Tax Cut Hype – More Bluster ?

Investor’s first read – Daily edge before the open
DJIA: 21,892
S&P 500: 2,457
Nasdaq  Comp6,368.:
Russell 2000: 1,391
Thursday,  Aug.  31, 2017   9:16 a.m.
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      President Trump started pitching the merits of tax reform in Springfield, Missouri Wednesday, though without specifics.  Generally, reform would stress simplicity, global competitiveness, relief for the middle class and incentives to bring back dollars held overseas.
      He would like to see the corporate tax rate cut to 15% from 35% and the standard deduction doubled and alluded to closing certain loopholes. All told, the cost to the government would be about $3.7 billion in lost revenue over 10 years.
      With the nation’s debt at $21 billion, Senate Majority Leader insists any tax cuts would have to be revenue neutral
      But Hurricane Harvey has something to say about tax cuts. Its cost is estimated at $90 billion.
       All that can be said about this issue is the Street is hoping it happens, and buying stocks in anticipation it will.  Passage won’t be easy – too many hurdles. For now there is too little information.    
      This bull market is 101 months old.  The S&P 500 was up 240% before Trump’s election and 8.1% since, some of that due to good Q2 earnings, most due to expectations of the big stimulus
      This bull is more than three times the average going back 60 years, and it is fundamentally overvalued.  The S&P 500 sells at 17.4 timed “forward” earnings compared to a ten year average of 14.
      Our economic expansion is 98 months old, well in excess of the average of 62 months for 9 cycles going back 60 years to 1957. While it hasn’t overheated, it is getting up in years.
       President Trump and certain members present and past, are under intense investigation for serious wrongdoing before, during and after the 2016 election.  I think Trump will be gone in two years.  If Vice President Pence is clean, he will take over and the adversity of Trump’s departure reduced. If Pence is forced out, it could be an utter disaster.
      How much to sell is a personal decision based on one’s tolerance for risk. For some, selling is not a consideration, since they plan to ride out any correction/bear market. Nimble traders can navigate the swings, others may take precautions just in case the market plunges. My point here is to trace out the options, to make readers aware of the risks and let them decide what is best for them.
       This is especially important if the market heads higher.  So far, the Street is in buy mode, but someone is selling into their buying.
        If I am wrong, I will admit it as soon as I become aware of it. That is a lesson one learns early on in this business.
TODAY
        Talk of tax cuts should push stocks higher, as the market traces out a saw-toothed pattern of uncertainty. The second of three GDP estimates put its annual growth at 3.0%. The ADP Employment Change report on Wednesday estimates 237,000 new hires for August, both good numbers, though the Employment Situation report will need to confirm that at 8:30 Friday.
         This can be re-assuring for investors, however, bear markets historically turn down ahead of economic contractions, which is one reason investors get blindsided by market turndowns.
          Another reason for missing a top is the big picture. Looking back at some point in the future after a bear market has savaged portfolios, investors will lament that “all the signs were there of a market top,” including a dysfunctional administration, aging bull market and economic recovery and serious internal problems – polarization, unaffordable housing, unemployment among unskilled workers, and a recession that the Fed cannot quickly fix.
         September/October can be treacherous months in the market – Beware !   Expect a spike up today. The key will be, can it hold ?

RECAP:
      With the DJIA at 22,024 and the S&P 500 at 2,468 on August 17, I headlined “Catharsis Needed – Raise Cash !”
      On August 24, I headlined, “Risk Increases – Healthy Cash Reserve a  Must” and gave my reasons along with ”What Could Change My Mind.” (see below).   Tuesday, I headlined, “SELL,” giving a host of reasons, in brief – the market is overvalued and President Trump is a human wrecking ball, based on what I have heard him say and how he has acted.

       If I am premature, it is because the Street still expects a massive stimulus and keeps buying stocks in anticipation of corporate benefits.
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SUPPORT “today”:DJIA:21,842;S&P 500:2,451; Nasdaq Comp.:6,341
RESISTANCE “today” DJIA:21,937;S&P 500:2,464;Nasdaq Comp.:6,379

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I WILL RETAIN THE FOLLOWING FOR A WHILE FOR NEW READERS
DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.  
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

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       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                    
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.                                                                                                                                                                                                             

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SUPPORT “today”:DJIA:21,812;S&P 500:2,446; Nasdaq Comp.:6,259
RESISTANCE “today” DJIA:21,901;S&P 500:2,452;Nasdaq Comp.:6,310

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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UNITY !  I hope President Trump is capable of seeing the value of unity of people of all colors in response to the flooding in Houston and outlying areas. If it weren’t heartbreaking it would be beautiful.   Why Trump’s divisiveness ?  What is gained by pitting one person against another, which gives Trump so much pleasure ? Sick dude.
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NO !  two-thirds of Hurricane Sandy’s emergency federal aid did not include “pork” as Sen. Ted Cruz, R-Texas told NBC’s Katy Tur Monday Aug. 28. Sandy’s damage caused New Jersey and parts of New York, New England and North Carolina up to $65 billion in 2012. Before  Harvey even hit this week, Texas senators Cruz and John Cornyn pressed President Trump to approve disaster relief for the imminent hurricane in order to speed up the process. Both Cruz and Cronyn voted against providing aid for Sandy, as well as 18 other Texas representatives and senators.  Lawmakers from New Jersey and New York have been quick to back aid to Texas for Harvey.
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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PARDON ME,
but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      This week, Trump is expected to stomp in Missouri to rally support for  tax reform, including middle-class tax cuts,  and a simpler tax code.
Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship – a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      As of Friday, right winger and Breitbart grad, Sebastian Gorka was gone,  No more pathetic TV appearances hyping Trump.  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter ? 

