Boom or Bust ? Ask Congress

Investor’s first read – Daily edge before the open
DJIA: 19,819
S&P 500: 2,249
Nasdaq Com.: 5,432
Russell 2000:1,363
Friday, December 30, 2016 9:06 a.m.
Hope 2017 Treats You Well
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The Street is hoping for another leg up in stock prices on top of a 238% bull market gain, which can happen in face of tax cuts, deregulation and a big spend on the military and infrastructure.
Expectations are driving the bull’s hopes. Reality may bring everything to fruition, or dash hopes. As long as the Street does not know the answer, the bulls have a shot at that up leg.
Mr. Trump is a Republican, yet he trashed all leading Republicans in the primaries. This is his brand of the Republican Party. If that doesn’t sit well with all the rest of the Republican Party, there may be opposition to his goals along with the Democrats.
That’s the big unknown. That’s the difference between a flat 2017 and a 20% gainer.
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TECHNICAL
It will be good to put all this year-end mishmash behind us today. There will be tax selling next year and institutional portfolio window dressing, but the institutions will come out of the on deck circle to take their cuts.
Let’s not overlook the Fed. IMHO, they are control freaks and we will see a parade of its Governors and Fed bank presidents pitching their preferences for one, two, or three rate increases this year.
A strong economy and buoyant stock market should be able to overrun the Fed-speak and action until a third rate hike.
No one is looking for a sudden downdraft in prices starting in January, which is a good reason to give it a 40% chance. It just can’t be this easy to make money. Darts anyone ?
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SUPPORT “today”: DJIA:19,798;S&P 500:2,252; Nasdaq Comp.:5,443
RESISTANCE “today”:DJIA:19,863;S&P 500:2,254; Nasdaq Comp.:5,453 ;
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
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 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
……………………………………………………………………
*The Fiscal Times – 12/22/16 – Eric Pianin
…………………………………………………………………….
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.

Everyone Is Bullish ????????????????????????????

Investor’s first read – Daily edge before the open
DJIA: 19,833
S&P 500: 2,249
Nasdaq Com.: 5,438
Russell 2000:1,360
Thursday, December 29, 2016 9:06 a.m.
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Only one bull market in 56 years has risen more, the 1990 – 1998 dot- com bull with an S&P 500 gain of 304%. So far, this one has logged in a gain of 241%, a gain of 304% would take the S&P 500 to 2,690 (DJIA: 25,820).
That can happen if Congress lets President Trump have his way, AND divisiveness within the U.S. and the U.S. and other nations does not adversely impact consumer confidence (trade war China).
This corporate windfall looks like a slam-dunk. How can it miss ? The Republicans control 4 key areas of the government – the presidency, both houses of Congress, and shortly, the Supreme Court. Cabinet heads support a complete makeover of all departments they control.
How can they miss ?
At times my contrary thinking instincts lead me astray, but investors must entertain the possibility, as remote as it appears, that a lot can go wrong over the next 12 to 18 months. Bad stuff can happen.
The Mid-East came apart at the seams with the invasion of Iraq. Our European and Asian alliances can do the same if mishandled.
A trade war means that a $9 polo shirt can suddenly cost $12, a $550 computer cost $750.
There is a chance the journey from here to a windfall for corporations through tax cuts, deregulation and large expense appropriations could hit obstacles.
Too much overreach carries risk for Republican control of the U.S. Senate in 2018.
The economy is stable with the potential to heat up, which is what logic says it will do as taxes are slashed and big money spent. That can drive the stock market into the stratosphere, an unprecedented orgy of greedy investors chasing stocks worth a fraction of their real value.
The last thing anyone in the Street expects now another Great Recession, meltdown and bear market. Pick ‘em.

