2017 ? Wild, Disruptive, Divisive

2017 ? Wild, Disruptive, Divisive
Investor’s first read – Daily edge before the open
DJIA: 19,885
S&P 500: 2,274
Nasdaq Comp.:5,574
Russell 2000:1,372
Tuesday, January 17, 2017 9:04 a.m.
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The inauguration of Donald Trump on Friday presents the Street and American citizens with a full plate of considerations, including:
– the prospect of big corporate tax cuts, deregulation, a big spend on the military and the infrastructure and the restructuring of long-standing trade agreements.
-the uncertainties of the repeal of Obamacare
-talk of privatization of Medicare and Social Security
-possible undermining of NATO and the European Union
-a trade war of sorts.
-lifting of sanctions on Russia for its incursion in the Crimea and actions in Syria, adding to questions already breached.
-continued internal polarization of America and the possible extension of such to other countries.
Just talk of these things can be unsettling, but given a preference, the Street will focus on the prospect for a jump in corporate profits and of course another surge in stock prices.
As long as all these issues are on the front burner and the outcome uncertain, the stock market should favor the bulls. .
A very different president will take office Friday, unfortunately one who so far has been inconsistent and unpredictable.
. On top of that, an untethered Republican Congress will wield an axe to anything with President Obama’s name on it.
Is the system really broke and needs fixing, or should it be tweaked with care ?
How the market takes to that is an unknown today. The stock market is up 241%, as Trump takes office, and the economy, though stable and growing at a moderate pace, could heat up if the speculative juices begin to accelerate if a good part of the tax cuts, dereg., and “spend.” occur
The Fed’s reaction to massive corporate perks, if they come to fruition will become a factor later this year or 2018.
CONCLUSION:
I doubt the Street’s computers are programmed to anticipate what to expect from Donald Trump, how could they ? They can be programmed to project the impact of tax cuts and increased spending on bottom lines and stock valuations that will result, and that is the drummer the market will march to.
This has the potential for a pig-out, a private party capped by a speculative boom before a bear market reinstates reality.
A lot of money can be made under a scenario like this so long as an investor leaves the party before last call.
What stirs my contrary instincts is the fact corporate tax cuts and huge spending programs and a booming stock market seem so certain. How can they miss ? The Republicans control everything. The light is bright green – why not load up !
But really, is it ever that easy ? Is it possible, the BIG money sees the risk in disrupting time-tested solutions to trade, international deterrence to aggression, tax cuts that will require slashes in social mechanisms that have enabled the mass of people to fuel our economy ?
The Mid-East is a mess ever since we invaded Iraq. What folly is next ? the EU ? NATO ?
These are things on the chopping block. Will that delay the party ?
Will 2017 be too disruptive, or will all the fluff about taxes and spending be just that – fluff ?
The ball is in the lap of the BIG money, money so big it doesn’t want the boat rocked so much it takes on water with a risk of sinking. This is an element I have referred to often, these are the people who have it made unless their foundation is threatened by senseless change.
They may stay for the first glass of champagne, or be a “no show.”
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SUPPORT “today”: DJIA: 19,806 ;S&P:2,268; Nasdaq Comp.:5,561
RESISTANCE “today”:DJIA:19,923;S&P 500:2,283; Nasdaq Comp.:5,589
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
We are heading into the ugliest domestic and international era of the past 70 years, the Republican Controlled Congress’ rape and pillage of efforts during the last 8 years to define that we are a people of decency, compassion, mutual respect, and optimism. So much of the market’s stability depends on confidence, he does not breed it, he undermines it, and that can hurt investors.
There is a chance, not huge, but enough to take seriously, that our nation is coming apart at the seams, that divisiveness will trump cooperation, civility will yield to incivility, progress will yield to more gridlock, and demonstrations will cross the line to bloody violence..
Until last week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
The President-elect should busy himself with more important things than tweeting a counter attack on anyone who confronts him.
This behavior has persisted since he began his campaign and is truly scary. As President, such inability to ignore criticism suggests a skin too thin for this job.
As I have said before, I think Donald Trump is a big mistake, and when you make big mistakes, you pay a price, and that could be injurious to investors.
It’s one thing to run a company where you have employees who will do as they are told, or get fired. That is not how the office of the Presidency works.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks – August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

2017 ? Wild, Disruptive, Divisive

Economy & Politics Tim Mullaney

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Opinion: Obama’s economic legacy: Here’s where we (and these 4 industries) are better off

Published: Jan 10, 2017 4:11 p.m. ET

It’s easy to say growth should have been faster. But who outdid the U.S?
Getty Images
President Obama delivers a farewell speech to the nation from Chicago.

By
Tim
Mullaney
Writer

At worst, Barack Obama’s economic legacy resembles his Chicago home: a $3.1 million 6,200-square-footer, in a South Side neighborhood many suburbanites avoid even though crime’s way down: A mansion in a “tough” part of town, for a man directing the best economy in a world of weaker, smaller ones.

At best, the 44th president — and, yes, the first black one — will go down as a calmly-canny manager of the worst economic crisis in 80 years, a visionary who propelled major American industries like energy, automobiles and health care into new eras. He did this with the force of his mind (and the federal checkbook), and left behind a foundation of much-better fiscal balance, and fairer after-tax income distribution thanks largely to tax hikes for the 1% that financed health insurance for 20 million people, mostly in GOP congressional districts.