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scott free, giving them a fall back position.

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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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*”potholes and sinkholes” Bloomberg – Treyz – Veda Partners

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tug of War Within a Trading Range

Investor’s first read – Daily edge before the open
DJIA: 21,865
S&P 500: 2,446
Nasdaq  Comp.:6,301
Russell 2000: 1,383
Wednesday,  Aug.  30, 2017   9:06 a.m.
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The market rebounded yesterday to recoup early losses, as concerns about North Korea’s Missile launch eased. The Street is still using any weakness, even in face of Texas’ demise, to buy.  But there are now sellers out there at higher prices – a tug of war within a trading range..
      With the DJIA at 22,024 and the S&P 500 at 2,468 on August 17, I headlined “Catharsis Needed – Raise Cash !”
      On August 24, I headlined, “Risk Increases – Healthy Cash Reserve a  Must” and gave my reasons along with ”What Could Change My Mind.” (see below).   Tuesday, I headlined, “SELL,” giving a host of reasons, in brief – the market is overvalued and President Trump is a human wrecking ball, based on what I have heard him say and how he has acted.

       If I am premature, it is because the Street still expects a massive stimulus and keeps buying. President Trump will be pitching the merits of tax cuts in coming weeks, though without specifics.  The big spend on infrastructure promised by this administration would be an easier sell with deficit hawks in Congress now than before Harvey, so, that may be revived. Whatever happens will be watered down considerably.
      This bull market is 101 months old.  The S&P 500 was up 240% before Trump’s election and 8.1% since, some of that due to good Q2 earnings, most due to expectations of the big stimulus
      This bull is more than three times the average going back 60 years, and it is fundamentally overvalued.  The S&P 500 sells at 17.4 timed “forward” earnings compared to a ten year average of 14.
      Our economic expansion is 98 months old, well in excess of the average of 62 months for 9 cycles going back 60 years to 1957. While it hasn’t overheated, it is getting up in years.
       President Trump and certain members present and past, are under intense investigation for serious wrongdoing before, during and after the 2016 election.  I think Trump will be gone in two years.  If Vice President Pence is clean, he will take over and the adversity of Trump’s departure reduced. If Pence is forced out, it could be an utter disaster.
      How much to sell is a personal decision based on one’s tolerance for risk. For some, selling is not a consideration, since they plan to ride out any correction/bear market. Nimble traders can navigate the swings, others may take precautions just in case the market plunges. My point here is to trace out the options, to make readers aware of the risks and let them decide what is best for them.
       This is especially important if the market heads higher.  So far, the Street is in buy mode, but someone is selling into their buying.
        If I am wrong, I will admit it as soon as I become aware of it. That is a lesson one learns early on in this business.
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I WILL RETAIN THE FOLLOWING FOR A WHILE FOR NEW READERS
DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.  
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

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       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                    
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.                                                                                                                                                                                                             

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SUPPORT “today”:DJIA:21,812;S&P 500:2,446; Nasdaq Comp.:6,259
RESISTANCE “today” DJIA:21,901;S&P 500:2,452;Nasdaq Comp.:6,310

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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UNITY !  I hope President Trump is capable of seeing the value of unity of people of all colors in response to the flooding in Houston and outlying areas. If it weren’t heartbreaking it would be beautiful.   Why Trump’s divisiveness ?  What is gained by pitting one person against another, which gives Trump so much pleasure ? Sick dude.
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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PARDON ME,
but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      This week, Trump is expected to stomp in Missouri to rally support for  tax reform, including middle-class tax cuts,  and a simpler tax code.
Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship – a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      As of Friday, right winger and Breitbart grad, Sebastian Gorka was gone,  No more pathetic TV appearances hyping Trump.  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter ? 

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scott free, giving them a fall back position.

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CLOSET BIGOTS

     Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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*”potholes and sinkholes” Bloomberg – Treyz – Veda Partners

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sell Sell Sell Sell Sell Sell Sell Sell Sell

Investor’s first read – Daily edge before the open
DJIA: 21,808
S&P 500: 2,444
Nasdaq  Comp6,283.:
Russell 2000: 1,382
Tuesday,  Aug.  29, 2017   6:46 a.m.
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TODAY:

      This is a phony bull market, vastly overvalued and driven by ”hope,” hope that Congress can pull off meaningful tax cuts, further deregulate  industries that can’t wait to gouge the public, and coerce Congress to spend big bucks on an infrastructure given C and D ratings by the American Society of Civil  Engineers.