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TECHNICAL
Yes, this is year-end activity, a mishmash that makes little sense, since the buying and selling is more a matter of dressing up portfolios and balancing out option/future positions and gains and losses for tax purposes.
A year ago (December 14), I headlined that odds favor a market top in the first week of January and an 8% – 12% correction. The S&P 500 dropped 13% to January 20.
There can be selling pressure in 2016’s big winners in early January as investors defer taking gains until 2017, but it does not look like a wipeout is likely, unless the BIG money is anticipating trouble for Trump’s plans to cut taxes, lift recs. and dump a lot of money into defense and infrastructure projects.
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SUPPORT “today”: DJIA:19,771;S&P 500:2,236; Nasdaq Comp.:5,423
RESISTANCE “today”:DJIA:19,936;S&P 500:2,261; Nasdaq Comp.:5.461 ;
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
……………………………………………………………………
*The Fiscal Times – 12/22/16 – Eric Pianin
…………………………………………………………………….
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.

Okay, How About Dow 20,000 Today ?

Investor’s first read – Daily edge before the open
DJIA: 19,945
S&P 500: 2,268
Nasdaq Com.: 5,487
Russell 2000:1,377
Wednesday, December 28, 2016 9:16 a.m.
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Assuming taxes will be cut, regs lifted and lots of money spent on defense and the infrastructure, the market has room to run.
It is doing so from a solid economic base, one well grounded, but not yet given to excess in spite of its age.
Only one bull market in 56 years has risen more, the 1990 – 1998 bull with an S&P 500 gain of 304%. So far, this one has logged in a gain of 241%, a gain of 304% would take the S&P 500 to 2,690 (DJIA: 25,820).
I am beginning to detect untethered euphoria, investors sensing a chance to make quick and easy money in the market.
Can the DJIA actually reach 25,000 ? If so, what happens to mid-cap stocks, micro-cap stocks? If the S&P 500 has risen 241% already, what is to stop it from adding another 25% ?
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TECHNICAL
The Dow will be getting off to a better start today, increasing the odds that the DJIA will break 20,000 today, a number without any significance other than the fact the press will make a big deal of it, attracting attention of those who have been on the sideline for eight years.
The market wants to run further
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SUPPORT “today”: DJIA:19,927;S&P 500:2,264; Nasdaq Comp.:5,467
RESISTANCE “today”:DJIA:20,017;S&P 500:2,276; Nasdaq Comp.:5,507
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
……………………………………………………………………
*The Fiscal Times – 12/22/16 – Eric Pianin
…………………………………………………………………….
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.

Dow 20,000 Today ?

Investor’s first read – Daily edge before the open
DJIA: 19,933
S&P 500: 2,263
Nasdaq Com.: 5,462
Russell 2000:1,371
Tuesday, December 27, 2016 9:06 a.m.
WISHING YOU A SAFE AND MERRY CHRISTMAS
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When making money in the market begins to get easier and easier, it is very hard for investors to even give thought to the party ending. That’s how normal people think.
That said, make room in that cerebral process for the possibility that 2017 could spring some surprises.
Unlike President Obama who inherited the worst recession/bear market since the 1930s, Donald Trump will inherit a solid economic recovery if long in the tooth.
This means there is room to run for the economy and stock market if corporate and some individual taxes are slashed and a ton of money spent on military expansion and selected infrastructure projects over the next 18 months.
As long as the Street believes this, the stock market can surge to incredible levels of overvaluation, far beyond historic norms.
The stage is set for that to happen.
However, if it becomes obvious (to the insiders) that only a smidgeon of this windfall is going to happen, the market will have to adjust to lower levels.
If these programs hit a wall, it could get ugly.
In a few words, be aware that the stock market always looks best before a correction/bear market. Odds favor another spike in prices going in to the new year with a widely publicized shattering of Dow 20,000, a level that gains credibility only owing to it being a round number.
For now, the fever festers with investors anxious to extend a bull market long-in-the-tooth and up 239%. They sense a bonanza, quick and easy money, and wild speculation in what is perceived as a “new era.”
There is a 40% chance January will feature a sharp correction, especially if the market spikes sharply higher going into the first week in January. Those odds are not enough to bail out, but are enough to be alert for the unexpected.
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TECHNICAL
Without some earth shattering news, the Dow should break 20,000 and run up into year-end. Selling in winners should be delayed until 2017 in hopes of lower taxes.
The list of infrastructure stocks presented here on November 15 is consolidating in a sideways-to-up pattern after a nice run, suggesting confidence that infrastructure companies will see some big spend later next year.
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SUPPORT “today”: DJIA:19,901;S&P 500:2,258; Nasdaq Comp.:5,451
RESISTANCE “today”:DJIA:20,016;S&P 500:2,267; Nasdaq Comp.:5,479
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
……………………………………………………………………
*The Fiscal Times – 12/22/16 – Eric Pianin
…………………………………………………………………….
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.

