Testing Important Support Levels

Investor’s first read – Daily edge before the open
DJIA: 17,535
S&P 500:2,046
Nasdaq Comp.:4,717
Russell 2000: 1,102
Monday, May 16, 2016 9:14 a.m.
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TODAY
Since Q1 earnings were released, the market has been drifting lower and is now threatening to break down through some serious technical supports. The lower prices that have ensued should attract buyers in a normal bullish setting.
That may yet happen, but it is beginning to look ugly. Bulls must step in or selling will intensify, triggering a nasty correction.
The DJIA broke minor support Friday, but the S&P 500 and Nasdaq Comp. did not follow suit.
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 !).
SUPPORT “today”: DJIA:17,417; S&P 500:2,033; Nasdaq Comp.:4,685.
RESISTANCE “today”: DJIA:17,558; S&P 500:2.055; Nasdaq Comp.:4,739.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: Shortly, the Street will begin to worry about a June bump in interest rates. They won’t get much help from the Fed, which will continue its parade of officials offering reasons why and why not. Thank you very much !
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
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Retail Sales Up 1.3% – Market Ho-Hum ???

Investor’s first read – Daily edge before the open
DJIA: 17,720
S&P 500:2,064
Nasdaq Comp.:4,737
Russell 2000: 1,108
Friday, May 13, 2016 9:11 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wide swings in both directions indicates indecision and the potential for a breakout move when the tug of war between bulls and bears is resolved.
April retail sales reported this morning jumped 1.3 percent versus a paltry 0.3 percent in March, a good sign. Futures trading responded with a move from negative to marginally positive, then slipping back into negative territory.
Stepping way back to look at the big picture, the market has been trading is a wide horizontal band ( DJIA 18,350 – 15,500; S&P 500: 2,130 – 1,850) for two years. It is now trading in the upper end of that band suggesting downside risk unless it breaks out on the upside which in a presidential election year is doubtful.
Easy does it !
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: Reportedly, a disappointing jobs report last Friday with new hires hitting 160,000 vs. expected 200,000, takes a June bump in rates off the table. The Fed
is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news. Normally the Fed gooses the market in the early stages of a bull market when investors are struggling to believe a recovery is for real. But to do this in the later stages of a bull market, especially one that has risen 200%, is fundamentally pricey, and is vulnerable puts investors at risk – big risk. Assured the Fed is there to prop the market, investors are tempted to go all-in at what may be shortly before a correction begins.
Earnings: Q1 earnings a smidge better than forecast, which may be one reason for Friday’s rebound. The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting.
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.
TODAY
A big jump in April retail sales should have had a bigger impact on pre-market futures trading. The market should find support at the levels noted below, then attempt to rally. That rally would give us a good read on the health of this market. Failure to gain traction suggests the market is headed lower. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,671; S&P 500:2,058; Nasdaq Comp.:4,721. Breaking that, look for DJIA: 17,597; S&P 500: 2,047; Nasdaq Comp.: 4,691.
RESISTANCE “today”: DJIA:17,749; S&P 500:2,074; Nasdaq Comp.:4,771.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

BIG,BIG Test for the Bulls

Investor’s first read – Daily edge before the open
DJIA: 17,711
S&P 500:2,064
Nasdaq Comp. :4,760
Russell 2000: 1,114
Thursday, May 12, 2016 8:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The DJIA up 222 points Tuesday then down 217 Wednesday ! That was ugly and a nasty setback for the bulls who should have been able to extend the rally a few more days.
A report by the International Energy Agency (IEA) projecting a decrease in the future global supply surplus of oil triggered a bounce in oil and other stocks overnight with pre-open futures indicating a rebound at the opening bell today.
The market has responded positively to increases in oil prices in recent months, mostly because higher prices would pump up the earnings reports of oil companies and related industries and consequently S&P 500 earnings.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: Reportedly, a disappointing jobs report Friday with new hires hitting 160,000 vs. expected 200,000, takes a June bump in rates off the table. The Fed
is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: Q1 earnings a smidge better than forecast, which may be one reason for Friday’s rebound. The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting – .
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.
TODAY
We are now in a whipsaw market, hotly contested by bulls and bears with a resolution up or down not far off.
The bulls are charging at the open, but MUST follow through. Yesterday’s sell off should not have been able to happen in a strong market. Technical damage was done yesterday and must be repaired today. A rally failure would lead to a slide, maybe a big one.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,621; S&P 500:2,047; Nasdaq Comp.:4,717
RESISTANCE “today”: DJIA:18,801; S&P 500:2,076; Nasdaq Comp.:4,784.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Q1 Earnings (-7.5%) Better Than Expected