      This is a phony Presidency, disgraced by relentless lying, promises that have no chance of being fulfilled, and a delight in dividing, not uniting America.
      Our House and Senate have been hobbled for 7 years by  Congressional anarchists intent on dismembering every compassionate  and constructive achievement  in the last 60 years.
      Cowering to the powers on Wall Street, Fed policy in recent years has overstayed on low interest rates, failing to develop an arsenal of tools to rescue our nation from a recession, worse yet a depression.
      This phony bull market, is driven by over-reliance on computer algorithms rather than human thinking to make decisions. It runs on cruise control with a distinct buy bias.  Overvalued before the November elections, it is overvalued more so now, simply because the Street’s decision makers were unable to see through a very transparent Presidential candidate and realize he is a human wrecking ball, a narcissist of the worst kind, a divider, immoral, and unfit for the Presidency.
      The Street was conned, because people no longer take time to THINK things through.  Why bother – they got their algo that knows everything. There is a price to pay for such arrogance, and this time around, it may be huge.
      As a nation, we function best when united.
      Naïve investors and businessmen cheer the deregulation of the financial community, measures that are designed to prevent Great Recession/Great Bear Market III.  They welcome with open arms checks and balances and measures that that ensure safe working conditions, living and food conditions.   Foolish ! Stupid ! Selfish !
      Highly qualified analysts, people with decades of savvy, were released years ago, replaced by an algo that a mathematician assured everyone would be flawless.  Flash crashes along the way were a warning that too much “think-alike” by too many analysts/money managers does not ensure a fair and orderly market. 
      One does not have to look further than corporate earnings to appreciate the insanity of stock valuation.
       It’s Derby Day every quarter when earnings are released and it’s anyone’s guess what will happen.  A company can “beat” Street projections, yet its stock get crushed, because the “beat” wasn’t enough for the Street which dumped the stock for a 10% loss – and why ? Because the company’s good job wasn’t good enough.  This nonsense just highlights how ridiculous things have gotten on Wall Street.
      That spells “VULNERABLE”  –

      That spells – “FLASH CRASH” a straight down plunge as all those algos switch to sell. 
      The major oversight here is that these computers could not be programmed to account for Donald Trump and the perilous road he would take America down. But, in reality, he did not hide who he was during the campaign.
      Failure to find work is blamed on the government, when in reality ease-of-entry jobs are being taken over by automation, artificial intelligence and the computer.  They are GONE !   Job openings are out there, but require special skills.
      Low interest rates deprive consumers of the income they once received on fixed income.  Homes and apartments have become unaffordable.  All these things are nibbling away at an economy that appears to be healthy.
      We are vulnerable, and the Trump administration and Congress are incapable of heading off a bear market and another Great Recession.
      I would like to be wrong about this. I’d much prefer to be screaming “buy,” but any rally from here delays the inevitable.
      And yes, another leg up can occur, fueled by promises for tax cuts, etc., more lies and manipulation.
      With the DJIA at 22,024 and the S&P 500 at 2,468 on August 17, I headlined “Catharsis Needed – Raise Cash !”
      On August 24, I headlined, “Risk Increases – Healthy Cash Reserve a  Must” and gave my reasons along with ”What Could Change My Mind.” (see below).    
      How much to sell is a personal decision based on one’s tolerance for risk.
For some, selling is not a consideration, since they plan to ride out any correction/bear market. Nimble traders can navigate the swings, others may take precautions just in case the market does plunge. My point here is to trace out the options, to make readers aware of the risks and let them decide what is best for them.
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I WILL RETAIN THE FOLLOWING FOR A WHILE FOR NEW READERS
DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.  
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

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       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                    
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.                                                                                                                                                                                                             

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SUPPORT “today”:DJIA:21,617;S&P 500:2,427; Nasdaq Comp.:6,227
RESISTANCE “today” DJIA:21,826;S&P 500:2,446;Nasdaq Comp.:6,287

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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PARDON ME,
but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      This week, Trump is expected to stomp in Missouri to rally support for  tax reform, including middle-class tax cuts,  and a simpler tax code.
Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship – a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      As of Friday, right winger and Breitbart grad, Sebastian Gorka was gone,  No more pathetic TV appearances hyping Trump.  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter ? 

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
 


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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

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CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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*”potholes and sinkholes” Bloomberg – Treyz – Veda Partners

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax Reform Talk – Few Details – More Bluster ?

Investor’s first read – Daily edge before the open
DJIA: 21,813
S&P 500:2,443
Nasdaq  Comp.:6,265
Russell 2000: 1,337
Monday,  Aug.  28, 2017   9:09 a.m.
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TODAY:
      As expected, another rally failure.
Friday’s market jumped at the open Friday, but closed unchanged for the day. Not only did the rally at the open fail, but another during the day stalled. 
      Friday, I noted that corrections are usually preceded by three or four rally failures before developing, however anything can happen in this environment. President Trump plans to talk tax reform in Trump-friendly Missouri this week. That may change due to the catastrophic flooding in Texas.
      Even so, the Street’s hopes may be buoyed in coming weeks with talk of tax cuts.  The fact most of what Trump will say is regurgitated bluster from the past with few details should temper  optimism. (see below “Tax reform – potholes and sinkholes”)
      I don’t expect Congress to permit default, but press coverage could stir doubts, leading to investor worries.
      Factset.com makes the  point that  despite the fact  73% of the S&P 500 companies  beat Street’s estimates for a  10.2% gain in Q2, the market’s response was disappointing.  This confirms my suspicion that the BIG money used the news of good earnings to sell.
      Expect another jump in prices at the open. Again, a rally failure would indicate sellers await higher prices. This is a dangerous market with the risk of downside far exceeding the potential for upside.
      While Trump  inherited a big bull market (plus 240%) and an expanding economy, both are 8 years old, well beyond the norm.  Based on promises of a huge stimulus, the S&P 500 added another 8.4% to the bull market, but it was overvalued when he took office and even more so today.
       Risks of a correction are high. The Street stubbornly hangs tough in face of a host  of reasons to curtail buying and increase selling.
       When that changes, the impact can be dramatic.