As Obama heads into his final days in office, lots of us will assess his legacy, including the president himself. Here’s my take: He did well in the short term and brilliantly for the long term.

Right now, the president leaves behind virtually full employment — and, more important, an economy without obvious bubbles to cause the next recession. (Think technology stocks for Bill Clinton or commercial real estate for Ronald Reagan). President-elect Donald Trump will claim credit as the expansion ripens further, because the economy has slack still to absorb and because recent growth is built on Obama’s stable fiscal foundation, which will pay dividends. Yes, Trump plans undoing that fiscal stability. It’s Trump: Making sense is optional.

Unemployment is 4.7%, less than half its 2009 U.S. peak — or the 9.8% the eurozone has now. The stock market tripled, beginning the March 2009 day a Wall Street Journal op-ed shrieked “Obama’s Radicalism Is Killing the Dow.” That happened before the post-2016-election popgun of a rally Trump wants credit for, including the 21 trading days the Dow Jones Industrial Average DJIA, -0.03% has spent trying to get from 19,750 to 20,000. The federal deficit has shrunk by two-thirds. Even housing prices, measured by this index, are 30% higher.
0:00 / 0:00
Opinion Journal: The Obama legacy(4:51)

Global View Columnist Bret Stephens previews President Obama’s farewell speech. Photo: European Pressphoto Agency

If the S&P 500 SPX, +0.18% is at 7,000 when Trump leaves, unemployment is at 2.3% and the federal deficit is $150 billion or less, he’ll have delivered better economic improvements in percentage terms than Obama. And he’ll have to cut the percentage of under-65 adults without health insurance below 5%, while repealing Obamacare.

Maybe. But don’t bet the house.

Inflation-adjusted middle-class incomes are higher than Obama inherited and will likely top internet-boom standards next year. Obama was handed an avalanche in which the U.S. lost 9 million jobs in two years and saw real median household income fall 10% from when George W. Bush arrived, bottoming in 2011. U.S. growth is the most consistent in the developed world: Republicans criticizing 2.5% yearly growth in 2014-2015 gross domestic product should look at the eurozone or Japan.

Now let’s think about the longer term, where Obama leaves four huge industries materially better-positioned.

First, cars. Obama’s policies created an electric-car industry where there was none, partly by financing Tesla’s first factory in a dormant credit market, helping create about 20,000 jobs at Tesla TSLA, +3.55% lone, so far. (If you find Teslas “elitist,” Obama also financed the factory where F, +0.32% makes fuel-efficient EcoBoost engines for F-150 pickups, for real Americans whose tricked-out F-150s cost more than Tesla’s $35,000 Model 3), And he saved General Motors GM, -0.45% and Chrysler FCAU, -2.21% salvaging 1.5 million jobs.

This president set health care on a fundamentally healthier business model for companies like HCA Holdings HCA, +0.35% and Tenet Healthcare THC, +0.72% by implementing results-based payments for medicine, phasing out fogeyish fee-for-service medicine that Trump’s team admires. The old system had made American medicine the developed world’s least cost-effective, by a mile, costing us about $1 trillion more a year.

Obama’s team also transformed energy and utility industries by guiding stimulus money toward wind and solar plants, which has driven renewables’ cost low enough to be sustainable, and by standing aside to let hydraulic fracking break Arab petrostates (and Russia).

The long-term shape of those business is now clear — and, as the president argued this week, unchangeable: Mostly carbon-free renewable electricity,and lower-carbon natural-gas-fired juice, powering mostly pollution-free, much safer self-driving electric cars. Both electric cars and clean-power technologies are made heavily in the U.S., and employ far more people than the coal business. The benefits of Obama’s energy policies only begin with the $1,000 per household Americans are already saving on gasoline.

Speaking of the long term, the 12% decline in U.S. carbon emissions from 2005 levels — almost halfway to the Paris climate accords’ goals — underscores that meeting the goals is pretty easy. Decoupling America’s strategic interests from energy gives future presidents freedom to let Arab states fix internal messes without Washington debating how many failed states, like Syria, the U.S. should manage at once.

You don’t do these things kvetching about Meryl Streep or using the presidency to hustle bracelets and hotel receptions. Say what you want about Obama: Trump’s 37% approval in a Quinnipiac poll is lower than Obama’s has ever been, and that’s before the inauguration. We’ll miss ol’ Mr. Spock, his often-cold logic most of all.

Now read:

