – another quarterly earnings report. Not much has been said about this one, which is expected to be a downer by 3.7% (ex oil). Expect the Street to punish any company that surprises on the downside, or just doesn’t “beat” by enough on the upside.
An ugly Q1 may already be priced into a market. If earnings surprise on the upside, look for a strong rally.
The Street has hung its hat on Q3 and Q4 earnings which have until now been expected to rebound nicely. If the projections and corporate guidance are revised down, the market will take a big hit from these lofty levels.
The Fed can only prop the market up for so long. If the economy and earnings don’t firm up soon, the market is going south.
Therein lies a risk that has been overlooked. The Fed has artificially propped up the market, hoping to be bailed out by global recovery.
While I am hoping for the same, hope doesn’t cut it in this business where score is kept every day. The Fed has created a phony market keyed on one thing – ultra low interest rates – little else.
It is that kind of delusion by the Street that led to the August 2015 and January 2016 freefalls. The next one could be worse heading into a highly divisive election.
Unlike orderly corrections that rid the market of jittery sellers and establish a comfort level, freefalls give investors little chance to lighten up before a portfolio is savaged.
While the market bounced back from the August 2105 and January 2016 crunch, it may not be so quick to rebound the next time down. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,436 ; S&P 500:2,029; Nasdaq Comp.:4,811.
RESISTANCE “today”: DJIA:17,661; S&P 500:2,058; Nasdaq Comp.:4,875.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Rally Must Hold

Investor’s first read – Daily edge before the open
DJIA:17,541
S&P 500:2,041
Nasdaq Comp.: 4,848.:
Russell 2000: 1,092
Friday: April 8, 2016 8:33 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
EARNINGS
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
TODAY
We are in a saw-toothed, sideways consolidation phase that could last a week or two.
Oil prices soared Wednesday, slipped yesterday, but have rebounded today in anticipation the April 17 meeting in Doha will confirm a production freeze. The Saudis insist Iran agree, but Kuwait says that isn’t necessary. Adding to the jump in oil prices is an unexpected drop in U.S. crude inventories.
While oil still has clout, Q1 earnings will take center stage in coming weeks. The reports are not expected to be bedtime reading, but there is always a chance they won’t be as bad as expected in which the market will go up sharply.
Stock index futures rebounded sharply before the open today indicating a positive open. This kind of volatility, up one day, down the next, usually precedes a major move in the near future.
While the bulls got shellacked yesterday, they aren’t about to yield more turf without a fight. Just how much fight should be evident in their ability to follow through today and hold their gain.
A rally failure suggests more downside. A strong surge that closes at the highs for the day indicates another up-leg in this saw-tooth pattern.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,466; S&P 500:2,031; Nasdaq Comp.:4,826.
RESISTANCE “today”: DJIA:17,627; S&P 500:2,053; Nasdaq Comp.:4,873.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

The U.S. DOLLAR
Recently it became obvious that the stock market and price of oil were in lockstep with the trend of the U.S. dollar. When the latter went up the market and oil went down and vice-versa.
Many things influence the direction of the stock market and commodities which are priced in dollars, but in the absence of other factors the dollar will have an impact.
For what it’s worth, the Commodities Futures Trading Commission’s (CFTC) data indicates that “bets” that the dollar will strengthen has fallen to the lowest level since July 2014, when the dollar began a 17% run, meaning the pros expect it to drop further.
That would bode well for oil and stocks, but this extreme reading arouses my contrary instincts – how could so many people be right ?
OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Volatility and Uncertainty – Q1 Earnings

Investor’s first read – Daily edge before the open
DJIA:17,716
S&P 500:2,066
Nasdaq Comp.:4,920
Russell 2000: 1,108
Thursday: April 7, 2016 8:49 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
EARNINGS
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
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.
THE FED (again)
The minutes from the Federal Open Market Committee (FOMC) meeting were released yesterday at 2:00 p.m., and reflected differences of opinion within the FOMC, but the Street reacted with buying since no bump in interest rates is expected at the April26-27 meeting (no press conference)