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I WILL RETAIN THE FOLLOWING FOR A WHILE FOR NEW READERS
DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.  
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

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       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                   
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.                                                                                                                                                                                                             

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SUPPORT “today”:DJIA:;S&P 500:; Nasdaq Comp.:
RESISTANCE “today” DJIA:;S&P 500:;Nasdaq Comp.:

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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WOULD ANYONE WANT their spouse to lie repeatedly ?  their child ? mother ? father ?  minister, child’s teacher ? coach ? employer ?  IF NOT, why would they support President Trump who is on record with telling 4.5 lies a day, 1,000 lies since inauguration on January 20 ?
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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PARDON ME,
but  giving former Sheriff Joe Arpaio a pardon after being convicted  by a federal judge for  contempt  of court  suggests, Trump won’t hesitate to pardon anyone including himself who becomes  liable as a result of finding by the Mueller investigations and/or the House and senate committee investigations.  Presidents pardon all kinds of people, none ever was in a position to give a “get out of jail free” card to people guilty of rigging an election or committing serious financial crimes.
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TAX REFORM  – “Potholes and sinkholes”*
      This week, Trump is expected to stomp in Missouri to rally support for  tax reform, including middle-class tax cuts,  and a simpler tax code.
Few specifics are mentioned. The border-adjusted tax is off the table. The mortgage, charity and retirement deductions are safe. The big question is whether the tax cuts would be temporary or permanent. If th latter, the cuts may not increase the deficit.
An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship – a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
      As of Friday, right winger and Breitbart grad, Sebastian Gorka was gone,  No more pathetic TV appearances hyping Trump.  Gorka’s  exit closely follows the departure of Steve Bannon, another  Breitfart grad,  hopefully leading to the firing  of Stephen Miller, a brash, caustic right wing extremist and Breitbart supporter ? 

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
 


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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

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CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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*”potholes and sinkholes” Bloomberg – Treyz – Veda Partners

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September – To Be the Ugliest Month of the Year ?

Investor’s first read Daily edge before the open
DJIA: 21,783
S&P 500:2,438
Nasdaq  Comp.6,271:
Russell 2000: 1,373
Friday,  Aug  25, 2017   9:18 a.m.
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TODAY:

        Both New Home Sales and Existing Home Sales for July were down sharply, the former down 9.4%, the latter down1.3%. The problem is twofold with little hope for change.  Lack of inventory for one, high prices for another.  Not good ! 
        Fed Chair, Janet Yellen speaks today at 10 o’clock at the FRB Jackson Hole symposium.  Wall Street bulls are hoping for her to cut some slack on rate increases going forward and that may trigger a brief surge in stock prices.  Inflation is zilch and the economy is sputtering, making  a policy of tightening  a tough case to justify. However, Yellen is expected to refer to financial stability in order to justify a gradual unwinding of the Fed’s $4.5 trillion balance sheet. 
        Yesterday’s bounce in the first hour of trading was short lived, suggesting sellers were waiting to dump stocks on any strength.  While a brief Yellen rally may bump stocks up after 10 o’clock, the market will still have overhead supply to deal with as angst over a failure to raise the debt ceiling begin to take center stage.
          Bad news for Trump continues to dribble out from the House, Senate and Mueller investigations, raising the possibility of pressure for his removal from office and a delay in the Republican stimulus.  The latter is the high risk factor.  If the Street could get rid of Trump without jeopardizing the stimulus, they would jump on it.
          The market’s major problem with a Trump scandal or his removal would come if it is dragged out. A quick removal would only impact the market for a short period of time, maybe only hours.  Now, if Saint  Pence goes down too, that is something else.
          Corrections (or bear markets)  tend to trace out three or four rally failures before plunging, so we could have one or two more bumps up before heading down.  This negative scenario could change for the reasons listed below.  The Street desperately wants the party to continue but will bail out if cracks in the foundation widen. Corrections tend to occur so quickly these days, investors must  take precautions in advance.  If the worst fears don’t develop, they can work their way back in.  That beats a 10% – 15% mugging.
          Try to picture a long line of suits looking up and down the line to see if anyone else is breaking ranks.  All are leaning forward, even lurching a bit. If one of the big boys breaks and sells in size, others will break, as well.  No one breaks, and it’s business as usual. If they do, it could get ugly. Most of them key on the same indicators, so most get signals at the same time.
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I WILL RETAIN THE FOLLOWING FOR A WHILE FOR NEW READERS
DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.  
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

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       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                    
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.                                                                                                                                                                                                             

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
SUPPORT “today”:DJIA:21,719;S&P 500:2,431; Nasdaq Comp.:6,242
RESISTANCE “today” DJIA:21,826;S&P 500:2,444;Nasdaq Comp.:6,286

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
 
POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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NO ONE CONCERNED ABOUT MUELLER ANY MORE ?
      
Whether the emperor is wearing clothes or not wearing clothes is not the point.  Talk in the media of Trump running for re-election in 2020 takes bizarre to new highs.  We will be lucky to survive this presidency. None of the media is prefacing its projection of Trump’s  immediate future with speculation about the findings of the Mueller investigation.
       Conclusions arising out of the investigation may not give Congress grounds for impeachment, and even if it did, there is no assurance Congress would do so, unless Trump is such a huge liability he jeopardizes control of the House and Senate.
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship – a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
Friday, news came confirming my March  blog that Bannon was ousted, though a bit ahead of schedule. Why not Stephen Miller, another caustic right wing extremist and Breitbart supporter ?  TRUMP now  a short-timer ?  Still think he’ll be by 2019.

