Yellen’s “New Normal” – Bullish ?

Investor’s first read – Daily edge before the open
DJIA: 17,640
S&P 500: 2,071
Nasdaq Comp.:4,834
Russell 2000:1,149
Thursday, June 16, 2016 9:08 a.m.
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Admitting Brexit contributed to the Fed’s decision, Fed Chief Janet Yellen added, rates may be depressed by “Factors that are not going to be rapidly disappearing, but will be part of the new normal.”
What ? No more rate increases ? No more angst ahead of FOMC meetings ? That should trigger a stampede of buying.
Maybe not. The message here could be that the Fed does not expect a pick up in the economy any time soon, which means stocks are pricey at these levels.
For now, Brexit is center stage with a stay or leave vote taking place on Thursday, June 23. Polls show the leave vote gaining traction.
A leave vote would have global consequences here and abroad, Yellen said yesterday, and pre-market futures trading this morning suggests fear of that possibility is beginning to impact Wall Street.
The other side of that coin is the possibility that the Brits will stay, in which case we can expect a very sharp rally.
It appears it would take a major resurgence in economic growth to justify an increase in rates at this point.
That can happen, but it is not likely, since the current economic expansion is getting up in years. At 87 months, it is the 4th longest since World War II.
At some point the uncertainty surrounding the November elections will send some to the sidelines and cause others to defer purchase.
TODAY
Down at the open. Rallies before next Thursday’s Brexit vote will be short lived.
The bulls can only hope the Street is heartened by Yellen’s vague assurance not to expect rate increases anytime soon. Otherwise the stock market will drop to a level that discounts uncertainties here and abroad.
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SUPPORT “today”: DJIA:17,476; S&P 500:2,051; Nasdaq Comp.:4,781.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.Support here is being tested.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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.

Uncertainty Rules

Investor’s first read – Daily edge before the open
DJIA: 17,674
S&P 500: 2,075
Nasdaq Comp.:4,843
Russell 2000:1,147
Wednesday, June 15, 2016 9:03 a.m.
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The FOMC will announce its decision on rates at 2:00 p.m. today, more importantly, Fed Chief Janet Yellen will hold a news conference at 2:30.
No one expects a rate increase even though Yellen hinted at one as recently as May 27. Expect vague references to a rate increase in the future, and conflicting opinions from Fed Governors in weeks to come.
If the Brits decide to stay in the EU on June 23, and the US economy gains traction, a rate increase will be possible in September, but then we’re getting pretty close to Election Day.
Our economic recovery is long in the tooth. At 87 months, it is the 4th longest since World War II. This bull market, which started in March 2009, is now the 2nd longest since 1932, eclipsed only by the 1990 – 1998 bull market which lasted 93 months.
That in itself is no reason to bail out, but is good reason to sit close to the exit.
Blue chips with an attractive yield stand to attract investors seeking some semblance of a return, and that may be a reason there are buyers on weakness.
A yield is nice, but a poorly timed purchase can result in a paper loss, offsetting the benefits of a taxed dividend. Then too, the price of a stock is automatically reduced when a stock goes ex-dividend – no free lunch.
This is an endorsement for the “timing” of purchases, an art that has been upstaged by the Street’s reliance on algos.
TODAY
The bulls held the line yesterday, but most likely that was in anticipation of a Fed announcement today that it won’t increase rates.
Then too, some traders may be buying in anticipation of an expected positive outcome of Brexit vote on the 23d.
Yesterday’s rebound from a sharp sell off should find resistance in coming days at DJIA 17,776 (S&P 500: 2,087). Beyond that, the market needs some positive news.
At some point the uncertainty surrounding the November elections will send some to the sidelines and cause others to defer purchase.
The burden of proof is on the bulls. Failure to hold the line at these levels paves the way for a correction that will struggle to find a bottom in September/October.
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SUPPORT “today”: DJIA:17,330; S&P 500:2,069; Nasdaq Comp.:4,828.
RESISTANCE :today”: DJIA:17,721; S&P 500:2,081; Nasdaq Comp.:.4,858.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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.