The Fed will be there with verbal support in the event the Street gets spooked by Q1 earnings reports which are expected to be down for the 4th straight quarter. Obviously, better than expected earnings would trigger a strong leg up.
Investors cannot get to comfy with Fed micro-management of the stock market in the event pent up negatives over-ride the Feds clout.
There is a danger for the Fed in not letting the market to adjust to negatives as they unfold, postponing until another day when negatives simply over ride Fed hype with an abrupt downdraft like those in August 2015 and January this year
Fed intervention was necessary in 2008/2009 in order to head off a meltdown, but with stock prices at these lofty levels, tampering could set up a false sense of security for investors who have become indifferent to risk.
TODAY
We are in a saw-toothed, sideways consolidation phase that could last a week or two.
Oil prices soared yesterday in face of a surprise drop in inventories. The Energy Information Administration reported U.S. crude supplies in storage declined 4.9 million barrels in the April 1 week. At 529.9 million barrels, inventories are still historically high for this time of the year.
This industry is highly news-sensitive.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,627; S&P 500:2,058; Nasdaq Comp.:4,901.
RESISTANCE “today”: DJIA:17,741; S&P 500:2,069; Nasdaq Comp.:4,928.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The U.S. DOLLAR
Recently it became obvious that the stock market and price of oil were in lockstep with the trend of the U.S. dollar. When the latter went up the market and oil went down and vice-versa.
Many things influence the direction of the stock market and commodities which are priced in dollars, but in the absence of other factors the dollar will have an impact.
For what it’s worth, the Commodities Futures Trading Commission’s (CFTC) data indicates that “bets” that the dollar will strengthen has fallen to the lowest level since July 2014, when the dollar began a 17% run, meaning the pros expect it to drop further.
That would bode well for oil and stocks, but this extreme reading arouses my contrary instincts – how could so many people be right ?
OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Consolidation Now Leading to a Correction

Investor’s first read – Daily edge before the open
DJIA:17,603
S&P 500:2,045
Nasdaq Comp.:4,843
Russell 2000: 1,095
Wednesday: April 6, 2016 8:34 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
EARNINGS
Q1 earnings have begun to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
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.
TODAY
The minutes from the Federal Open Market Committee (FOMC) meeting will be released today at 2:00 p.m., but won’t be followed by a press conference. The Street does not expect major news, but will senselessly parse every word of the release for a clue as to when the Fed will bump rates next.

We are in a saw-toothed, sideways consolidation phase that could last a week or two.
Yesterday’s slide was really about Q1 earnings, which have begun to hit with an overall drop of 8% expected, about half that excluding energy.
Forecasts for earnings have been revised downward since December, so some of the jolt for Q1 is already priced into the market. What isn’t priced in is Q3 and Q4.
To a great extent, the direction of stock prices is driven by investor expectations. If 2017 looks like a boomer, the Street look beyond 2016 and be buyers this year.
But with our economic expansion approaching seven years in length (80 months), well beyond the 50-year average of 65 months, thought must be given to the possibility of a recession next year.
How wise is it to base current investment policy on the expectation of booming 2017 earnings ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,486; S&P 500:2,031; Nasdaq Comp.:4,813.
RESISTANCE “today”: DJIA:17,666; S&P 500:2,051; Nasdaq Comp.:4,861.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The U.S. DOLLAR
Recently it became obvious that the stock market and price of oil were in lockstep with the trend of the U.S. dollar. When the latter went up the market and oil went down and vice-versa.
Many things influence the direction of the stock market and commodities which are priced in dollars, but in the absence of other factors the dollar will have an impact.
For what it’s worth, the Commodities Futures Trading Commission’s (CFTC) data indicates that “bets” that the dollar will strengthen has fallen to the lowest level since July 2014, when the dollar began a 17% run, meaning the pros expect it to drop further.
That would bode well for oil and stocks, but this extreme reading arouses my contrary instincts – how could so many people be right ?
OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Q1 Earnings – How Bad ?