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
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TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                      
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

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     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

…………………………………………………………………………………………..
DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPERCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Increases – Healthy Cash Reserve a “Must”

Investor’s first read – Daily edge before the open
DJIA: 21,812
S&P 500:2,444
Nasdaq  Comp.:6,2787
Russell 2000: 1,369
Thursday,  Aug  24, 2017   9:06 a.m.
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DANGER SIGNS:

       This market can plunge at any point.  It is vulnerable for the following reasons.  It may get another push up as a result of optimistic comments coming out of the Jackson Hole economic symposium, or renewed hope that tax reform can be crafted before year end.
        While I don’t think President Trump would veto the spending bill if it does not include funding for his wall, there will be heated debate on that issue and others before the September debt ceiling deadline.
        Overvalued markets continue in a state of vulnerability until something triggers a correction.  We are looking at the prospect for a 12% + correction, possibly a bear market (20%+) depending on how dysfunctional the Trump administration and Congress gets. September should be rough, in fact, the next 12 months should be divisive and turbulent.
        Especially disturbing is the possibility of a flash crash type plunge, a straight down 10% – 15% plunge that gives no one a chance to raise cash.  Most institutions are in a automatic pilot buy mode.  All would get a sell signal at the same time, ergo no buying support and heavy selling.
        The downside here is far greater than the upside. For that reason, a 70% cash position is warranted. Of course that depends on one’s tolerance for risk.  My point is preserve capital for less precarious and uncertain times.
>this market ran into selling when good Q2 earnings were announced

>the transportation index is so much weaker than the industrials
>The market was overvalued before the November election, much more so now.
>at 98 months, our economic expansion exceeds the average of  62 months for 9 cycles going back 60 years to 1957. Eight of the last nine recessions have occurred under a Republican President.
>at 101 months, this bull market is more than 3 times longer than the average of 30 months going back to 1957. To date, its gain of 267% is more than 3 times the average bull gain since 1957 (82%).
>decisions on Wall Street are mostly based on bullish algorithms. I doubt any are programmed to factor in President Trump’s divisiveness, unpredictability, and unsuitability for the office he holds. If most switch to a more cautious buying strategy, worse yet to a SELL, the market will get hammered.
>the public is still oblivious to the dangers of the dysfunction of this administration. Congress refuses to accept  reality. The New York Times has documented more than 1,000 falsehoods  by President Trump since taking office January 20. Is anyone “thinking” ?  If so, what are they thinking ?
>as a nation, we are as divided as during the Vietnam War, but in a worse way. Then it was Americans vs. the U.S. government.  Now it is American vs. American, and the biggest contributor is President Trump. Confidence drives the economy and stock market, not divisiveness.
>no one on Wall Street, in the media, or many of the blogs is talking MUELLER.  The outcome of the Mueller investigation could be the worst scandal ever.   
      How big is the elephant in the room. Why do so few see him ? 
>Even with control of the White House, Congress, the Supreme Court and Fox News, the Republicans cannot legislate. With Bannon’s exit and position of power at Breitbart News, the government will become even more divided and dysfunctional.
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WHAT COULD CHANGE MY MIND ?
>Trump must go !  He will not change, grow in the job, etc. – an absolute human wrecking ball.  He must be impeached, removed from office by way of Section 4 of the 25th Amendment, or forced to resign.
     The latter is most likely, possibly as part of a deal struck with Special Counsel Robert Mueller to keep him and/or people close to him out of jail.
>If the outcome of the Mueller investigation comes up with nothing of significance, the market will jump sharply but then sell off, because we would  still be left with Trump.
>If, somehow, Congress can pull off tax reform, significant deregulation and a big spend on the infrastructure within a year, the major correction or bull market top I am warning about here will be delayed. Just the perception it can be done can help stabilize it.
>if Trump is suddenly removed from office the market would plunge briefly then rebound.

……………………………………………………………………………….
       This is one of those situations that would be so 20-20 visible in hindsight.  All the signs were there, people will ask why didn’t they see it ?
       One of the lessons I learned early on many years ago is “it is better to be wrong with money in your pocket, than in stocks.” It can take years to recover losses sustained in a bear market.  A 50% loss takes a double to recover from, and doubles are hard to pull off. A 50% loss occurred in the 1973 – 1974 and 2007 – 2009 bear markets.
        It is hard to sell at the top when everything look great. I is equally hard to buy at the bottom when all the news is bad. In late stage bull markets, it is wise to have a cash reserve.                                                                                                                                                    
        This is déjà vu for me taking me back to February and early March 2009 when I urgently blogged for readers to get ready to buy at a time I was fully aware no one would listen – after a 50% drop, few had any interest in my March 10, 2009 Special Bulletin “BUY” the day the DJIA hit its bear market low of  6,440.
       There is a difference between saying something and putting it in print. The latter cannot be denied. If wrong, it cuts deeply.
        Bull markets tend to go to slightly greater extremes than this one in terms of rank speculation and public participation.
TODAY

        The market will jump at the open, but there is no room for a rally failure. That would indicate sellers are using any strength to unload positions. The Street will be looking to the Jackson Hole economic symposium for a boost.  Talk of a 15% corporate tax rate has resurfaced. If it looks like it has a chance, a correction will be delayed !  In this divisive environment, that’s a big “if.”
                                                                                                                                                                                                       

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SUPPORT “today”:DJIA:21,756;S&P 500:2,437; Nasdaq Comp.:6,271
RESISTANCE “today” DJIA:21,877;S&P 500:2,452;Nasdaq Comp.:6,286