Odds of a Major Correction Increasing

Investor’s first read – Daily edge before the open
DJIA: 17,732
S&P 500: 2,079
Nasdaq Comp.4,848:
Russell 2000:1,150
Tuesday, June 14, 2016 9:03 a.m.
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The FOMC meets this week with a Fed Chief Yellen press conference at 2:30 tomorrow. The rate increase that Yellen hinted may occur as recently as May 27 is no longer expected with concerns now shifted to the economy and Brexit on the 23d.
The retail sales report at 8:30 showed a gain of 0.5 pct. in May, but the Redbook were not available in time for this post. Retail sales are becoming more and more important, due to the closing of a lot of mall stores, such as Ralph Lauren, Macy’s, Barnes & Noble, Sears, Staples, Gap, and Wal-Mart.
The trend in motor vehicle sales will become more and more important going forward after a 6.1% drop in May.
TODAY
The markets took a hit Friday and yesterday, a sign of rally fatigue and jitters about the economy here and abroad and the Brexit June 23.
My “Last rally before a plunge” that started May 19 is now in a correction phase where only a powerful rebound can keep it from turning into the plunge I have been expecting.
The market is faced with two major negatives and several smaller potential negatives. One, the FOMC announcement about interest rates at 2:00 tomorrow, but more importantly Fed Chief Janet Yellen’s comments at her press conference at 2:30. The Street is most interested in what she will say about a rate increase July 26.
Two, the Brits decision to leave or stay in the EU (Brexit) Thursday, June 23.
I don’t expect much from Yellen, and I would be surprised if the Brits exit the EU. Recent polls are showing more are more support for exiting, so expect angst until we know for sure.
Expect a rebound if the Brits “stay.”
Other issues of significance include auto and retail sales and the election.
The burden of proof is now squarely on the bulls. Failure to hold the line here paves the way for a correction that will struggle to find a bottom in September/October.

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SUPPORT “today”: DJIA:17,563; S&P 500:2,057; Nasdaq Comp.:4,786
RESISTANCE :today”: DJIA:17,796; S&P 500:2,087; Nasdaq Comp.:4,867.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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 in Trouble – Bulls Must Step Up

Investor’s first read – Daily edge before the open
DJIA: 17,865
S&P 500: 2,096
Nasdaq Comp.:4,894
Russell 2000:1,163
Monday, June 13, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The FOMC meets this week with a Fed Chief Yellen press conference at 2:30 Wednesday. The rate increase that Yellen hinted may occur as recently as May 27 is no longer expected with concerns now shifted to the economy and Brexit on the 23d.
The retail sales report at 8:30 and Redbook at 8:55 tomorrow should get a close look, since mall stores are coming up short with closings at Ralph Lauren, Macy’s, Barnes & Noble, Sears, Staples, Gap, and Wal-Mart.
The trend in motor vehicle sales will become more and more important going forward after a 6.1% drop in May.
TODAY
The markets took a hit Friday, a sign of rally fatigue and jitters about the economy here and abroad and the Brexit June 23.
My “Last rally before a plunge” that started May 19, should persist until the BIG money walks away, creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
It’s too early to tell, most Dow stocks will open lower.
In spite of Friday’s hit, it is remotely possible this rally will push to all-time highs (DJIA: 18,351, S&P 500:2,134, Nasdaq Comp.: 5,231), which would attract a lot of press and frantic buying.
That would give the BIG money a chance to unload huge positions without hammering the price of stocks.
Either way, there is risk here.
The bulls need a rebound in auto sales and new hires to assure them that the economy is not in the early stages of a slump and possibly a recession in 2017.
That, combined with a Brexit vote to stay, would keep the bull market alive.
Fundamentally, the market is overpriced now, and VERY overpriced if a recession is in the cards for 2017.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,743; S&P 500:2,082; Nasdaq Comp.:4,860.
RESISTANCE :today”: DJIA:17,906; S&P 500:2,099 ; Nasdaq Comp.: 4,911.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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 Fatigue ? BIG Money Pulling Plug ?

Investor’s first read – Daily edge before the open
DJIA: 17,985
S&P 500: 2,115
Nasdaq Comp.:4,958
Russell 2000:1,181
Friday, June 10, 2016 8:56 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
Some signs of fatigue setting in – careful with this one !
My “Last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
Of course, it is possible this rally will push to all-time highs (DJIA: 18,351, S&P 500:2,134, Nasdaq Comp.: 5,231), which would attract a lot of press and frantic buying.
That would give the BIG money a chance to unload huge positions without hammering the price of stocks.
Either way, there is risk here.
The bulls need a rebound in auto sales and new hires to assure them that the economy is not in the early stages of a slump and possible a recession in 2017.
Fundamentally, the market is overpriced now, and VERY overpriced if a recession is in the cards for 2017.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,847; S&P 500:2,099; Nasdaq Comp.:4,923.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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.