Street Salivating Over Potential Handout

Street Salivating Over Possible Handout !
Investor’s first read – Daily edge before the open
DJIA: 19,891
S&P 500: 2,270
Nasdaq Comp.:5,547
Russell 2000:1,361
Friday, January 13, 2017 8:46 a.m.
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TECHNICAL
Volatility is back. The Street wants to play, but is hearing footsteps, unsure what to expect on the tweet front. Yep, the Street is still salivating over the prospect of corporate tax cuts, deregulation and the BIG spend after eight years of Congressional obstruction.
Since no one knows the outcome of all these corporate perks touted by the Trump administration, odds favor the upside with mini flash crashes in the interim when doubts set in, or reality that God forbid, it was all bluster to get the prize.
What’s important about yesterday’s market action is, the market regained most of what it lost in early trading. Quick bounce-backs from sharp sell offs are a sign of a market that still has upside. It doesn’t work in a whipsaw market where the market gets blindsided, first by one piece of news, then by another. But the whipsaw has not sunk its talons into this market – yet.
As long as the Street expects a handout, the market will hum, possibly to ridiculous heights. This is final stage bull market behavior. Tops are more difficult to call. Unless triggered by an event, they come like a thief in the night to rob investors of a sure thing – bigger and easier to garner profits. Kind of like dart-throwing time, when investors can’t miss….until of course, they do, and the plug is pulled
I don’t see that yet, but want to paint a picture, hoping to plant a seed, so it will be easier for you to leave before the top and the pain that follows.
A failure to follow through today would raise a yellow flag. The blue chip DJIA and S&P 500have been range-bound for 22 days. That may continue until January 20 when we get a brief breakout to new highs. The Nasdaq has been in a buoyant market of its own.
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SUPPORT “today”: DJIA: 19,861;S&P:2,267; Nasdaq Comp.:5,537
RESISTANCE “today”:DJIA:19,976;S&P 500:2,281; Nasdaq Comp.:5,561
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
We are heading into the ugliest domestic and international era of the past 70 years, the Republican Controlled Congress’ rape and pillage of efforts during the last 8 years to define that we are a people of decency, compassion, mutual respect, and optimism. So much of the market’s stability depends on confidence, he does not breed it, he undermines it, and that can hurt investors.
There is a chance, not huge, but enough to take seriously, that our nation is coming apart at the seams, that divisiveness will trump cooperation, civility will yield to incivility, progress will yield to more gridlock, and demonstrations will cross the line to bloody violence..
Until last week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
The President-elect should busy himself with more important things than tweeting a counter attack on anyone who confronts him.
This behavior has persisted since he began his campaign and is truly scary. As President, such inability to ignore criticism suggests a skin too thin for this job.
As I have said before, I think Donald Trump is a big mistake, and when you make big mistakes, you pay a price, and that could be injurious to investors.
It’s one thing to run a company where you have employees who will do as they are told, or get fired. That is not how the office of the Presidency works.
It is possible that given an opportunity the Republican Party will dump him. I think they really want Pence. The Republican establishment has no future with Trump. He will soon be fighting with them, as well. Hell, he started today – : “Blames both Democrats and Republicans for Allegations.”
Geemanteezie, am I watching this ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks – August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Military Spend Over Infrastructure

Investor’s first read – Daily edge before the open
DJIA: 19,954
S&P 500: 2,275
Nasdaq Com.: 5,563
Russell 2000:1,373
Thursday, January 12, 2017 8:13 a.m.
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TECHNICAL
Are doubts creeping in about the next two-to-four years, that all the bluster about tax cuts, deregulation and the big spend is just that – bluster, or maybe none or little of it will happen for years ?
Doubts can be healthy, they temper blind enthusiasm. My guess here is a lot will be tried and some of these issues will see passage, but fall short of the original target.
I am pretty sure of one thing the United States will be on a war footing in the spring of 2018. Two things. For one, it would juice the economy at a time it may be stalled and may push the deficit hawks to act on military expenditures. Two, it would ensure support for the mid-term elections. The Bush administration did this in 2002 prior to the invasion of Iraq. Voters do not want big changes when their country may go to war.
This suggests the Trump administration will talk of infrastructure spending, but focus on an increase in military outlays.
Stocks rebounded yesterday from a mid-day selloff that was triggered by President-elect Trump’s comment that he would pressure drug companies to bid for government contracts.
Drug stocks plunged, pulling the market averages with them before the market stabilized.
It is important to note here that based on yesterday’s skittishness, the Street is very uneasy about what Trump will do next, ready to hit the exits if he does something irrational.
That suggests a series of mini flash-crashes in the future.
Q4 earnings reports will begin to flow Friday, and Alcoa (AA) will not be the one to kick it off. They’ll report on the 24th. Selected status downgrades: Goldman Sachs (GS) to Sell from neutral, likewise for Travelers (TRV) and Chevron to hold from buy, as well as Ariad Pharm (ARIA), AMAG Pharm (AMAG), Surgical Care (SCAI), and Scotts Miracle-Gro (SMG).
I have always questioned the merit of the institutional grading system. I question the value of such great emphasis on quarterly reports, since it detracts from the big picture. The tendency is for analysts and managements to low-ball estimates to avoid a report that falls short of guidance and Street projections. Stocks can get hammered even with a “beat” if the beat was not great enough. Silly !
All that said, the Street wants action and will push for it. Since no one knows the outcome of all the corporate perks planned by the Trump administration, odds favor the upside with mini flash crashes in the interim when doubts set in.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,796;S&P:2,262; Nasdaq Comp.:5,531
RESISTANCE “today”:DJIA:19,796;S&P 500:2,278; Nasdaq Comp.:5,569
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
There is a chance, not huge, but enough to take seriously, that our nation is coming apart at the seams, that divisiveness will trump cooperation, civility will yield to incivility, progress will yield to more gridlock, and demonstrations will cross the line to bloody violence..
Until last week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
The President-elect should busy himself with more important things than tweeting a counter attack on anyone who confronts him.
This behavior has persisted since he began his campaign and is truly scary. As President, such inability to ignore criticism suggests a skin too thin for this job.
As I have said before, I think Donald Trump is a mistake, and when you make big mistakes, you pay a price, and that could be injurious to investors.
It’s one thing to run a company where you have employees who will do as they are told, or get fired. That is not how the office of the Presidency works.
So much of the market’s stability depends on confidence, he does not breed it, he undermines it, and that can hurt investors.
It is possible that given an opportunity the Republican Party will dump him, I think they really want Pence. The Republican establishment has no future with Trump. He will soon be fighting with them, as well.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
HIDDEN VALUE, SPECIAL SITUATIONS
These companies possess something unique, that is not reflected in the price of the stock, until it is discovered ! There are fewer today than 20-30 years ago, reporting requirements and the ability of computers to uncover hidden values has culled the landscape.
Today’s opportunities usually develop after a brand name stock gets pummeled beyond reason. I noted Viacom Friday at $40.90 ($42.15 today) as one possibility.
Not all VIACOM subsidiaries are at max (MTV, Paramount, Home Entertainment, DreamWorks, BET networks) but a base is there for development. Then there’s Paramount Pictures (content).
Motion picture companies with huge libraries of what is now called content almost went out of business in the late 1960s, including Disney (DIS). No one wanted them.
In 1979 I wrote a BUY on 20th Century-Fox entitled “How to Take Over 20th Century-Fox for Practically Nothing.” I wrote that to accomplish this you had to make a cash tender offer for twice its price at that time, sell off most of its assets,(TV stations, Aspen Skiing, Coca-Cola Midwest, foreign theaters, L.A. real estate to become Century City, $76 million in cash) to get your tender money back and you are left with its film production and distribution company and film library (incl. Star Wars ) all an estimated value of hundreds of millions of dollars and growing at warp speed as television networks started to scramble for content.
What, which triggered my recommendation was the irregular trading in the stock, which I detected watching the trades pass on the screen in a broker’s boardroom. The stock would trade up on heavy volume, then trickle all the way back down on light trading. This could only be detected by watching the trades on the tape
The irregular trading in Fox kept happening, leading me to the conclusion the Specialist on the NYSE floor (who is supposed to maintain a fair and orderly market) was letting a big investor accumulate the stock.
I visited management in L.A. and later addressed the Fox annual meeting, recommending they change their Specialist. Herbert Jay Siegel (Chris-Craft Inds.) had filed a disclosure of acquiring 5.3% of Fox a month prior, but assured Fox it was for investment purposes only.
But someone was still buying. Variety gave me nice ink on the matter that week, but nothing was done by Fox about the Specialist on the floor.
In 1981 Fox was acquired by Marc Rich and Marvin Davis then sold to Rupert Murdoch who had to become a U.S. citizen in order to control the television holdings gained in the acquisition.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks – August 19, 20
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Nine of the Last Ten Recessions Occurred…..