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential 21,856
 
POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NO ONE CONCERNED ABOUT MUELLER ANY MORE ?
       Whether the emperor is wearing clothes or not wearing clothes is not the point.  Talk in the media of Trump running for re-election in 2020 takes bizarre to new highs.  We will be lucky to survive this presidency. None of the media is prefacing its projection of Trump’s  immediate future with speculation about the findings of the Mueller investigation.
       Conclusions arising out of the investigation may not give Congress grounds for impeachment, and even if it did, there is no assurance Congress would do so, unless Trump is such a huge liability he jeopardizes control of the House and Senate.
……………………………………………………………………………………………………………………………………………………………………………….
APHGHANISTAN: Last night’s speech about Afghanistan was more about trying to look presidential, than setting a new military strategy.
………………………………………………………………………………………………………………………………………………………………………………
PHONEIX:
Tonight’s rally may wipe out anything he accomplished last night, as Trump addresses a rally at the Convention Center. It could get hot, especially if he announces his pardon of Joe Arpaio, former sheriff of Maricopa County, recently convicted of criminal contempt for racial profiling. All the protest groups will be there. Is this the one where shots are fired ?  
……………………………………………………………………………………………………………………………………………………………………………………………………
CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
………………………………………………………………………………………………………………………………………………………………………

Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
Friday, news came confirming my March  blog that Bannon was ousted, though a bit ahead of schedule. Why not Stephen Miller, another caustic right wing extremist and Breitbart supporter ?  TRUMP now  a short-timer ?  Still think he’ll be by 2019.

………………………………………………………………………………………………………………………………………………………………………………………………….
THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
…………………………………………………………………………………………..
ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
………………………………………………………………………………………..
LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
…………………………………………………………………………………….
The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
…………………………………………………………………………………………
917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
……………………………………………………………………………………..
TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                       
…………………………………………………………………………………..
GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
……………………………………………………………………………
DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
…………………………………………………………………………….
DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

……………………………………………………………………..
     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
……………………………………………………………………….
ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

…………………………………………………………………………………………..
TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
…………………………………………………………………………………………….
DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

……………………………………………………………………………………………...
WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
………………………………………………………………………………………
WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
………………………………………………………………………………………
GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
…………………………………………………………………………………………..
TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

……………………………………………………………………………………
Trump, Bannon Gone By 2019  (my blog 3/21/2017)

………………………………………………………………………..

TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
………………………………………………………………………..

W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
…………………………………………………………………………….
  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
……………………………………………………………………………………………

ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
…………………………………………………………………..
     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
………………………………………………………………………
IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
 

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Again: Catharsis Needed: Raise Cash

Investor’s first read – Daily edge before the open
DJIA: 21,899
S&P 500:2,452
Nasdaq  Comp.:6,297
Russell 2000: 1,371
Wednesday,  Aug  23, 2017   9:18 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

      Institutions continued to use the market’s two week weakness to buy, possibly triggered by  rumors that Republican Congress would be able to pull off tax reform after all.
      The rebound Monday and Tuesday takes the market up close to  my August 17 blog, “Catharsis Needed – Raise Cash.”
       A part of this rally was due to institutions scrambling to buy blue chips before others ran their price up, part was short covering.
       Without ground breaking news  like a Trump resignation or more assurance the Republican stimulus will survive all the disarray in the Trump administration, the market will encounter increased selling at higher levels.
       Expect speeches at the Aug. 24 – 26, Jackson Hole Economic Symposium, “Fostering a Dynamic Global Economy” to produce some bullish projections.
       Even so, the Street is still confronted with the prospect that the huge stimulus promised by the Trump administration may be delayed, not happen to the extent expected, or may not happen at all.
       Having run an already overvalued market up further, the Street must decide what to do now.  The major market averages topped out on August 8. While the sharp rebound this week offers hope for an extension of the bull market, the market will encounter selling  as prices push higher.
       I am most concerned by the fractured governance in our country and the bizarre behavior of President Trump. If he doesn’t take himself down, Congress will, if Congress doesn’t, Special Counsel Robert Mueller will. 
       We have a narcissist for president, a pathological liar who has made more than 1,000 false statements since taking office. This is not false news, it is all documented.
       The nation is divided, The Republican Party is divided. With Steve Bannon’s departure as Trump’s chief strategist and return to Brietbart News, the party will be even more divided.  Trump is openly duking it out with Senate Majority Leader, Mitch McConnell, dividing the party even more.
        So, how will anything get done ?
        Cash is an investment in times like this. It preserves net worth and enables investors to buy in at lower prices in the event of a major crunch.     
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

SUPPORT “today”:DJIA:21,917;S&P 500:2,436; Nasdaq Comp.:6,257
RESISTANCE “today” DJIA:21,938;S&P 500:2,457;Nasdaq Comp.:6,297

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential is 29,926
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
NO ONE CONCERNED ABOUT MUELLER ANY MORE ?
      
Whether the emperor is wearing clothes or not wearing clothes is not the point.  Talk in the media of Trump running for re-election in 2020 takes bizarre to new highs.  We will be lucky to survive this presidency. None of the media is prefacing its projection of Trump’s  immediate future with speculation about the findings of the Mueller investigation.
       Conclusions arising out of the investigation may not give Congress grounds for impeachment, and even if it did, there is no assurance Congress would do so, unless Trump is such a huge liability he jeopardizes control of the House and Senate.
……………………………………………………………………………………………………………………………………………………………………………….
APHGHANISTAN: Last night’s speech about Afghanistan was more about trying to look presidential, than setting a new military strategy.
………………………………………………………………………………………………………………………………………………………………………………
PHONEIX:
Tonight’s rally may wipe out anything he accomplished last night, as Trump addresses a rally at the Convention Center. It could get hot, especially if he announces his pardon of Joe Arpaio, former sheriff of Maricopa County, recently convicted of criminal contempt for racial profiling. All the protest groups will be there. Is this the one where shots are fired ?  
……………………………………………………………………………………………………………………………………………………………………………………………………
CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
………………………………………………………………………………………………………………………………………………………………………

Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
Friday, news came confirming my March  blog that Bannon was ousted, though a bit ahead of schedule. Why not Stephen Miller, another caustic right wing extremist and Breitbart supporter ?  TRUMP now  a short-timer ?  Still think he’ll be by 2019.