All is Well, Unless……..

Investor’s first read – Daily edge before the open
DJIA: 19,918
S&P 500: 2,260
Nasdaq Com.: 5,447
Russell 2000:1,262
Friday, December 23, 2016 9:06 a.m.
WISHING YOU A SAFE AND MERRY CHRISTMAS
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WHAT CAN WRONG: The market has soared in face of expectations of tax cuts, deregulation and a big spend on the military and infrastructure starting sometime next year. The market tends to discount potential in advance, but is not always right.
Yesterday, I questioned whether Congress dared oppose any of President Trump’s proposals for fear that individuals will be singled and attacked by tweets or administration officials, a pattern that seems to be the new normal.
If Congress caves, most of the goals referred to above will pass, at least in part.
If the Republican deficit hawks resist, uncertainty about tax cuts, dereg. and the big spend are in question. According to the Associated Press, Senate Majority Leader Mitch McConnell (R-KY) is cool on a $1 trillion stimulus spend on the military and the country’s infrastructure.*
Then too, Trump’s chief of staff to be, Reince Priebus, indicated in a radio interview that the initial focus would be on repealing Obamacare and tax reform with the big spend coming later.
There is also the issue of how all this would impact the $19 trillion national debt. The cut of corporate and personal taxes impacts the inflow of funds to the U.S. government, requiring spending cuts to offset the shortfall. A big spend must be offset somehow, probably in part by private partnerships and tax concessions.
BOTTOM LINE: There is risk of the market getting ahead of the curve here if the new administration hits snags in implementing tax cuts and the approval of its big spending plans.
For now, the fever festers, investors anxious to extend a bull market long-in-the-tooth and up 239%. They sense a bonanza, quick and easy money, and wild speculation in what is perceived as a “new era.”
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TECHNICAL
The market has traded flat for eight days, a normal consolidation considering its big 9.3% run, which actually started before the election.
While it declined two days in a row, it was minimal. Another drop is likely at the open today, and may be more pronounced. There is nothing in the news to convince the Street that tax cuts and a big spend is not on the table next year, so declines will meet buyers. If all that wonderful stuff begins to hit a wall, the market is going south.
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SUPPORT “today”: DJIA:19,860;S&P 500:2,254; Nasdaq Comp.:5,424
RESISTANCE “today”:DJIA:19,965;S&P 500:2,268; Nasdaq Comp.:5,466
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
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iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
……………………………………………………………………
*The Fiscal Times – 12/22/16 – Eric Pianin
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Will Congress Cave to Trump’s Big Spend ?