Investor’s first read – Daily edge before the open
DJIA: 19,855
S&P 500: 2,268
Nasdaq Com.: 5,551
Russell 2000:1,370
Wednesday, January 11, 2017 8:33 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
Nine of the last ten recessions occurred with a Republican in the White House. Can there possibly be a repeat this time around ?
Clearly doesn’t look possible, but stuff happens.
Having survived a near global meltdown nine years ago the economy has forged a steady recovery with numerous tests along the way. Add to that sudden major changes (tax cuts, deregulation and a big spend), and you have a prescription for a boom.
The prospect of all those economic goodies coming to fruition was brightened by the election of Donald Trump in November, and the stock market soared, but the bond market plunged in face of a resurgence of inflation..
Much depends on how much of Trump’s goals can be accomplished. The Republicans are in a dilemma. Trump decimated their party leadership ushering in a whole new brand of Republicanism. The Old Guard is on the ropes, at risk of extinction. Will they endorse Trump’s program making him look good, or will they go to the mat with him on the big spend. Tax cuts – yes. Deregulation – yes. But the spend is where the economy gets juiced the most, it just may take a year or two to begin to have an impact.
Investors must step back, put political preferences aside and be aware that this can go either way – a bonanza/bust, or a disappointment. Ultimately, we will get a recession/depression (ala 2007-2009), but it’s the in between that we need to focus on here. This is about making and preserving capital.
Military spending could have wider impact on the nation’s employment than infrastructure spending with military manufacturing facilities reasonably well distributed across the U.S.. The latest talk is shipbuilding, that’ll put Rosie to work.
There is the possibility that the Fed is behind the curve on interest rate increases. It may have overstayed its low rate policy in recent years, time will tell. A sudden big spend by the government, or just the anticipation of one, could trigger inflationary expectations forcing the Fed to act sooner on its first of three expected increases this year.
I don’t expect the Fed factor to crimp anything for months.
The Nasdaq broke out to new highs again yesterday, the DJIA and S&P 500 have been in a flat, narrow trading range for 18 days, which is healthy.
A two-day correction here would set up another rally, but we may be range-bound for weeks. Look for a one-day reversal to the upside Thursday/Friday.
If the BIG money pulls the plug, look for a 12% – 14% correction. With euphoria for all kinds of corporate goodies in store running high, that is unlikely, but must be given some weight.
It doesn’t make sense that they will what with a chance to “RUN” the market higher.
Oh, one other thing. Q4 earnings reports will begin to flow Friday, and Alcoa (AA) will not be the one to kick it off. They’ll report on the 24th. (see below)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,796;S&P:2,262; Nasdaq Comp.:5,531
RESISTANCE “today”:DJIA:19,937;S&P 500:2,278; Nasdaq Comp.:5,579
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
Until last week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
The President-elect should busy himself with more important things than tweeting a counter attack on Meryl Streep calling her an “overrated actress” because she condemned him in Sunday Nights Golden Globe awards event for his imitation of a disabled reporter.
This behavior has persisted since he began his campaign and is truly scary. As President, such inability to ignore criticism from insignificant sources suggests a skin too thin for this job.
As I have said, I think Donald Trump is a mistake, and when you make big mistake, you pay a price, and that could be injurious to investors.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
HIDDEN VALUE, SPECIAL SITUATIONS
These companies possess something unique, that is not reflected in the price of the stock, until it is discovered ! There are fewer today than 20-30 years ago, reporting requirements and the ability of computers to uncover hidden values has culled the landscape.
Today’s opportunities usually develop after a brand name stock gets pummeled beyond reason. I noted Viacom Friday at $40.90 ($42.15 today) as one possibility.
Not all VIACOM subsidiaries are at max (MTV, Paramount, Home Entertainment, DreamWorks, BET networks) but a base is there for development. Then there’s Paramount Pictures (content).
Motion picture companies with huge libraries of what is now called content almost went out of business in the late 1960s, including Disney (DIS). No one wanted them.
In 1979 I wrote a BUY on 20th Century-Fox entitled “How to Take Over 20th Century-Fox for Practically Nothing.” I wrote that to accomplish this you had to make a cash tender offer for twice its price at that time, sell off most of its assets,(TV stations, Aspen Skiing, Coca-Cola Midwest, foreign theaters, L.A. real estate to become Century City, $76 million in cash) to get your tender money back and you are left with its film production and distribution company and film library (incl. Star Wars ) all an estimated value of hundreds of millions of dollars and growing at warp speed as television networks started to scramble for content.
What, which triggered my recommendation was the irregular trading in the stock, which I detected watching the trades pass on the screen in a broker’s boardroom. The stock would trade up on heavy volume, then trickle all the way back down on light trading. This could only be detected by watching the trades on the tape
The irregular trading in Fox kept happening, leading me to the conclusion the Specialist on the NYSE floor (who is supposed to maintain a fair and orderly market) was letting a big investor accumulate the stock.
I visited management in L.A. and later addressed the Fox annual meeting, recommending they change their Specialist. Herbert Jay Siegel (Chris-Craft Inds.) had filed a disclosure of acquiring 5.3% of Fox a month prior, but assured Fox it was for investment purposes only.
But someone was still buying. Variety gave me nice ink on the matter that week, but nothing was done by Fox about the Specialist on the floor.
In 1981 Fox was acquired by Marc Rich and Marvin Davis then sold to Rupert Murdoch who had to become a U.S. citizen in order to control the television holdings gained in the acquisition.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