………………………………………………………………………………………………………………………………………………………………………………………………….
THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
…………………………………………………………………………………………..
ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
………………………………………………………………………………………..
LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
…………………………………………………………………………………….
The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
…………………………………………………………………………………………
917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
……………………………………………………………………………………..
TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                       
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
……………………………………………………………………………
DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
…………………………………………………………………………….
DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
……………………………………………………………………………………………..
WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

……………………………………………………………………..
     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
……………………………………………………………………….
ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

…………………………………………………………………………………………..
TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
…………………………………………………………………………………………….
DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

……………………………………………………………………………………………...
WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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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.

 

 

 

 

 

 

 

 

 

 

 

 

Disarray, Confusion, Tension, Fear, Divisiveness

Investor’s first read – Daily edge before the open
DJIA: 21,703
S&P 500:2,428

Nasdaq  Comp.:6,213
Russell 2000: 1,356
Tuesday,  Aug  22, 2017   9:08 a.m.
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      CONFIDENCE
, is the driver of bull markets. The blundering at the highest levels of our government hardly breeds confidence. It is only a matter of time when this void will filter through the economy, impacting retail spending and corporate decisions.
      It’s very hard to convince investors to buy at bear market bottoms and equally hard to convince them to sell at bull market tops.
      What can be done is to do “some” buying near bottoms when everyone is too scared to buy and do some selling near tops when investors are making money and expect to make even more in the future.
TODAY
      As expected, institutions stepped in yesterday to pick up stocks that  slipped last week, but the buying was unenthusiastic. That buying is there at the open today, but there will be sellers as it attempts to recoup losses over the last two weeks.
      One plus for the market may be that the economy  is mixed enough to discourage further Fed tightening in coming months, maybe a rate bump in December and some trimming of its balance sheet.
      There is little now to trigger aggressive buying. Q2 earnings were up 10.2%, but institutions appeared to use the news to sell. September brings the debt ceiling debate. While I can’t see default, I can see angst leading up to the September 30 deadline.
      The great stimulus  of 2017 may not happen soon, and possibly not in the magnitude the Street hopes.
      Barring unexpected good news, I believe we are in a down market, which could become a bear market if confidence in the government continues to slide.
      This is a dangerous market –  a huge change at the top is needed.

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SUPPORT “today”:DJIA:21,624;S&P 500:2,419; Nasdaq Comp.:6,181
RESISTANCE “today” DJIA:21,773;S&P 500:2,439;Nasdaq Comp.:6,238

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  Aug 19, 2017,  a reasonable risk is 21,547 extreme risk is 21,337. Near-term upside potential is 29,926
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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NO ONE CONCERNED ABOUT MUELLER ANY MORE ?
      
Whether the emperor is wearing clothes or not wearing clothes is not the point.  Talk in the media of Trump running for re-election in 2020 takes bizarre to new highs.  We will be lucky to survive this presidency. None of the media is prefacing its projection of Trump’s  immediate future with speculation about the findings of the Mueller investigation.
       Conclusions arising out of the investigation may not give Congress grounds for impeachment, and even if it did, there is no assurance Congress would do so, unless Trump is such a huge liability he jeopardizes control of the House and Senate.
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APHGHANISTAN: Last night’s speech about Afghanistan was more about trying to look presidential, than setting a new military strategy.
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PHONEIX:
Tonight’s rally may wipe out anything he accomplished last night, as Trump addresses a rally at the Convention Center. It could get hot, especially if he announces his pardon of Joe Arpaio, former sheriff of Maricopa County, recently convicted of criminal contempt for racial profiling. All the protest groups will be there. Is this the one where shots are fired ?   
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
Friday, news came confirming my March  blog that Bannon was ousted, though a bit ahead of schedule. Why not Stephen Miller, another caustic right wing extremist and Breitbart supporter ?  TRUMP now  a short-timer ?  Still think he’ll be by 2019.

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
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TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                       
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PROBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.

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     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

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TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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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.

 

 

 

 

 

 

 

 

 

 

 