Easy Does It !

Investor’s first read – Daily edge before the open
DJIA: 18,005
S&P 500: 2,119
Nasdaq Comp.:4,974
Russell 2000:1,188
Thursday, June 9, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
The “last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
Of course, it is possible this rally will push to all-time highs (DJIA: 18,351, S&P 500:2,134, Nasdaq Comp.: 5,231), which would attract a lot of press and frantic buying.
It would only take a 1.92% move by the DJIA and 0.71% move by the S&P 500 to hit new all-time highs. The Nasdaq needs a 5.17% move to get there
New all-time highs would be accompanied by a lot of press hoopla and a lot of panicky buying. However, the BIG money does not buy that kind of market. It sells it, and it may jump the gun and bail sooner.
The Street has little choice today except to buy. Fixed income offers no attractive alternative with the ten-year treasury yielding 1.72%.
Stocks are the only game in town, as long as they keep rising.
Three things suggest that trek will be difficult. One, they are historically over-priced, with the S&P 500’s P/E a lofty 24.4 vs. a mean of 14.6. Earnings are expected to pick up in Q4, but will have to follow with better numbers in 2017.
Two, signs of weakness are showing up in the economy with auto sales, retail sales, and new hires sliding. While these numbers may be a mere blip in a more positive trend, they are worth concern, especially since the stock market tops out three-to-six months ahead of the beginning of a recession
Three, campaigning for the November elections will get ugly, creating a lot of uncertainty.
Risks are increasing as the market presses higher – take care
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,866; S&P 500:2,104; Nasdaq Comp.:4,939.
RESISTANCE “today”: DJIA:18,113; S&P 500:2,132; Nasdaq Comp.:5,001
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, 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” – Still a Rally

Investor’s first read – Daily edge before the open
DJIA: 17,938
S&P 500: 2,112
Nasdaq Comp.:4,961
Russell 2000:1,179
Wednesday, June 8, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TODAY
The “last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500:2,111).
It would only take a 2.14% move by the DJIA and 1.57% move by the S&P 500 to hit new all-time highs. New all-time highs would be accompanied by a lot of press hoopla and a lot of panicky buying. The BIG money does not buy that kind of market. It sells it.
The Street has little choice today except to buy. Fixed income offers no attractive alternative with the ten-year treasury yielding 1.72%.
Stocks are the only game in town, assuming they go higher.
Three things suggest that trek will be difficult. One, they are historically over-priced, with the S&P 500’s P/E a lofty 24.4 vs. a mean of 14.6. Earnings are expected to pick up in Q4, but will have to follow with better numbers in 2017.
Two, signs of weakness are showing up in the economy with auto sales, retail sales, and new hires sliding. While these numbers may be a mere blip in a more positive trend, they are worth concern, especially since the stock market tops out three-to-six months ahead of the beginning of a recession
Three, campaigning for the November elections will get ugly, creating a lot of uncertainty.
Yes, the rally is still intact, and can press higher, especially if the Fed confirms it will not be raising rates next Wednesday.
Risks are increasing as the market presses higher – take care
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17.841; S&P 500:2,105; Nasdaq Comp.:4,947.
RESISTANCE “today”: DJIA:17,981; S&P 500:2,117; Nasdaq Comp.:4,966.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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. Meeting in Vienna today could change a lot.
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 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 Reverses Fields Yet Again !!