Will the “BIG Spend” Happen ?

Investor’s first read – Daily edge before the open
DJIA: 19,887
S&P 500: 2,268
Nasdaq Com.: 5,531
Russell 2000:1,357
Tuesday, January 10, 2017 9:09 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
Looks like the Street is beginning to question whether Trump will be able to deliver on all his promises. Budget hawks may be reluctant to juice spending on both the military and infrastructure, though the latter is adaptable to some extent through private/public partnerships. It will take a couple of years before this spending hits the economy, and that may be why these stocks are slipping. Ten of the 12 infrastructure stocks I track have softened in recent days after a big year-end run up.
Military spending could have wider impact on the nation’s employment than infrastructure spending with military manufacturing facilities reasonably well distributed across the U.S.. The latest talk is shipbuilding, that’ll put Rosie to work.
There is the possibility that the Fed is behind the curve on interest rate increases. It may have overstayed its low rate policy in recent years, time will tell. A sudden big spend by the government, or just the anticipation of one, could trigger inflationary expectations forcing the Fed to act sooner on its first of three expected increases this year.
I don’t expect the Fed factor to crimp anything for months.
The Nasdaq broke out to new highs yesterday, the DJIA and S&P 500 have been in a flat, narrow trading range for 18 days, which is healthy.
A two-day correction here would set up another rally, but we may be range-bound for weeks. Look for a one-day reversal to the upside Thursday/Friday.
If the BIG money pulls the plug, look for a 12% – 14% correction. With euphoria for all kinds of corporate goodies in store running high, that is unlikely, but must be given some weight.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,819 ;S&P:2,263; Nasdaq Comp.:5,523
RESISTANCE “today”:DJIA:19,920;S&P 500:2,272; Nasdaq Comp.:5,536
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
Until last week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
The President-elect should busy himself with more important things than tweeting a counter attack on Meryl Streep calling her an “overrated actress” because she condemned him in Sunday Nights Golden Globe awards event for his imitation of a disabled reporter.
This behavior has persisted since he began his campaign and is truly scary. As President, such inability to ignore criticism from insignificant sources suggests a skin too thin for this job.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
HIDDEN VALUE, SPECIAL SITUATIONS
These companies possess something unique, that is not reflected in the price of the stock, until it is discovered ! There are fewer today than 20-30 years ago, reporting requirements and the ability of computers to uncover hidden values has culled the landscape.
Today’s opportunities usually develop after a brand name stock gets pummeled beyond reason. I noted Viacom Friday at $40.90 as one possibility.
Not all VIACOM subsidiaries are at max (MTV, Paramount, Home Entertainment, DreamWorks, BET networks) but a base is there for development. Then there’s Paramount Pictures (content).
Motion picture companies with huge libraries of what is now called content almost went out of business in the late 1960s, including Disney (DIS). No one wanted them.
In 1979 I wrote a BUY on 20th Century-Fox entitled “How to Take Over 20th Century-Fox for Practically Nothing.” I wrote that to accomplish this you had to make a cash tender offer for twice its price at that time, sell off most of its assets,(TV stations, Aspen Skiing, Coca-Cola Midwest, foreign theaters, L.A. real estate to become Century City, $76 million in cash) to get your tender money back and you are left with its film production and distribution company and film library (incl. Star Wars ) all an estimated value of hundreds of millions of dollars and growing at warp speed as television networks started to scramble for content.
What, which triggered my recommendation was the irregular trading in the stock, which I detected watching the trades pass on the screen in a broker’s boardroom. The stock would trade up on heavy volume, then trickle all the way back down on light trading. This could only be detected by watching the trades on the tape
The irregular trading in Fox kept happening, leading me to the conclusion the Specialist on the NYSE floor (who is supposed to maintain a fair and orderly market) was letting a big investor accumulate the stock.
I visited management in L.A. and later addressed the Fox annual meeting, recommending they change their Specialist. Herbert Jay Siegel (Chris-Craft Inds.) had filed a disclosure of acquiring 5.3% of Fox a month prior, but assured Fox it was for investment purposes only.
But someone was still buying. Variety gave me nice ink on the matter that week, but nothing was done by Fox about the Specialist on the floor.
In 1981 Fox was acquired by Marc Rich and Marvin Davis then sold to Rupert Murdoch who had to become a U.S. citizen in order to control the television holdings gained in the acquisition.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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 Nirvana, or Hell

