BIG Week Reports on Economy

Investor’s first read – Daily edge before the open
DJIA: 17,873
S&P 500: 2,099
Nasdaq Comp.:4,933
Russell 2000: 1,150
Tuesday, May 31, 2016 9:01 a.m.
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This is a huge week for economic reports, with the potential to give the Street a clue on whether the Fed will raise rates at its FOMC meeting June 15.
Personal Income and the S&P Case-Shiller HPI come before the open today followed by Consumer Confidence, the State Street Investor Confidence and Dallas Fed Mfg. reports at 10:00.
Wednesday its ADP Employment at 8:15 a.m., PMI Mfg. (9:45), ISM Mfg. and Construction Spending at 10:00. Jobless Claims come at 8:30. The all-important Employment Situation comes Friday at 8:30, followed by PMI Services (9:45), Factory Orders and ISM Non-Mfg. at 10:00.
Fed Chief Janet Yellen spoke Friday noting the economy is picking up after a sluggish Q1, that the Fed will gradually and cautiously increase interest rates over time and probably in coming months. Some of her colleagues agree.
The Street is pondering uncertainties, namely:
– the recent strength of the U.S. dollar and it’s impact on internationally derived earnings in Q4 when the Street is hoping for an earnings rebound.
– OPEC’s meeting on Thursday
– FOMC’s meeting June 15
-Brexit outcome June 23
-can the consumer continue to drive the economy ?
-will corporate America spend less on buying its own shares and spend more on capital goods.
-how long will the economic expansion last. The current one started in June 2009 and is 84 months old. The average post WWII was 54 months
-the election. Regardless of outcome – expect polarization beyond belief.
TODAY
RECAP: Last Wednesday I headlined, “Last Rally Before a Plunge” based on a striking similarity between today’s technical patterns and those existing prior to severe plunges in August 2015 and January this year. Friday, I said nothing has changed in spite of a move up in the market, but added the “market can move higher before voiding the comparison with August and January.”
I still see this as the “rally” before a plunge, the obvious question being when does it top out ?
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500: 2,111).
Why ?
Market turns often occur after a brief break above or below a previous high or low. The BIG money uses the press hoopla about the break above or below those points to sell or buy because of sharp press-induced volume.
Two good things can happen here – one bad. The market can move sideways within a trading range, or it can continue in another leg up in this 7-year bull market.
The bad thing that can happen is a five month plunge that will take investors well into 2017 to recover from, assuming 2017 is not a recession year, then it will take longer.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way.
The question investors must ask themselves is, is it worth rolling the dice with an aging bull market that is selling near its highs (DJIA up 177%, S&P 500 up 215%, Nasdaq up 290%) ?
In December I called for a top in January and we had the worst January on record. I said 2016 would be a rough year with a few buying opportunities of which we have had two. In March I called for a peak in April and so far the 20th holds. So far, I hold to my forecast.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,805; S&P 500:2,088; Nasdaq Comp.:4,889.
RESISTANCE “today”: DJIA:18.034; S&P 500:2,116; Nasdaq Comp.:4,971.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 26, 2016, a reasonable risk is 17,656 a more extreme risk is 17,526. Near-term upside potential is 17,963.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Only a BIG Push Would Change “Last Rally”

Investor’s first read – Daily edge before the open
DJIA: 17,828
S&P 500: 2,090
Nasdaq Comp.:4,901
Russell 2000: 1,139
Thursday, May 26, 2016 9:01 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
Wednesday’s headline, “Last Rally Before a Plunge” was based on a striking similarity between today’s technical pattern and the patterns that existed prior to severe plunges in August 2015 and January 2016.
Nothing has changed. The market can move higher before voiding the comparison with August and January.
Fed Chief Janet Yellen speaks today at 10:30. Expect the market to react to her comments. Going in to that speech, the Street expects a bump in the federal funds rate at the June 15 meeting.
She may hedge on that, trying to maintain a stable and positive tone to a stock market that has every reason to become nervous about the outcome of the November election.
Again, the question investors must ask themselves is, is it worth rolling the dice with an aging bull market that is selling near its highs (DJIA up 171%, S&P 500 up 206%, Nasdaq up 273%).
Two good things can happen here. The market can stabilize and move sideways within a trading range, or it can begin another leg up in this 7-year bull market.
The bad thing that can happen is a five month plunge that will take investors well into 2017 to recover from, assuming 2017 is not a recession year.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way.
In December I called for a top in January and we had the worst January on record. I said 2016 would be a rough year with a few buying opportunities of which we have had two. In March I called for a peak in April and so far the 20th holds. So far, I hold to my forecast.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,651; S&P 500:2,064; Nasdaq Comp.:4,841.
RESISTANCE “today”: DJIA:17,987; S&P 500:2,101 Nasdaq Comp.:4,945. This assumes Yellen suggests a rate increase may not happen in June, maybe not in 2016. A jump to these levels would be a SELL for traders and investors needing to raise more cash reserve to protect capital.
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OPINION: One of these days all this digital stuff is going to come down around our ankles and it will be a long time before they can put humpty dumpty back together again. Keep hard copies of everything. Too much outsourcing without supervision – right hand doesn’t know what left hand is doing. Just my HO.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 26, 2016, a reasonable risk is 17,656 a more extreme risk is 17,526. Near-term upside potential is 17,963.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Another August 2015 / January 2016 ?