Investor’s first read – Daily edge before the open
DJIA: 17,928
S&P 500:2,084
Nasdaq Comp4,809.:
Russell 2000: 1,128
Wednesday, May 11, 2016 9:10 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The absence of any chilling negatives following an orderly six day consolidation lifted overhead supply enough to enable a better than expected rally yesterday, and pave the way for an attempt to beat April’s highs (DJIA: 18,167; S&P 500: 2,111).
The Fed: Reportedly, a disappointing jobs report Friday with new hires hitting 160,000 vs. expected 200,000, takes a June bump in rates off the table. The Fed
is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: Q1 earnings a smidge better than forecast, which may be one reason for Friday’s rebound. The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting – .
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.
TODAY
Yesterday’s sharp rally may have been “technical” after a slo-mo slide since April 20. More than likely, it was more fundamentally based as Q1 earnings have come in better than expected. The Street was expecting Q1 earnings to drop more than 8.5%, when in fact it looks like the decline will only be closer to 7.5%. All this suggests 2016 won’t be as bad as originally thought, increasing 2017 will post an increase of close to 14%. This change of heart could add more upside. That should happen now, or yesterday’s rally is suspect.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,863; S&P 500:2,074; Nasdaq Comp.:4,781
RESISTANCE “today”: DJIA:18,006; S&P 500:2,096; Nasdaq Comp.:4,846.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Rally Must Gain Traction

Investor’s first read – Daily edge before the open
DJIA: 17,705
S&P 500:2,058
Nasdaq Comp.:4,750
Russell 2000: 1,118
Tuesday, May 10, 2016 9:10 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The market is in limbo here – the bears held an edge since April 24, now the bulls are taking their cuts, with the likelihood they’ll push the DJIA up close to 18,000 and the S&P 500 across 2,090.
Money managers and investors are in a dilemma. Problems and uncertainties are well known, yet not discounted enough in the market to ensure against a plunge in prices.
Memories of the worst January on record and a flash crash last August remind investors how quickly a portfolio can be ravaged. Fortunately, offsetting rebounds recouped most of the losses.
The Fed: Reportedly, a disappointing jobs report Friday with new hires hitting 160,000 vs. expected 200,000, takes a June bump in rates off the table. The Fed
is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: Q1 earnings a smidge better than forecast, which may be one reason for Friday’s rebound. The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting – .
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.
TODAY
The markets stabilized Friday, and are trying to rebound. The majority of the blue chip 30 Dow industrials are up prior to the open, suggesting a good day.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,598; S&P 500:2,045; Nasdaq Comp.:4,711. The market should hold its gain today. A slip to negative numbers should find support at these levels.
RESISTANCE “today”: DJIA:17,831; S&P 500:2,073; Nasdaq Comp.:4,787.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 “Must” Get Something Going Soon

Investor’s first read – Daily edge before the open
DJIA: 17,740
S&P 500:2,057
Nasdaq Comp.:4,736
Russell 2000: 1,114
Monday, May 9, 2016 9:10 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Fed: Reportedly, a disappointing jobs report Friday with new hires hitting 160,000 vs. expected 200,000, takes a June bump in rates off the table. The Fed
is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: Q1 earnings a smidge better than forecast, which may be one reason for Friday’s rebound. The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting – .
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.
TODAY
It looks like the correction I expected to start in April started on April 20 with intraday highs of DJIA 18,167, S&P 500: 2,111, and Nasdaq Comp. 4,969.
Those levels could be tested by a rally that started Friday after a weak jobs report suggested a low probability the Fed will bump rates at its June 13-14 FOMC meeting. (no meeting in May).
Earnings comparisons with the year-ago quarter should be easier to top going forward, but guidance and the Street’s projections cannot get hit with new downward revisions without consequences.
Pre-market trading gives bulls a tiny edge. Failure to move up sharply at the open would be followed by a test of Friday’s lows. The bulls can be expected to step in at support listed below.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,687; S&P 500:2,051; Nasdaq Comp.:4,717. These levels must hold or down leg likely.
RESISTANCE “today”: DJIA: 17,793; S&P 500:2,066; Nasdaq Comp.: 4,751;
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Another Critical Test for Bulls