Investor’s first read – Daily edge before the open
DJIA: 19,963
S&P 500: 2,276
Nasdaq Com.: 5,521
Russell 2000:1,367
Monday, January 9, 2017 9:09 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This year will be a wild one, bizarre at times, fraught with global unrest, wide swings in currencies, but hope on Wall Street for a feast on the corporate benefits of tax cuts, fewer regulations and the big spend on bolstering the military and infrastructure. Reminds me of the playbook for old Project for a New American Century – economic and military domination of the world.
Confirmation hearings on President-elect Trump’s Cabinet will begin this week. They won’t be pretty, but there is little to prevent passage.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
The Street wants to play, investors want a big score. A 241% rise in the S&P 500 didn’t sate appetites, it came in dribs and drabs. Only a prescient BIG money looking out to a surge in inflation, possibly stagflation, and a “catch up” response by the fickle Federal Reserve can stand in the way of a sizzling bull market.
A boom looks like a 100% guarantee. The Trump government plans an unprecedented goose to an economy that has grown slowly out of a near meltdown in 2008-2009. This is a prescription for investor nirvana.
It all seems so “sure,” I am uneasy about this on.
The market will open a smidge to the downside. The key to the near-term trend is how quickly will investors jump on lower prices.
A two-day shakeout is likely, but the Street is driven to BUY. Only the BIG money can stop it.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,903:;S&P:2,271; Nasdaq Comp.:5,496
RESISTANCE “today”:DJIA:19,986;S&P 500:2,279 ; Nasdaq Comp.:5,527
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
Until this week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
That’s not only a market risk, it is a risk to the well being of America.
It is not good business to inject politics into stock market blogs, but silence is worse.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 5.2%. Growth rates in 10 of 11 sectors have been reduced since Sept. 30. The growth rate for all of 2016 is est. at +2.2%. Earnings for 2017 are expected to increase 11.5%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
FYI: There was some missed estimates in 2016, Q3 in particular where earnings growth surprised the Street. Along with a firming economy, this was a contributor to the year year-end rally in addition to promises of tax cuts, dereg., and a big spend..
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
HIDDEN VALUE, SPECIAL SITUATIONS
These companies possess something unique, that is not reflected in the price of the stock, until it is discovered ! There are fewer today than 20-30 years ago, reporting requirements and the ability of computers to uncover hidden values has culled the landscape.
Today’s opportunities usually develop after a brand name stock gets pummeled beyond reason. I noted Viacom Friday at $40.90 as one possibility.
Not all VIACOM subsidiaries are at max (MTV, Paramount, Home Entertainment, DreamWorks, BET networks) but a base is there for development. Then there’s Paramount Pictures (content).
Motion picture companies with huge libraries of what is now called content almost went out of business in the late 1960s, including Disney (DIS). No one wanted them.
In 1979 I wrote a BUY on 20th Century-Fox entitled “How to Take Over 20th Century-Fox for Practically Nothing.” I wrote that to accomplish this you had to make a cash tender offer for twice its price at that time, sell off most of its assets,(TV stations, Aspen Skiing, Coca-Cola Midwest, foreign theaters, L.A. real estate to become Century City, $76 million in cash) to get your tender money back and you are left with its film production and distribution company and film library (incl. Star Wars ) all an estimated value of hundreds of millions of dollars and growing at warp speed as television networks started to scramble for content.
What, which triggered my recommendation was the irregular trading in the stock, which I detected watching the trades pass on the screen in a broker’s boardroom. The stock would trade up on heavy volume, then trickle all the way back down on light trading. This could only be detected by watching the trades on the tape
The irregular trading in Fox kept happening, leading me to the conclusion the Specialist on the NYSE floor (who is supposed to maintain a fair and orderly market) was letting a big investor accumulate the stock.
I visited management in L.A. and later addressed the Fox annual meeting, recommending they change their Specialist. Herbert Jay Siegel (Chris-Craft Inds.) had filed a disclosure of acquiring 5.3% of Fox a month prior, but assured Fox it was for investment purposes only.
But someone was still buying. Variety gave me nice ink on the matter that week, but nothing was done by Fox about the Specialist on the floor.
In 1981 Fox was acquired by Marc Rich and Marvin Davis then sold to Rupert Murdoch who had to become a U.S. citizen in order to control the television holdings gained in the acquisition.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
A TIMELY WARNING 10 YEARS AGO
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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.