Investor’s first read – Daily edge before the open
DJIA: 17,920
S&P 500: 2,109
Nasdaq Comp.: 4,968
Russell 2000:1,176
Tuesday, June 7, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Fed Chief Janet Yellen made it clear yesterday – she just doesn’t know what to expect, noting she expects to raise rates only gradually over time, a shift from her May 27 position that a move was probable in coming months.
She quickly reversed fields after Friday’s Employment Situation report which showed a paltry gain of 38,000 new hires versus projections of upwards of 180,000.
The Street opted to ignore the bad news on hires by buying on the news there would not be a rate hike this month, maybe not this year.
Soooo, the Street is still zoned in on “bad news is good news,” and will likely continue thinking that way until bad news is so bad the Street has to be more realistic. Strange stuff !
If the Street were not so Fed-focused, it would have done some selling Friday on the bad jobs report, simply because we may be looking at a recession next year. If that happens, this market is way overpriced. The Street did not adjust for that possibility, but will if a recession becomes more real, ergo – a plunge in prices.
I think we would be better served if one person spoke for the Fed with a policy decision announced at the FOMC meeting. Simply put a muzzle on the Fed Governors and let the announcement come out of the FOMC meeting. That way investors are not jerked first in one direction by a Fed Governor speaking on the East Coast, then by a Governor saying something different on the West Coast.
This is why many call this “most hated bull market ever,” and why I call it just a phony market. It’s all about the Fed with little thought to anything else.
TODAY
That said, the “last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500:2,111).
It would only take a 2.14% move by the DJIA and 1.57% move by the S&P 500 to hit new all-time highs. New all-time highs would be accompanied by a lot of press hoopla and a lot of panicky buying. The BIG money does not buy that kind of market. It sells it.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,866; S&P 500:2,103; Nasdaq Comp.:4,953.
RESISTANCE “today”: DJIA:18,036; S&P 500:2,122; Nasdaq Comp.:5,001.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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. Meeting in Vienna today could change a lot.
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 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.

Investor’s first read – Daily edge before the open
DJIA: 17,920
S&P 500: 2,109
Nasdaq Comp.: 4,968
Russell 2000:1,176
Tuesday, June 7, 2016 9:03 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Fed Chief Janet Yellen made it clear yesterday – she just doesn’t know what to expect, noting she expects to raise rates only gradually over time, a shift from her May 27 position that a move was probable in coming months.
She quickly reversed fields after Friday’s Employment Situation report which showed a paltry gain of 38,000 new hires versus projections of upwards of 180,000.
The Street opted to ignore the bad news on hires by buying on the news there would not be a rate hike this month, maybe not this year.
Soooo, the Street is still zoned in on “bad news is good news,” and will likely continue thinking that way until bad news is so bad the Street has to be more realistic. Strange stuff !
If the Street were not so Fed-focused, it would have done some selling Friday on the bad jobs report, simply because we may be looking at a recession next year. If that happens, this market is way overpriced. The Street did not adjust for that possibility, but will if a recession becomes more real, ergo – a plunge in prices.
I think we would be better served if one person spoke for the Fed with a policy decision announced at the FOMC meeting. Simply put a muzzle on the Fed Governors and let the announcement come out of the FOMC meeting. That way investors are not jerked first in one direction by a Fed Governor speaking on the East Coast, then by a Governor saying something different on the West Coast.
This is why many call this “most hated bull market ever,” and why I call it just a phony market. It’s all about the Fed with little thought to anything else.
TODAY
That said, the “last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
We will know it when they do – like pulling a plug in a full bathtub.
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500:2,111).
It would only take a 2.14% move by the DJIA and 1.57% move by the S&P 500 to hit new all-time highs. New all-time highs would be accompanied by a lot of press hoopla and a lot of panicky buying. The BIG money does not buy that kind of market. It sells it.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,866; S&P 500:2,103; Nasdaq Comp.:4,953.
RESISTANCE “today”: DJIA:18,036; S&P 500:2,122; Nasdaq Comp.:5,001.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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. Meeting in Vienna today could change a lot.
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 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.

Yellen – More Double Talk ?