Investor’s first read – Daily edge before the open
DJIA: 17,750
S&P 500:2,063
Nasdaq Comp.:4,763
Russell 2000: 1,121
Wednesday, May 4, 2016 7:24 a.m.
NOTE: There will not be a post here Thursday or Friday. Wednesday will be released early without benefit of breaking news just before the open.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
We have entered a seasonally unfriendly six months period with the S&P 500 up 14% in 10 weeks.
Yesterday, April’s PMI mfg. report was mixed and ISM mfg. Construction Spending for March rose slightly, but February revised up sharply.
Economy: mixed-to-soft. The bear market lead time for recessions is 6 – 12 months, so weakness in the stock market will be a warning that a recession is possible, however not guaranteed. The ADP Employment report comes at 8:15 a.m. today and Employment Situation report Friday at 8:30).
The Fed: is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting.
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.
TODAY
My support levels for yesterday’s market held, but they will be tested again today. The bulls need a sharp selling climax followed by a sharp rebound to reverse what looks like the beginning of a slide in prices.
There have been buyers on weakness since February. While that will continue, sellers may get the upper hand.
There is merit to the bromide, “Sell in May and go away,” a projected six month period ending on November 1, when the “Best Six Months” for owning stocks kicks in.
It is important to remember that these six month periods are interrupted by counter moves, some significant.
If sellers win this battle, expect the Fed to trot out its minions to try to prop up the market and delay the inevitable. Hmmmm ! a little too caustic ? NO ! A healthy, less dangerous, market is one where free flow of sentiments about the many key factors that should define market value is permitted, not one that is artificially propped up by promises that “all is well – trust us.” Eventually the weight of all the economic, fundamental, monetary, international, political, technical and seasonal factors suppressed by the Fed overwhelms the market and you get a free fall.
I think there is real danger here, enough to warrant a sizable cash position. If the market can stabilize, then buying can be resumed. If it plunges, that cash can be employed at lower prices and investors don’t have to wait months to get back to current levels.
The first May down leg can find some support at
DJIA: 17,297
S&P 500: 2,011
Nasdaq Comp. 4,707
Beyond that, look for:
DJIA: 16,397
S&P 500: 1,909
Nasdaq Comp.:4,451.
Technical rallies will intervene. A bear market would develop if new negatives hit the market when it is down enough to attract serious buying, most likely at the level noted above under “Beyond that, look for.”
As noted Monday, we have “greenstick” fractures in both the economy and stock market, but those are not yet “full” fractures.
This is a huge test for the bulls and the Fed, which has methodically propped up the market allowing negatives to go uncorrected along the way. This is a phony market, I have said so for some time.
I am told by a very savvy source, the pros he monitors cannot make money in this market, and the dilemma of mutual funds and hedge funds is proof of that.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,687; S&P 500:2,057; Nasdaq Comp.:4,747. This is a key level.
RESISTANCE “today”: DJIA: 17,826; S&P 500:2,073 ; Nasdaq Comp.: 4,782;
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Huge Technical Test for Bull Market