And Nary a Tweet

Investor’s first read – Daily edge before the open
DJIA: 19,899
S&P 500: 2,269
Nasdaq Com.: 5,987
Russell 2000:1,372
Friday, January 6, 2017 8:48 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
I have been beating up on Donald Trump all week and nary a tweet.
Until this week, I steered clear of politics in my posts. I strongly think President-elect Trump is a major “risk” factor and that has to be addressed.
He is both predictable and unpredictable. Predictable in the fact he cannot tolerate criticism or opposition without rejection and retaliation . Unpredictable in that no one (including himself) knows what he will do under the kind of serious situations that confront a president every day.
That’s not only a market risk, it is a risk to the well being of America. I am aware some readers will never read this blog again. What I care most is that I call it as I see it based on 54 years in this business.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
Hmmmm. Second thoughts, or just a temporary standoff as sellers take profits in 2017 rather than 2016 where taxes may have been higher ?
Or has it dawned on the Street that 2017 will be as bizarre as it gets with divisiveness being the only thing to hit new highs.
If the BIG money walks, it’s over, we’re going south. I don’t see that yet.
Our economy is a smidge better than stable, and that can be a platform for a more accelerated growth rate, especially if corporate taxes are cut and a lot of money is allocated for the military and infrastructure. It will take two years before the latter will have a major impact.
As I have noted before, this is one of those situations where most investors can play hard but sit close to the exit.
Expect the Fed to waffle on two or three rate bumps this year, in an attempt micromanage the market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,831:;S&P:2,263 ; Nasdaq Comp.:5,470
RESISTANCE “today”:DJIA:19,971;S&P 500:2,275 ; Nasdaq Comp.:5,531
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RESEARCHERS – CHECK THIS ONE OUT !
Worth researching further: Viacom (VIA: 40.90) It’s a global entertainment company, multiplatform properties including Paramount Pictures and Paramount Home Entertainment, DreamWorks, MTV, BET networks. I creates programming and content , has hundreds of interactive global properties , online, broadband, wireless television services. It is down from a July 2014 high of $50.81 and IMO is an asset play selling at 11 x earnings vs 5-yr avg. of 13.1) , 1.3 x sales with a dividend yield of 2%. While not all operations are chugging along on all cylinders, its Paramount Pictures library (CONTENT) is a gem. Everyone needs content today.
That’s the boooring part. This is where it can get interesting. This is what is called a special situation – undervalued assets, i.e, the parts are worth more than the market values the whole and some day the “truth will out.” Problem with these gems is the market action is a lot of stop and go, lot of frustration. Just when you think one of these is going to run, it goes back down, taking its good old time doing so. Just when you get tired of seeing other people making money in stocks that don’t do that, you SELL it, (the “I can’t stand it anymore” stage of frustration), then, it EXPLODES.
Fair ? Course not !
Before computers, there were a lot of these companies, many had huge tracts of land that had appreciated over the years, but was still carried on the books at ridiculous prices. In time, an analyst out hiking, riding or flying low asked the question, “who owns this land – it’s great.” He followed up to find out, bought the stock and got himself a winner. Or maybe he bothered to listen to a grizzled old man in a bar about the days back “when” a family bought up all this land no one wanted, passed it down the line until it was made part of a start up company and it quietly grew in value.
Motion picture companies with huge libraries of what is now called content almost went out of business in the late 1960s, including Disney (DIS). No one wanted them.
In 1979 I wrote a BUY on 20th Century-Fox entitled “How to Take Over 20th Century-Fox for Practically Nothing.” I wrote that to do this you make a cash tender offer for twice its price at that time, sell off most of its assets to get your tender money back and you are left with its film production and distribution company and film library (incl. Star Wars ) all an estimated value of hundreds of millions of dollars and growing a warp speed as television networks started to scramble for content. FOX was acquired several years later then resold to Rupert Murdoch, Fox Broadcasting.
These are hard to find today, too many computer screens accessing huge data files.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Stall or Pause Before a Surge ?