Investor’s first read – Daily edge before the open
DJIA: 19,941
S&P 500: 2,265
Nasdaq Com.: 5,471
Russell 2000:1,375
Thursday, December 22, 2016 9:06 a.m.
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The driver for this market advance is the expectation that taxes will come down, regulations will be lifted on businesses and a ton of money will be spent on expanding the military and the infrastructure.
For the past six years, Congress has voted against new spending bills, so something will have to change. It will all depend on whether President Trump’s tweets, and pressure from friendly media can intimidate members of Congress to go along with his plans. Sounds absurd, but the “attack/counterattack” mode is Trump’s “m.o.” and he will use it.
If Congress buckles, he will get his way and the stock market will soar. If Congress stands its ground like it did under the Obama administration, the big spend, tax cuts and deregulation will stall, and the stock market will drop to a level that discounts this.
THE SCRAMBLE CONTINUES
And, so the scramble continues as institutions put cash to work, and make strategic portfolio changes. This is a particularly challenging year-end, since so much has been promised after a seven year, nine month, 241% rise in the S&P 500.
Most year-ends are muddled, this one is on fire. Is this the kind of extreme that marks a top ? Everyone is bullish, desperately buying anything that is moving. There’s a BIG spend out there, lower taxes, and those hated regs that cramp creativity will vanish.
More than taking a loss, investors hate to miss a major upmove. We are bordering on panic. The Street seems to think nothing can go wrong, not with so much pie in the sky !
Aside from the market aping the dot-com insanity back in 1998-2000, it will have to be perceived, or definitely known, that taxes won’t be coming down much, if at all, and that Congress won’t authorize a big spend on the infrastructure and military, and that seems unlikely near-term, intermediate-term.
So yes, the Street and individual investors are acting like they do at market tops. They are approaching the “I can’t stand it anymore mode,” opting to go all-in, but until their cookie in the cupboard is taken away from them, their appetite for stocks, any stock so long as it goes up, is ravenous
Once again, human nature is beginning to play out. For those of you with a decent memory, this is becoming the reverse of February/March 2009 when after a 50% plunge in the stock market, no one would think of buying a stock.
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TECHNICAL
This may be the two-day correction I referred to Monday, one that is followed by a rally at year-end. This is normal. Institutions will be scrambling for stocks that will appeal to investors going into the new year and dumping stocks that won’t.
There is a lot of financial press hype about Dow 20,000. In truth, it’s no different than Dow 19,997, but the press loves this stuff. What’s worth noting is the Dow would then be up 3 X its bear market bottom, which is really the big story.
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SUPPORT “today”: DJIA:19,887;S&P 500:2,260; Nasdaq Comp.:5,456
RESISTANCE “today”:DJIA:19,986;S&P 500:2,269; Nasdaq Comp.:5,485
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Panic ! Investors Opting to Go All-In ??

Investor’s first read – Daily edge before the open
DJIA: 19,974
S&P 500: 2,270
Nasdaq Com.: 5,483
Russell 2000:1,383
Wednesday, December 21, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
And, so the scramble continues as institutions put cash to work, and make strategic portfolio changes. This is a particularly challenging year-end, since so much has been promised after a seven year, nine month, 241% rise in the S&P 500.
Most year-ends are muddled, this one is on fire. Is this the kind of extreme that marks a top ? Everyone is bullish, desperately buying anything that is moving. There’s a BIG spend out there, lower taxes, and those hated regs that cramp creativity will vanish.
More than taking a loss, investors hate to miss a major upmove. We are bordering on panic. The Street seems to think nothing can go wrong, not with so much pie in the sky !
Aside from the market aping the dot-com insanity back in 1998-2000, it will have to be perceived, or definitely known, that taxes won’t be coming down much, if at all, and that Congress won’t authorize a big spend on the infrastructure and military, and that seems unlikely near-term, intermediate-term.
So yes, the Street and individual investors are acting like they do at market tops. They are approaching the “I can’t stand it anymore mode,” opting to go all-in, but until their cookie in the cupboard is taken away from them, their appetite for stocks, any stock so long as it goes up, is ravenous
Once again, human nature is beginning to play out. For those of you with a decent memory, this is becoming the reverse of February/March 2009 when no one would think of buying a stock.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
There is a lot of financial press hype about Dow 2000. In truth, it’s no different than Dow 19,997, but the press loves this stuff. What’s worth noting is the Dow would then be up 3 X its bear market bottom.
While the market is historically very overpriced, the Street is hoping earnings will rise to close the gap next year.
A lot of money can be made in this kind of market, and at times the less one knows the better if you don’t mind buying stocks after a big rise in hopes of selling it to someone else who doesn’t mind paying up for it and who expects to do the same until someone catches the high.
All the above is designed to give you a feel for what happens when the market begins to extend into the latter stages of a bull market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,919;S&P 500:2,265; Nasdaq Comp.:5,471
RESISTANCE “today”:DJIA:20,017;S&P 500:2,275; Nasdaq Comp.:5,493
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
YEAR-END OPPORTUNITIES
The post-election surge has overrun the classic year-end activity, a usual mishmash of buying and selling that is driven by tax selling, and in this case a scramble by institutions to dress up portfolios that reflect what could be what appeals to investors going forward.
What does that mean ? Probably more bank stocks than money managers would have owned pre-Trump. And maybe select biotech/ biopharma stocks, though the industry is getting mixed signals with talk of deregulation on the one hand and a crackdown on drug price increases on the other hand. Then too, a portfolio may need an infrastructure play.
That’s called window dressing.
But, a lot of these stocks blew out of the gate immediately after news of Trump’s election. So, it’s back to diligent homework, good judgement, emotional control and an instinct for timing.
Quality stocks that are depressed from their high for the year tend to be under selling pressure at year-end due to tax selling decisions. That offers buyers an opportunity to pick up bargains, the following stock stands to be one of them.
Gilead Sciences (GILD: $74.84), a biopharmaceutical company, is a good example. Down 27% from its April high, Gild bounced $1.84 (2.5%) Tuesday after posting a 2016 low four days ago at $70.83. The buying could be investors looking out to a better year in 2017, or it could be short covering, or a combination of both. The stock sports a number of buy recommendations on the Street.
The post-election up-move of DJIA 8.2%, S&P 500: +5.6%, Nasdaq Comp.: +4.7%, and Russell 2000: +14.1%, is pure speculation on Mr. Trump’s and a Republican Congress’s ability to reduce taxes, lift regs. and spend big on infrastructure and the military.
Anything to delay or thwart those plans will trigger an ugly correction.
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Speculative Fever Will Spread to Micro-caps