Investor’s first read – Daily edge before the open
DJIA: 17,851
S&P 500: 2,090
Nasdaq Comp.:4,894
Russell 2000: 1,141
Thursday, May 26, 2016 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
Yesterday’s headline, “Last Rally Before a Plunge” was based on a striking similarity between today’s technical pattern and the patterns that existed prior to severe plunges in August 2015 and January 2016.
Nothing has changed in spite of yesterday’s surge. In fact, the market can move higher before voiding the comparison with August and January.
Can the Fed suddenly back away from its hint that a June bump in rates is in the offing ?
Why not ? The Feds Governors on the speech circuit contradict each other all the time. The Street may as well just wait for the minutes of the FOMC meetings to make decisions.
The question investors must ask themselves is, it worth rolling the dice with an aging bull market that is selling near its highs (DJIA up 171%, S&P 500 up 206%, Nasdaq up 273%).
Two good things can happen here. The market can stabilize and move sideways within a trading range, or it can begin another leg up in this 7-year bull market.
The bad thing that can happen is a five month plunge that will take investors well into 2017 to recover from, assuming 2017 is not a recession year.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way.
In December I called for a top in January and we had the worst January on record. I said 2016 would be a rough year with a few buying opportunities of which we have had two. In March I called for a peak in April and so far the 20th holds. So far, I hold to my forecast.
Fed Chief Janet Yellen speaks at 10:30 tomorrow before the three-day weekend.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,776; S&P 500:2,081; Nasdaq Comp.:4,876
RESISTANCE “today”: DJIA:17,965; S&P 500:2,101; Nasdaq Comp.:4,921.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 20, 2016, a reasonable risk is 17,278 a more extreme risk is 17,140. Near-term upside potential is 17,668.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Last Rally Before a Plunge ? Aug. 2015 ? Jan. 2016 ?

Investor’s first read – Daily edge before the open
DJIA: 17,706
S&P 500: 2,076
Nasdaq Comp.:4,861
Russell 2000: 1,135
Tuesday, May 25, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
The technical patterns of the DJIA, S&P 500, and Nasdaq Comp. now bear an eerie resemblance to the technical patterns before the August 2015 and January 2016 plunges. Damn near identical in terms of technical indicators and moving averages.
Can this time be different ?
Of course, but is it worth rolling the dice with an aging bull market
that is selling near its highs (DJIA up 171%, S&P 500 up 206%, Nasdaq up 273%) ?
The bull could be extended a bit if the Fed delays a June rate increase, an announcement that would trigger a huge one-day reversal, but is it worth rolling the dice on that ?
Yesterday’s rally had to happen after a 22-day slide. Bank stocks and tech stocks led the charge, bank stocks because they benefit from higher interest rates, tech stocks because the were overly depressed.
A 16.6% surge in April new home sales was encouraging for those looking for a sign the economy was not tanking. It also helped home builder stocks.
Yesterday, I noted that serious overhead supply exists at DJIA 17,760, S&P 500: 2,072, Nasdaq Comp.: 4,841. The market averages hit those levels yesterday.
Two good things can happen here. The market can stabilize and move sideways within a trading range, or it can begin another leg up in this 7-year bull market.
No one likes an analyst who says “SELL,” They hate them when they say it, they hate them even more if they are right. They snicker if they are wrong.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way.
In December I called for a top in January and we had the worst January on record. I said 2016 would be a rough year with a few buying opportunities of which we have had two. In March I called for a peak in April and so far the 20th holds. So far, I hold to my forecast.
The technical similarities between the current market and the August 2015 and January 2016 markets cannot be ignored. A sizable cash reserve is warranted. If the market stabilizes, that reserve can be employed with less risk.
The bulls have to bring it big time to render the similarities of these markets irrelevant.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today” : DJIA:17,576; S&P 500:2,063 ; Nasdaq Comp.:4,819
RESISTANCE “today”: DJIA:17,787; S&P 500:2,085; Nasdaq Comp.:4,883.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 20, 2016, a reasonable risk is 17,278 a more extreme risk is 17,140. Near-term upside potential is 17,668.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Technical Rally Overdue, But Risky