Investor’s first read – Daily edge before the open
DJIA: 17,891
S&P 500:2,081
Nasdaq Comp.:4,817
Russell 2000: 1,140
Tuesday, May 3, 2016 9:08 a.m.
NOTE: There will not be a post here Thursday or Friday
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
We are entering a seasonally unfriendly six months period with the S&P 500 up 14% in 10 weeks. This will be a big week for economic indicators, which hopefully will shed more light on whether the economy is weakening after last weeks dismal Q1 GDP report.
Yesterday, April’s PMI mfg. report was mixed and ISM mfg. Construction Spending for March rose slightly, but February revised up sharply. The ADP Employment report comes at 8:15 a.m. Wednesday and Employment Situation report Friday at 8:30).
Economy: mixed-to-soft. The bear market lead time for recessions is 6 – 12 months, so weakness in the stock market will be a warning that a recession is possible, however not guaranteed.
The Fed: is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting.
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.
TODAY
Yesterday’s rally was expected here, but technically normal as institutional investors are buying dips and picking up yield stocks.
Today, is a different story, indicating sellers are increasing to counter the automatic, programmed buying.
If sellers win this battle, expect the Fed to trot out its minions to try to prop up the market and delay the inevitable. Hmmmm ! a little too caustic ? NO ! A healthy, less dangerous, market is one where free flow of sentiments about the many key factors that should define market value is permitted, not one that is artificially propped up by promises that “all is well – trust us.” Eventually the weight of all the economic, fundamental, monetary, international, political, technical and seasonal factors suppressed by the Fed overwhelms the market and you get a free fall.
We are now in the ratcheting phase of a market that is trying to decide which way to go – UP or DOWN ?
I think there is real danger here, enough to warrant a sizable cash position. If the market can stabilize, then buying can be resumed. If it plunges, that cash can be employed at lower prices and investors don’t have to wait months to get back to current levels.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,687; S&P 500:2,058; Nasdaq Comp.:4,767. This is a key level. A break below these levels does serious technical damage.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Greenstick Fractures – Market, Economy

Investor’s first read – Daily edge before the open
DJIA: 17,773
S&P 500:2,065
Nasdaq Comp.:4,775
Russell 2000: 1,130
Monday, May 2, 2016 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
We are entering a seasonally unfriendly six months period with the S&P 500 up 14% in 10 weeks. This will be a big week for economic indicators, which hopefully will shed more light on whether the economy is weakening after last weeks dismal Q1 GDP report.
Today, we get the PMI mfg. report (9:45 a.m.), ISM mfg. report and Construction Spending (10:00 a.m.). The ADP Employment report comes at 8:15 a.m. Wednesday and Employment Situation report Friday at 8:30).
Economy: mixed-to-soft. The bear market lead time for recessions is 6 – 12 months.
The Fed: is micromanaging the price level of market too much, allowing a buildup of uncorrected negatives, increasing risk of sharp plunge triggered by unexpected news.
Earnings: The Street is betting on a sharp earnings rebound in Q4 and especially 2017 (+14%). P/Es are above historic norm, so there is no room for disappointment.
Political: Uncertainty mounting.
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.
TODAY
Nasdaq stocks took a shellacking last week, breaking down below some important support levels, led by Apple (AAPL), down 12% after disappointing results and weak iPhone sales..
There is still a strong willingness for buying on dips, so traders will be buying battered tech stocks for a trade. Rallies in tech stocks are suspect. Nimble traders only.
There is that outside chance of one more rally before a correction begins. With fixed income yields so low, investors are buying yield stocks, which are now becoming priced above historic norms.
A bear market ?? No, just a painful correction. However, new negatives along the way could set up a bear market.
We are dealing with a greenstick fracture in both the market and economy. Watch rallies for a clue to underlying strength or weakness. Rally failure would be a major red flag.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,702; S&P 500:2,056; Nasdaq Comp.:4,758.
RESISTANCE “today”: DJIA:17,853; S&P 500:2,077; Nasdaq Comp.:4,796.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of Apr. 28, 2016, a reasonable risk is 17,661 a more extreme risk is 17,374. Near-term upside potential is 18,039.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORRECTIONS IN SPRING LAST SIX YEARS
The S&P 500 is in its 8th year of a bull market, selling at 17.8 X earnings, only 2.5% off its all-time highs, after a 212% bull rise.
Corrections started in spring in each of the last six years, the biggest being 19.8% in 2011, and smallest 2.3% in 2,014.
They started: 2010 (Apr. 26), 2011(May 2), 2012 (May 1), 2013 (May 22), 2014 ( May 13), 2 015 (May 15). The 2014 correction was insignificant, the 2015 more of a trading peak that trended sideways-to-down before the August flash crash.
So far, Q1 earnings are mixed-to-slightly better than projected. The key will be guidance and projections for Q3 and Q4.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – but vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 25% – 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*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.