Investor’s first read – Daily edge before the open
DJIA: 19,883
S&P 500: 2,262
Nasdaq Com.:5,457
Russell 2000:1,371
Tuesday, December 20, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
If you recently bought a stock and it hasn’t risen with the market, or went down, it may well be that year-end tax selling or institutional portfolio adjustments are holding it down. That may continue into early 2017, as investors sell to put profits into the new year.
It’s just a tough time to get a good read on the market, especially individual stocks.
The Street wants in, and that is driving stocks.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
We didn’t get the beginning of a two day correction yesterday, but don’t be surprised if we do this week or early next week. That would be followed by a rally into year-end.
The Street is betting that taxes will be reduced, regulations lifted, and big money spent starting sometime next year, and there is little that can be said to change its mind.
The perception is big things are going to happen, and no one is going to be left behind. Institutions must get on board, or miss out. While contrary thinkers will be right to go against the market at some point in the future, there just isn’t any tangible information now to say all, or a lot, of these goals won’t be achieved.
What can happen to rock the boat ? An international crisis – maybe. But we have had just about all the crises imaginable and the market plods on.
Bet the ranch time ? NO, not when such a “sure thing” is driving the market. Being right in this business is not easy, when it becomes too easy – look out.
This market is on solid footing without the Trump promises. The economy is picking up, and that will prompt the Fed to increase rates. Tax cuts and big spend will prompt the Fed to raise rates further. At some point the market’s advance will stall.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,861;S&P 500:2,259; Nasdaq Comp.:5,450
RESISTANCE “today”:DJIA:19,956;S&P 500:2,277; Nasdaq Comp.:5,481
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
YEAR-END OPPORTUNITIES
The post-election surge has overrun the classic year-end activity, a usual mishmash of buying and selling that is driven by tax selling, and in this case a scramble by institutions to dress up portfolios that reflect what could be what appeals to investors going forward.
What does that mean ? Probably more bank stocks than money managers would have owned pre-Trump. And maybe select biotech/ biopharma stocks, though the industry is getting mixed signals with talk of deregulation on the one hand and a crackdown on drug price increases on the other hand. Then too, a portfolio may need an infrastructure play.
That’s called window dressing.
But, a lot of these stocks blew out of the gate immediately after news of Trump’s election. So, it’s back to diligent homework, good judgement, emotional control and an instinct for timing.
Quality stocks that are depressed from their high for the year tend to be under selling pressure at year-end due to tax selling decisions. That offers buyers an opportunity to pick up bargains, the following stock stands to be one of them.
Gilead Sciences (GILD: $74.84), a biopharmaceutical company, is a good example. Down 27% from its April high, Gild bounced $1.84 (2.5%) Tuesday after posting a 2016 low four days ago at $70.83. The buying could be investors looking out to a better year in 2017, or it could be short covering, or a combination of both. The stock sports a number of buy recommendations on the Street.
The post-election up-move of DJIA 8.2%, S&P 500: +5.6%, Nasdaq Comp.: +4.7%, and Russell 2000: +14.1%, is pure speculation on Mr. Trump’s and a Republican Congress’s ability to reduce taxes, lift regs. and spend big on infrastructure and the military.
Anything to delay or thwart those plans will trigger an ugly correction.
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Rally After a Two-Day Correction ?