Investor’s first read – Daily edge before the open
DJIA: 17,492
S&P 500: 2,048
Nasdaq Comp.4,765
Russell 2000: 1,111
Tuesday, May 24, 2016 8:58 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
Pre-market trading in stock-index futures indicates a sharp bounce at the open, more a technical rally than fundamental. Reportedly there is a lot of cash on the sidelines after a 2016 high on April 20 and steady slide since.
Lower prices are attractive to institutions, even in face of well-known negatives, not the least of which is a prospective second increase in the federal funds rate on June 15.
The rally isn’t business-as-usual – i.e., stocks moving up at the same time oil is moving down and the US dollar rising, and the Fed expected to bump interest rates up next month, worst case, July.
But at a price, most stocks are a buy, and money managers have to put money to work.
The key is follow through. Can today’s rally be more than a three day affair ?
The S&P 500 dropped 4.1% since its April 20, 2016 top, the Nasdaq 5.9%.
As corrections go, that is pattycake stuff, so an “all-in” position here in face of negatives and uncertainties is risky.
I suspect, this rally will be the last before the correction started in mid-April gains more momentum.
Serious overhead supply exists at DJIA 17,760, S&P 500: 2,072, Nasdaq Comp.: 4,841
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RESISTANCE “today”: DJIA:17,634; S&P 500:2,061; Nasdaq Comp.:4,791.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 20, 2016, a reasonable risk is 17,278 a more extreme risk is 17,140. Near-term upside potential is 17,668.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Fed Out In Force This Week

Investor’s first read – Daily edge before the open
DJIA: 17,500
S&P 500: 2,052
Nasdaq Comp.4,769:
Russell 2000: ,111
Monday, May 23, 2016 9:12 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Federal Reserve is now doing another moonwalk on policy – implying it will raise its benchmark federal funds rate at its June 15 FOMC meeting, so soon after recently implying it won’t, so soon after it implied it would , etc.
How can any investor or institution schedule investments with this much inconsistency ?
This week will be interesting. Fed officials will be on the stump with anyone’s guess what the message will be higher or lower rates at its June 15 meeting.
The Fed’s James Bullard and Eric Rosengren expressed support for a June rate hike before today’s open, Robert Kaplan at 1:00 p.m. Wednesday, Bullard will speak at 5:15 a.m. Wednesday, Jerome Powell 12:15 p.m. Thursday, and Fed Chief Yellen Friday at 10:30.
Economic growth has been inconsistent in recent months and is not giving the Fed a bright green light to bump rates for the second time since December.
Vehicle sales have been slowing in recent months, energy equipment sales have not benefitted from the jump in oil prices. The Empire State and Philly Fed indexes weakened further in May and excluding energy, the core inflation rate edged lower for the second month.
TODAY
It looks like the Fed is on track to raise rates above its current range of 0.25 percent – 0.50 percent. We should hear all about it this week ????
This is where the Fed likes it – total control. The problem for the Street is, inconsistency – what will the Fed say two weeks from now ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,401; S&P 500:2,039; Nasdaq Comp.:4,733.
RESISTANCE “today”: DJIA:17,601; S&P 500:2,061; Nasdaq Comp.:4,786.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 20, 2016, a reasonable risk is 17,278 a more extreme risk is 17,140. Near-term upside potential is 17,668.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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 Rallying Into Overhead Supply