Investor’s first read – Daily edge before the open
DJIA:17,737
S&P 500:2,066
Nasdaq Comp4,891.:
Russell 2000: 1,108
Tuesday: April 5, 2016 8:58 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
The U.S. DOLLAR
Recently it became obvious that the stock market and price of oil were in lockstep with the trend of the U.S. dollar. When the latter went up the market and oil went down and vice-versa.
Many things influence the direction of the stock market and commodities which are priced in dollars, but in the absence of other factors the dollar will have an impact.
For what it’s worth, the Commodities Futures Trading Commission’s (CFTC) data indicates that “bets” that the dollar will strengthen has fallen to the lowest level since July 2014, when the dollar began a 17% run, meaning the pros expect it to drop further.
That would bode well for oil and stocks, but this extreme reading arouses my contrary instincts – how could so many people be right ?
OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomberg.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.
EARNINGS
In one week, Q1 earnings will begin to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
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.
TODAY
The market has been in a consolidation phase for four days and based on pre-market futures trading will add a fifth.
Most of the buying in recent days after a 14% run has been institutions buying as Q2 begins. The real test will come as earnings begin to roll in.
The minutes from the Federal Open Market Committee (FOMC) meeting will be released tomorrow at 2:00 p.m., but won’t be followed by a press conference. The Street does not expect major news.
We are in a saw-toothed, sideways consolidation phase that could last a week or two.
Forecasts for earnings have been revised downward since December.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,586; S&P 500:2,047; Nasdaq Comp.:4,843.
RESISTANCE “today”: DJIA:17,703; S&P 500:2,059; Nasdaq Comp.:4,880.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

April Q1 Earnings – Crucial

Investor’s first read – Daily edge before the open
DJIA:17,792
S&P 500:2,072
Nasdaq Comp4,914.:
Russell 2000: 1,117
Monday: April 4, 2016 9:04 a.m.
/////////////////////////////////////////////////////////////////////////////////////////////////////////
OIL
The hedge funds are shorting oil for the first time in two months, according to Bloomber.com. Seems there is doubt the price freeze agreed to by Saudi Arabia, Russia, Venezuela and Qatar is in ineffective if Iran does not go along. A meeting held in Doha, Qatar on April 17 will shed more light on the future of a global surplus.
The stock market has been getting its marching orders from both the direction of the price of oil and the U.S. dollar.
See what I mean when I say there always several balls up in the air with the outlook for stock prices ? At any time one or more can come down to change or sustain the market’s direction. Toss in the Fed, economies here and abroad, mid-east tensions, the elections, and the next global problem to surface and you have a challenge second to none.
That’s what always has attracted me to this business. Blink and you’re toast.
ECONOMY:
Last week, I alerted you to the possibility of a rebound in U.S. manufacturing, which has been in a recession for many months. Worth noting was last week’s report of a 2.3% surge in March ISM New Orders. This may impact the Factory Orders report at 10 o’clock today. The ISM report covers new orders, inventories, production, supplier deliveries, employment and production.
Employment is strong and the labor participation rate is soaring as people return to the workforce.
The FOMC meets this week with its minutes released at 2:00 a.m., but no press conference.
EARNINGS (Nothing new – re-read anyhow – important)
In one week, Q1 earnings will begin to flow and are projected to be down, as are Q2 earnings. It doesn’t get more fundamental than earnings, yet other issues have dominated the attention of the Street so far this year.
April could be the “decider” on whether 2016 is a bear market year, or just a volatile one with big swings up and down as we near the November election.
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.
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.
TODAY
I am still expecting volatility as the market heads into the Q1 earnings season. Q1 is expected to be ugly. Anything better than that bumps stocks up, however as noted above, April is shaping up as a month a sharp correction begins in keeping with the pattern for the eighth year of a presidency (see above).
The Fed has clout but little credibility, having flip-flopped on policy three times in three months.
The S&P 500 is up 14.4% in 8 weeks. That’s a lot in a short period of time. The move has been driven by a rebound in oil and drop in the U.S. dollar, quarter-end buying by funds, and comments by the Fed not to expect another bump in rates in the near future.
Memories of the worst January performance in 75 years have given way to thoughts of a bull market that will not be denied.
At this point, so much depends on earnings, which have been given little attention in recent months.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA: 17,701; S&P 500:2,061; Nasdaq Comp.:4,871.
RESISTANCE “today”: DJIA:17,901; S&P 500:2,086; Nasdaq Comp.:4,953.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.