Investor’s first read – Daily edge before the open
DJIA: 19,942
S&P 500: 2,270
Nasdaq Com.: 5,470
Russell 2000:1,387
Thursday, January 5, 2017 8:48 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Futures trading suggests a mixed-to-down open. Probably investors putting gains into 2017 in hopes of a better tax break.
Or is it the unease I feel about Congressional overreach and the irrational behavior of President-elect Donald Trump ?
Disclosure: I voted for Clinton (no surprise). I was appalled by the Trump campaign, it crossed all the lines of respect for human beings I hold dear. My warnings about him as the President have nothing to do with denial or sour grapes, or gee if only….., or, there goes the Supreme Court appointment, etc.
I am genuinely alarmed by his behavior. I have a feeling he is hiding something which will be discovered, or that he is so irrational, he will do enormous, possibly irreparable, damage to the United States and to many, many Americans.
Regardless of party affiliation, investors MUST consider the possibility that his presidency will implode, that he will be forced to resign or be removed from office (impeached).
THIS COULD SERIOUSLY IMPACT STOCK PRICES, if only for a while.
I believe the Republican Party would be thrilled to be in a position to oust him, since he is totally destroying the Republican Party, which with overreach, will finish the job. I think they would prefer Pence anyhow.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
“Buy the rumor, sell the news” is one of those Wall Street bromides, which I’m hearing with reference to Dow 20,000. Yes, maybe it would momentarily break 20,000 for a few days, but it’s just another number. This level will have to reject quite a few attempts break through before it is a key level.
More to the point, my Dec. 8 post (DJIA: 19,549, S&P 500: 2,241) headlined, “PANIC ! Speculative Fever Heating Up – Trump Rally Over by Inauguration Day ?” That would be more plausible if the market is stampeding higher as Jan. 20 approaches.
The Fed did not hold a press conference, so the Street had only minutes from the prior month to chew on with little reaction.
So far, the trend is positive. Early January can be tricky. Historically, the first week tends to set the tone for the month and subsequently for the year.
The Street is salivating over the prospects of a windfall, kind of a feeding frenzy at a gourmet smorgasbord.
Anyone stepping aside from the euphoria will realize that this “do nothing” Congress may do little of what Trump would like to embellish his legacy, as the greatest.
That’s why I say, play hard, but sit close to the exit, though many are not nimble enough to do that.
This bull market has shrugged off many serious crises over eight years, maybe it can ignore the Trump follies for a while, hopefully.
Buyers should lie in wait for lower prices. If not, we could have a problem.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,846: 2,259;S&P 500:; Nasdaq Comp.:54,61
RESISTANCE “today”:DJIA:20,019;S&P 500: 2,279; Nasdaq Comp.:5,487
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown. I am again concerned for the market, not so much about derivatives but the Trump presidency.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Play Hard – Sit Close to the Exit

Investor’s first read – Daily edge before the open
DJIA: 19,881
S&P 500: 2,257
Nasdaq Com.: 5,429
Russell 2000:1,365
Wednesday, January 4, 2017 9:06 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I wrote the following in 2007 as I became increasingly aware of “risk.” I was not aware of how disastrous the subprime mortgage/housing bubble situation had gotten, just appalled how extreme the use of derivatives had become. As most of you know the bear market/recession that followed took us to the brink of a total meltdown.

Perfect Storm Looms
The perfect storm in our financial markets is looming.
….It will take a heroic international effort to avert a meltdown of huge magnitude…
….Trading in everything may have to be stopped until some sort of sanity is restored
….This can get real ugly. No one has a handle on the leverage amassed in derivatives
….No one has a true handle on how precarious the situation out there is, and that uncertainty feeds on itself, prompting increased selling…With few buyers, stocks tank.
…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.

George Brooks
August 19, 2007

I am again concerned, not so much about derivatives but the rash, unprecedented behavior of President-elect Donald Trump.
The price of stocks is a matter of opinion as evidenced the wild swings up and down over the years. It would be easy with so much pie in the sky (tax cuts, deregulation, big spend) to go all-in, even borrow heavily to leverage a big score.
With so much to fantasize about, that can easily happen, it has happened in the later stages of bull markets in the past.
This market is capable of going much higher, as institutions and individuals scramble to get on board of a sure thing without a thought of anything going wrong.
A lot of money can be made in euphoric markets like this, but an exit strategy MUST be in place at all times. It’s not that investors get blindsided by buying at the top, it’s that first time down where they think they have been gifted by lower prices that bags them.
I can only urge readers to play hard but sit very close to the exit. Unless the BIG money pulls the plug in coming days, it looks higher.
RISKS:
1- That the pie in the sky doesn’t happen soon enough, or at all.
2- That the Trump presidency implodes. There are so many investigative reporters digging, digging, digging for dirt on a person who refused to release his income tax returns, may not be as wealthy as he claims, and was in the casino business with questionable results. I don’t think he expected to win. This was all about his “brand.” IMHO

I think it is possible, he will resign or be impeached. As unpalatable, caustic, and unbelievable as that may seem, it can happen, and must be given credibility.
What if that happened ? The market would stabilize after a brief hit, the world would breathe a sigh of relief, and we’d all get up in the morning, get dressed, brush our teeth, eat breakfast and go to work in a less divisive environment.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
TECHNICAL
Higher at the open. The DJIA should top 20,000 today, or get close. That really means nothing, but the press will make a big deal of it, sucking more investors into the market, driving it higher.
The market did what was expected yesterday. It rose in face of some 2017 profit taking, pulled back, then continued to rise going into the close.
The FOMC releases minutes from last month’s meeting. Fed Chief Janet Yellen is not scheduled to speak, so I don’t expect any major Fed news.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:19,846;S&P 500:2,254; Nasdaq Comp.:5,418
RESISTANCE “today”:DJIA:19,998;S&P 500:2,271; Nasdaq Comp.:5,468.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.