Investor’s first read – Daily edge before the open
DJIA: 19,843
S&P 500: 2,258
Nasdaq Com.:5,437
Russell 2000:1,364
Monday, December 19, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
As noted recently, year-end trading is very inconsistent. Moves up or down are often not reflective of what stocks will do in the new year. Tax selling, or portfolio adjustments by institutions distort a stock’s prospects.
Institutions want their year-end portfolio to look good, to reflect winners, as well as stocks that investors expect to be big winners in the new year. The year-end report will be read by a lot of investors who are looking for a fund to invest in. These portfolios may change a month later as the fund may take profits in the prior year’s big winner.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
Fed Chief Janet Yellen will speak at 1:30 today presumably on the state of the labor market. Again, I would prefer that the Fed would stop micromanaging the market. I am not alone.
If she emphasizes the three rate increases in 2017 that were mentioned in her press conference last Wednesday, the market could drop sharply, since it is up sharply since the election results were announced
(DJIA 8.2%, S&P 500: +5.6%, Nasdaq Comp.: +4.7%, and Russell 2000: +14.1
A quick, sharp correction of a day or two is possible, even probable, and Yellen would be the trigger, but a sharp rebound before year-end would most likely result.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,776;S&P 500:2,249; Nasdaq Comp.:5,401
RESISTANCE “today”:DJIA:19,911;S&P 500:2,268 ; Nasdaq Comp.:5,456
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
YEAR-END OPPORTUNITIES
The post-election surge has overrun the classic year-end activity, a usual mishmash of buying and selling that is driven by tax selling, and in this case a scramble by institutions to dress up portfolios that reflect what could be what appeals to investors going forward.
What does that mean ? Probably more bank stocks than money managers would have owned pre-Trump. And maybe select biotech/ biopharma stocks, though the industry is getting mixed signals with talk of deregulation on the one hand and a crackdown on drug price increases on the other hand. Then too, a portfolio may need an infrastructure play.
That’s called window dressing.
But, a lot of these stocks blew out of the gate immediately after news of Trump’s election. So, it’s back to diligent homework, good judgement, emotional control and an instinct for timing.
Quality stocks that are depressed from their high for the year tend to be under selling pressure at year-end due to tax selling decisions. That offers buyers an opportunity to pick up bargains, the following stock stands to be one of them.
Gilead Sciences (GILD: $74.84), a biopharmaceutical company, is a good example. Down 27% from its April high, Gild bounced $1.84 (2.5%) Tuesday after posting a 2016 low four days ago at $70.83. The buying could be investors looking out to a better year in 2017, or it could be short covering, or a combination of both. The stock sports a number of buy recommendations on the Street.
The post-election up-move of DJIA 8.2%, S&P 500: +5.6%, Nasdaq Comp.: +4.7%, and Russell 2000: +14.1%, is pure speculation on Mr. Trump’s and a Republican Congress’s ability to reduce taxes, lift regs. and spend big on infrastructure and the military.
Anything to delay or thwart those plans will trigger an ugly correction.
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Institutions Scramble to Buy