Investor’s first read – Daily edge before the open
DJIA: 17,807
S&P 500: 2,099
Nasdaq Comp.4,942:
Russell 2000: 1,164
Monday, June 6, 2016 8:47 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday’s shockingly poor payrolls report pretty much rules out a bump in the federal funds rate June 15.
A better feel for that outcome should be gained when Fed Chief Janet Yellen speaks today at 12:30.
The Street was resigned to a bump in rates before Friday’s report, so today Yellen must do a moonwalk on policy, probably downplay the jobs report and be inconclusive on rates, just enough of a shell game to keep the Street off guard.
The Street buys if it sees the Fed holding on interest rates, and defers purchase or sells if it believes the Fed is going to raise rates.
Knowing the Street will follow its lead, the Fed plays it like a puppeteer intent on micromanaging market swings up and down.
This was justified when the markets and economies were on the verge of a meltdown in 2008 – 2009. I was a big supporter of that.
With the S&P 500 up 200% in 7 years, artificially propping the markets prevents the normal process of adjusting for changing economic news, jobs, slumping auto sales, potential for a recession in 2017, corporate earnings, a divisive election, international economic health, and an overvalued stock market.
The Feds obsession with control stands to set up another one of those free falls like August 2015 and January this year.
If the next free fall is followed by a recession, there will be no bounce back.
This is why many call this “most hated bull market ever,” and why I call it just a phony market.
TODAY
Yellen can be expected to say all the right things today (12:30) to maintain stability.
That said, the “last rally before a plunge” that started May 19, should persist until the BIG money walks away creating a vacuum.
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500:2,111).
It would only take a 2.14% move by the DJIA and 1.57% move by the S&P 500 to hit new all-time highs. New all-time highs would be accompanied by a lot of press hoopla and a lot of panicky buying. The BIG money does not buy that kind of market. It sells it.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way. I think we are getting closer to a big drop. If the BIG money takes a hike, it’s straight down as in January and August. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,706; S&P 500:1,988; Nasdaq Comp.:4,915.
RESISTANCE “today”: DJIA:17,871; S&P 500:2,1o7; Nasdaq Comp.:4,959.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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. Meeting in Vienna today could change a lot.
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 very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 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.

May Auto Sales and Payrolls Slumped

Investor’s first read – Daily edge before the open
DJIA: 17,838
S&P 500: 2,105
Nasdaq Comp.:4,971
Russell 2000: 1,170
Friday, June 3, 2016 9:05 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This was a huge week for economic reports, but with mixed results with the exception of a shocker – Nonfarm Payrolls, up a mere 38,000 vs projections ranging between 145,000 – 190,000. March and April data was revised sharply downward. Ironically the unemployment rate is 4.7 pct..
Good results: Personal Consumption Expenditures and Personal Income, S&P Case Shiller Home Prices
Mixed Results: Consumer Confidence, State Street Investment Confidence, PMI, ISM, Jobless Claims
Bad results: ADP Employment, Chicago PMI Mfg., Dallas Fed Mfg., the Employment Situation report. This report will be followed by PMI Services (9:45), Factory Orders and ISM Non-Mfg. at 10:00.
Fed Chief Janet Yellen spoke last 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.
Now what ? Can the Fed raise rates with this data.
The Street is currently pondering other 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 (ho-hum)
– FOMC’s meeting June 15. Can it raise rates in face of the payroll data, slumping auto sales ?
– 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 recession was 54 months.
– Little attention has been given to the drag on the economy caused by the Fed’s low interest rate policy. While it is expected to boost lending and consequently business activity, there is little proof it has. Would consumers be bigger buyers if they had a decent return on their savings ? If low interest rates can’t goose an economy, what will it take ? What does this say about global economies, some of which pursue a negative rate policy ? Something is very wrong here, is anybody giving serious thought to it ?
– Sales of cars, trucks and SUVs for May were reported down 6.1%, the biggest monthly drop in six years. This may cap the longest streak since the roaring 1920s and a warning sign for the continuance of the present economic expansion.
-the election. Regardless of outcome – expect polarization beyond belief.
TODAY
The “rally” that started May 19, is still intact (barely). That trend can continue if the Street sees weak economic data as a reason the Fed won’t raise rates this month ?
Or will the Street begin to fear a recession ?
There is an outside chance that this rally will punch briefly to new 2016 highs (DJIA: 18,167, S&P 500:2,111).
It is hard to ignore the potential overhead supply that exists at these levels, but the computers are programmed to buy, until they are programmed pull the plug and say “stop buying”, even “SELL”. This is clearly seen in a two-year chart.
Investors have to let their tolerance for risk be their guide and not let fear or greed get in the way. I think we are getting closer to a big drop. If the BIG money takes a hike, it’s straight down as in January and August.
Little thought has been given to a recession – the Street is so obsessed with the Fed. Bear markets begin 3 to 6 months ahead of recessions.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:17,676; S&P 500:2,086; Nasdaq Comp.:4,926.
RESISTANCE “today”: DJIA:17,901; S&P 500:2,110; Nasdaq Comp.:4,987.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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. Meeting in Vienna today could change a lot.
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.
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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.
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 STATUS OF MARKET: Neutral – but very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q1, and 2016 earnings questionable. Fed has market under its spell.
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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Stock Trader’s Almanac
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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.