Investor’s first read – Daily edge before the open
DJIA: 17,435
S&P 500: 2,040
Nasdaq Comp.:4,712
Russell 2000: 1.094
Friday, May 20, 2016 8:56 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Bulls and bears – musical chairs – who sits it out next ?
The Street’s quandary about what to do is fed by a host of uncertainties.
-Will the Fed raise interest rates at its FOMC meeting June 15 ?
-How much would that push a rising US dollar higher ?
-What would the impact be on the earnings of U.S. companies with global business ?
-Likewise commodity prices, none the least of which are oil companies.
-What will come out of OPEC’s June 2 meeting ?
-Brexit – June 23 ?
-What about the November election ???
Small wonder we are seeing extreme volatility.
TODAY
Look for a solid open across the board, that should have difficulty gaining traction much beyond my “resistance” levels noted below.
This week’s economic numbers were mixed raising questions whether the Fed will raise rates at its June 15 FOMC meeting. Nevertheless, commentary out of this month’s meeting suggested a June bump was a good possibility, triggering selling Wednesday and Thursday.
With so many uncertainties facing the market, it is hard to see one piece of news turning the market up near-term, other than a rally or two.
Buyers are there to catch stock for sale, but aren’t aggressive enough to turn control over to the bulls. If for some reason they withdraw to the sidelines, this market goes south in a hurry.
This is a trader’s market, but only the nimble can scalp a quick profit with the swings up and down too abbreviated.
To date, the S&P 500 has dropped 4.1% (Nasdaq Comp. 5.9%) since the April 20 highs in keeping with my forecast for an April top before a correction set in. I expect more downside before the correction finds a bottom with technical rallies along the way.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,401; S&P 500:2,034; Nasdaq Comp.:4,696. Breaking these levels, look for DJIA: 17,290; S&P 500: 2,021; Nasdaq Comp.: 4,676.
RESISTANCE “today”: DJIA:17,557; S&P 500:2,053; Nasdaq Comp.:4,743.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: The Street is beginning to worry about a June bump in interest rates. The FOMC reports its minutes from its meeting tomorrow at 2:00. It matters little what the minutes contain, the Street’s expectation of when a rate increase will take place will fluctuate, especially in face of conflicting commentary by Fed officials out on the speakers’ circuit.
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NEW PROJECTION:
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 May 20, 2016, a reasonable risk is 17,278 a more extreme risk is 17,140. Near-term upside potential is 17,668.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Seeking a Comfort Level

Investor’s first read – Daily edge before the open
DJIA: 17,526
S&P 500:2,049
Nasdaq Comp4,739.:
Russell 2000: 1,102
Thursday, May 19, 2016 9:11 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The minutes from the FOMC meeting yesterday suggested a greater likelihood of a June bump in interest rates, assuming economic growth picks up, the labor market and inflation continues to strengthen.
The Market took a hit following the 2:00 p.m. report, then stabilized at the close, when the Street realized nothing new was to be learned.
The Street’s quandary about what to do is fed by a host of uncertainties.
-Will the Fed raise interest rates at its FOMC meeting June 15 ?
-How much would that push a rising US dollar higher ?
-What would the impact be on the earnings of U.S. companies with global business ?
-Likewise commodity prices, none the least of which are oil companies.
-What will come out of OPEC’s June 2 meeting ?
-Brexit – June 23 ?
-What about the November election ???
Small wonder we are seeing extreme volatility.
TODAY
In times of chaos or uncertainty, the market must find a comfort level, one that discounts known and prospective negatives.
That is what is happening now.
Obviously, there are buyers anxious to go in heavy but deterred by the uncertainties. There is enough selling to put a lid on the buyers, but not enough to break the market down.
Yesterday, I said, “If the market is going to break down here, there is a chance of a spike up before it does, giving the bulls one more chance to turn this thing around. That can still happen, but without clarity on the uncertainties, it would be a dangerous rally to chase.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,327; S&P 500:2,027; Nasdaq Comp.:4,683.
RESISTANCE “today”: DJIA:17,621; S&P 500:2,061; Nasdaq Comp.:4,759.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: The Street is beginning to worry about a June bump in interest rates. The FOMC reports its minutes from its meeting tomorrow at 2:00. It matters little what the minutes contain, the Street’s expectation of when a rate increase will take place will fluctuate, especially in face of conflicting commentary by Fed officials out on the speakers’ circuit.
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Bulls Absolutely Must Step IN Now….or else