Investor’s first read – Daily edge before the open
DJIA: 19,852
S&P 500: 2,262
Nasdaq Com.:5,456
Russell 2000:1,366
Friday, December 16, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
YEAR-END OPPORTUNITIES
The post-election surge has overrun the classic year-end activity, a usual mishmash of buying and selling that is driven by tax selling, and in this case a scramble by institutions to dress up portfolios that reflect what could be what appeals to investors going forward.
What does that mean ? Probably more bank stocks than money managers would have owned pre-Trump. And maybe select biotech/ biopharma stocks, though the industry is getting mixed signals with talk of deregulation on the one hand and a crackdown on drug price increases on the other hand. Then too, a portfolio may need an infrastructure play.
That’s called window dressing.
But, a lot of these stocks blew out of the gate immediately after news of Trump’s election. So, it’s back to diligent homework, good judgement, emotional control and an instinct for timing.
Quality stocks that are depressed from their high for the year tend to be under selling pressure at year-end due to tax selling decisions. That offers buyers an opportunity to pick up bargains, the following stock stands to be one of them.
Gilead Sciences (GILD: $74.84), a biopharmaceutical company, is a good example. Down 27% from its April high, Gild bounced $1.84 (2.5%) Tuesday after posting a 2016 low four days ago at $70.83. The buying could be investors looking out to a better year in 2017, or it could be short covering, or a combination of both. The stock sports a number of buy recommendations on the Street.
The post-election up-move of DJIA 8.4%, S&P 500: +5.7%, Nasdaq Comp.: +5.2%, and Russell 2000: +13.8%, is pure speculation on Mr. Trump’s and a Republican Congress’s ability to reduce taxes, lift regs. and spend big on infrastructure and the military.
Anything to delay or thwart those plans will trigger an ugly correction.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
The Fed did as expected, it raised its benchmark rate to a range of 0.5 to 0.75 percent from 0.25 to 0.5 percent.
In recent posts, I noted that the Street pretty much accepted a rate increase, but I went on to warn that they may not be prepared for multiple rate increases in 2017, and to expect retaliation from Trump.
So, is the Fed back in the driver’s seat ?
What this market does not need is more micro-managing by the Fed., but that’s what I am hearing based on Yellen’s comments yesterday. One year ago, the Fed forecast as many as three bumps in its rate for 2016, and we got one. Throughout the year, we heard conflicting comments from its Governors about the timing of a rate increase, which serves to create volatility and a lot of unnecessary uncertainty. Enough ! Let the market trade freely !
We have ten days to go until year-end. Expect a lot of scrambling to buy favored stocks before they are run higher. While some tax selling is taking place now, the bulk of profit-taking will likely take place in 2017, when it is presumed taxes will be more favorable.
The market has run into some headwinds in recent days, but frantic buyers still hold an edge. It is rarely smart to “chase” a rising stock that has already moved up sharply. The fever launched after the election makes it difficult to wait for pullbacks.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,784; S&P 500:2,252; Nasdaq Comp.:5,431
RESISTANCE “today”:DJIA:19,926;S&P 500:2,272;Nasdaq Comp.:5,479
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SOMETHING FOR “JUST ABOUT” EVERYONE !
What could be better than promises of lower corporate taxes, less oversight, and BIG government spend on top of a sneaky strong economy ?
That’s what it looks like at this point in time. One thing about the stock market, it loves pie in the sky.
How so ?
Because it defies quantification, or at least until the truth is known. You see, this is more about human nature (greed, fear) and less about reality.
Really, a stock’s price is merely a matter of opinion, which is based on confidence or lack thereof.
This could be the grandest of all bull markets. It has a good start, up 231% in 7-1/2 years. It probably has a lot further to go, so long as the Street salivates over the prospects of a corporate windfall in coming years, and nothing gets in the way to prevent it.
When the end comes, no one will believe the few who warn of it, in fact, they will despise such seers for raining on their parade, despise them even more when the market crashes.
Like I said, it is all about human nature.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.
Investor’s first read – Daily edge before the open
DJIA: 19,852
S&P 500: 2,262
Nasdaq Com.:5,456
Russell 2000:1,366
Friday, December 16, 2016 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
YEAR-END OPPORTUNITIES
The post-election surge has overrun the classic year-end activity, a usual mishmash of buying and selling that is driven by tax selling, and in this case a scramble by institutions to dress up portfolios that reflect what could be what appeals to investors going forward.
What does that mean ? Probably more bank stocks than money managers would have owned pre-Trump. And maybe select biotech/ biopharma stocks, though the industry is getting mixed signals with talk of deregulation on the one hand and a crackdown on drug price increases on the other hand. Then too, a portfolio may need an infrastructure play.
That’s called window dressing.
But, a lot of these stocks blew out of the gate immediately after news of Trump’s election. So, it’s back to diligent homework, good judgement, emotional control and an instinct for timing.
Quality stocks that are depressed from their high for the year tend to be under selling pressure at year-end due to tax selling decisions. That offers buyers an opportunity to pick up bargains, the following stock stands to be one of them.
Gilead Sciences (GILD: $74.84), a biopharmaceutical company, is a good example. Down 27% from its April high, Gild bounced $1.84 (2.5%) Tuesday after posting a 2016 low four days ago at $70.83. The buying could be investors looking out to a better year in 2017, or it could be short covering, or a combination of both. The stock sports a number of buy recommendations on the Street.
The post-election up-move of DJIA 8.4%, S&P 500: +5.7%, Nasdaq Comp.: +5.2%, and Russell 2000: +13.8%, is pure speculation on Mr. Trump’s and a Republican Congress’s ability to reduce taxes, lift regs. and spend big on infrastructure and the military.
Anything to delay or thwart those plans will trigger an ugly correction.
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TECHNICAL
The Fed did as expected, it raised its benchmark rate to a range of 0.5 to 0.75 percent from 0.25 to 0.5 percent.
In recent posts, I noted that the Street pretty much accepted a rate increase, but I went on to warn that they may not be prepared for multiple rate increases in 2017, and to expect retaliation from Trump.
So, is the Fed back in the driver’s seat ?
What this market does not need is more micro-managing by the Fed., but that’s what I am hearing based on Yellen’s comments yesterday. One year ago, the Fed forecast as many as three bumps in its rate for 2016, and we got one. Throughout the year, we heard conflicting comments from its Governors about the timing of a rate increase, which serves to create volatility and a lot of unnecessary uncertainty. Enough ! Let the market trade freely !
We have ten days to go until year-end. Expect a lot of scrambling to buy favored stocks before they are run higher. While some tax selling is taking place now, the bulk of profit-taking will likely take place in 2017, when it is presumed taxes will be more favorable.
The market has run into some headwinds in recent days, but frantic buyers still hold an edge. It is rarely smart to “chase” a rising stock that has already moved up sharply. The fever launched after the election makes it difficult to wait for pullbacks.
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SUPPORT “today”: DJIA:19,784; S&P 500:2,252; Nasdaq Comp.:5,431
RESISTANCE “today”:DJIA:19,926;S&P 500:2,272;Nasdaq Comp.:5,479
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Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
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SOMETHING FOR “JUST ABOUT” EVERYONE !
What could be better than promises of lower corporate taxes, less oversight, and BIG government spend on top of a sneaky strong economy ?
That’s what it looks like at this point in time. One thing about the stock market, it loves pie in the sky.
How so ?
Because it defies quantification, or at least until the truth is known. You see, this is more about human nature (greed, fear) and less about reality.
Really, a stock’s price is merely a matter of opinion, which is based on confidence or lack thereof.
This could be the grandest of all bull markets. It has a good start, up 231% in 7-1/2 years. It probably has a lot further to go, so long as the Street salivates over the prospects of a corporate windfall in coming years, and nothing gets in the way to prevent it.
When the end comes, no one will believe the few who warn of it, in fact, they will despise such seers for raining on their parade, despise them even more when the market crashes.
Like I said, it is all about human nature.
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iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 18.1% since July. That’s nearly 8 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
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MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
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 STATUS OF MARKET: bullish
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
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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.