Investor’s first read – Daily edge before the open
DJIA: 17,529
S&P 500:2,047
Nasdaq Comp.:4,715
Russell 2000: 1,097
Wednesday, May 18, 2016 9:01 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The market took a hit yesterday after two Fed officials, Atlanta Fed’s Dennis Lockhart and San Fran Fed’s John Williams implied the market was “underestimating” Fed plans to bump rates. Both are non-voting members and should not speculate on what the Fed plans to do. Traders price the odds of a June rate hike at 19%, a July hike is at 36% – Silly !
Another driver of concern for a near-term rate hike was a jump in April’s CPI. It rose 0.4% in face of an 8.1% jump in gas prices. Core CPI (excl. food and energy) increased 0.2%, in line with expectations. The year/year increase was 1.0%, well below the Fed’s 2% target.
Oil was up yesterday, but the market was down. At some point here, the market will march to a different drummer.
TODAY:
The Street is in a quandary, it really doesn’t know what to do, as evidenced by the back-to-back sharp moves up then down.
The bears look to a “pricey” valuation of equities and a market that has risen 200% in seven years. The bulls are betting on an earnings rebound in 2017 and the fact there is nowhere else to put one’s money for a chance of a return.
There is enough of a chance of one of those vertical free-falls, that investors should have a sizable cash reserve.
If it doesn’t happen, there will be plenty of opportunities to get back in.
If the market is going to break down here, there is a chance of a spike up before it does, giving the bulls one more chance to turn this thing around.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,392; S&P 500:2,033; Nasdaq Comp.:4,681.
RESISTANCE “today”: DJIA:17,585; S&P 500:2,061; Nasdaq Comp.:4,729.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: The Street is beginning to worry about a June bump in interest rates. The FOMC reports its minutes from its meeting tomorrow at 2:00. It matters little what the minutes contain, the Street’s expectation of when a rate increase will take place will fluctuate, especially in face of conflicting commentary by Fed officials out on the speakers’ circuit.
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Oil: Crude oil hit a seven-month high after Goldman Sachs analysts forecast $50 oil later in the year.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.

Burden of Proof Still on Bulls

Investor’s first read – Daily edge before the open
DJIA: 17,760
S&P 500:2,066
Nasdaq Comp.:4,775
Russell 2000: 1,116
Tuesday, May 17, 2016 8:44 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
The bulls stepped in to head off a break down through support levels yesterday, though the buying was more in response to a surge in oil prices and relief abroad that a poll showed it was likely the U.K. would not exit the European Union.
Worth repeating – One big buyer appears to have backed off. According to Birinyi Associates, corporate buy backs have dropped sharply. After repurchasing trillions of dollars of their own stock over the last five years, repurchases have slipped 38 percent in the last four months, the biggest decline since 2009 (when they should have been buying !).
Wouldn’t the economy have been better served if some of that money was spent on R&D, employee training and plant and equipment upgrade ?
Okay, fewer shares outstanding helps the bottom line, but so does future planning. What’s more, the markets opinion of a share’s price varies enormously over time, depending on optimism/pessimism, economies, Fed policy, international events. There is no guarantee slightly higher earnings per share will result in a higher price for a stock. IMHO, not as much as well spent money on the future.
This concerns me. There is a big price to pay for too much focus on short-term curb appeal. Much of a stock’s price is based on forward thinking, what will this stock be fundamentally worth a year from now, three years from now ?
Five days ago, we had a burst of buying, which looked pretty good, but the market ran into a wall the following day with three days of selling.
The bulls stepped in yesterday, but it will take more than one day to reverse a weakening pattern. The bulls must drive the DJIA above 17,934 (S&P 500: 2,084) to gain the edge.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,621; S&P 500:2,056; Nasdaq Comp.:4,744.
RESISTANCE “today”: DJIA:17,834; S&P 500:2,077; Nasdaq Comp.:4,801.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: Shortly, the Street will begin to worry about a June bump in interest rates. The FOMC reports its minutes from its meeting tomorrow at 2:00.
Earnings: Q1 earnings were a smidge better than forecast. Initially, it appeared the Street was relieved, but weakness has been creeping in, suggesting something else is calling the shots – Try uncertainty, something the Street never dealt well with. Political: A big part of that uncertainty has to be political.
Seasonal: Eighth year of two-term presidential cycle usually bad starting April/May. Worst six months of year is historically May 1 to November 1.* Phenom referred to as “Sell in May and Go Away.” The two patterns combined spell trouble. Note: Significant rallies have occurred between May and November, testing the validity of this bromide. No indicator is bullet proof.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
*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.