More Division – Bad for Stock Market

Investor’s first read – Daily edge before the open
DJIA: 21,674
S&P 500:2,420
Nasdaq  Comp.:6,193
Russell 2000: 1,349
Monday,  Aug  21, 2017   9:08 a.m.
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The announcement of Bannon’s ouster brought cheers on the floor of the NYSE, though it did not trigger heavy buying.
      The Street wants its massive stimulus, but realizes President Trump’s unprecedented bizarre behavior jeopardizes its passage.
      The nation is divided with little chance of being united with Trump in office who craves divisiveness. He is increasingly becoming isolated as leaders from his party, the business world, and the military distance themselves from him.
      This smacks of doom for his presidency, and spells trouble for the stock market and economy.
      The ouster of Trump’s strategic adviser, Steve Bannon, means his base of support will become sharply divided.
      Then there is the Mueller investigation which by my calculations  will take Trump and a host of people close to him down.
      All this weighs on CONFIDENCE, the driver of bull markets.
      Corporate stock repurchases and hot money have extended  Obama’s 240% bull market  (March 6, 2009 – January 20, 2017) another 8 percentage points, the 2nd biggest bull market on record. What’s more, this bull has run three times longer than the average. Borrowings from brokers (margin debt) is at record highs, the stock market is fundamentally very overvalued.
      It’s very hard to convince investors to buy at bear market bottoms and equally hard to convince them to sell at bull market tops.
      What can be done is to do “some” buying near bottoms when everyone is too scared to buy and do some selling near tops when investors are making money and expect to make even more in the future.
TODAY
       Institutions may do some buying after last week’s crunch. Any rally here must be studied for intensity.  No room for a rally failure.
        However, I expect more downside in coming weeks. If institutions decide their “buy at the market/buy on dips” strategy is wrong they will back away from the market. That alone will cause a drop in prices.  If institutions need to increase their cash reserve, they will do some selling. If they get scared, they will dump stocks.
       I am looking for reasons to be positive, but can’t find any encouraging enough to be bullish.  We have a very dangerous narcissist  in the office of the Presidency who is a human wrecking ball.
       Some members of Congress are considering a bi-partisan effort to get legislation passed in spite of Trump’s blundering. Lots of luck on that. The Freedom Caucus (do nothing Congress) will stand in the way of any ideas that are not 100% theirs.

        Odds of a 500 – 800-point, one-day plunge in the blue chip DJIA are increasing with more downside into late September.
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SUPPORT “today”:DJIA:21,567;S&P 500:2,412; Nasdaq Comp.:6,181
RESISTANCE “today” DJIA:21,742;S&P 500:2,436;Nasdaq Comp.:6,243

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CORPORATE EARNINGS
(updated Aug. 18 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.2%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  June 15, 2017,  a reasonable risk is 21,876 extreme risk is 21,713. Near-term upside potential is 22,476.
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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Trump, Bannon Gone By 2019  (Investor’s first read:  3/21/2017)
Friday, news came confirming my March  blog that Bannon was ousted, though a bit ahead of schedule. Why not Stephen Miller, another caustic right wing extremist and Breitbart supporter ?  TRUMP now  a short-timer ?  Still think he’ll be by 2019.

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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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ANTIFA (Anti-Fascist Action
) is a organization dedicated to confront the Alt-Right/ white supremacist movement, and has actually been around for a long time. While antifa is not limited to the United States, it has been most effective here where white supremacy, racism, anti-semitism, and fascism is more prevalent. Most of its activities are nonviolent, but physical violence is warranted to reject these groups. Their ranks include people of many professions and cultures. Its ranks have grown rapidly, especially with Trump’s inauguration.
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
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TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                      
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White Nationalism was represented at the highest level in the White House by Steve Bannon, co-founder of Breitfart News, a supporter of Nazis, white supremacists, KKK, is Trump’s chief strategist, Stephen Miller, a nationalist, also close to Breitbart and rumored to become the White House’s communications director, and Sebastion Gorka, deputy assistant to Trump,  worked for Bannon at Breitfart.
     On August 18, Bannon either was fired or resigned in face of Trump’s Charlottesville outrageous siding with white nationalists.
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PORBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.
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EVER WONDER WHY THE NRA AND RIGHT WING EXTREMISTS HAVE PRESSED SO HARD FOR GUNS WITHOUT LIMITS ?
      It’s called a revolution, a takeover via intimidation in the streets. 
Does anyone really want to confront them, and who are they anyhow ? – your neighbor ? The quiet one at the mall ?  Hey, why not just sit down and shut up ?
      These anarchists don’t have to use their gun, just knowing they have one does  the job.

       But the ones in the street are insignificant. What’s scary is the silent support President Trump gets with close to 80% of Republicans supporting his outlandish behavior and relentless lying.
       He has the Presidency and three of his top advisers come out of Brietbart News, a racist media organization. .  Real Republicans and genuine conservatives should reject this and insist that he distance the influence of these extremists from his decisions. Unfortunately, the extremists (constitutional anarchists), have control of the Republican Party, having gunned down all acceptable Republican candidates in the primaries.
      The path to a quasi fascist state is not impossible under these circumstances, so much depends on whether the American voter is capable of understanding the danger of  a gradual erosion of checks and balances and freedoms written into our republic.

       The United States is the gem of all gems, the biggest of all enchiladas, why wouldn’t an ideology want to gain control of it ?
        In my opinion, that is just what is happening, and it’s scary.
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     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

        Through these means, elements of  the extremist Republican party (Alt-Right) is now capitalizing on President Trump’s out-of-control ego and  his preoccupation with legitimacy as President, to quietly lock up control.

      One of the keystones of  fascism is to discredit, intimidate  and ultimately eliminate the effectiveness of the press, excepting that which falls in behind it  like FOX News.

       Trump’s chief advisor, Stephen Bannon was quoted Thursday as accusing the media of not understanding this country, adding  it should keep its mouth shut. 

        What ? They want to eliminate the 1st Amendment of the U.S. Constitution ……freedom of speech, and the press….and go straight to the 2nd Amendment… right to bear arms…?

        Whoa !

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TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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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.

 

 

 

 

 

 

 

 

 

 

Institutional Mindset Changing

Investor’s first read – Daily edge before the open
DJIA: 21,758
S&P 500:2,430
Nasdaq  Comp.:6,345
Russell 2000: 1,358
Friday,  Aug  18, 2017   9:08 a.m.
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      We have had a half dozen nasty, but brief, hits in the market over the past year, but the market always snapped back.
     This knee-jerk reaction  has occurred  because so many institutional decisions are based on computer algorithms, and they have been programmed to buy at the market and especially on dips.
     The big question now is, will all these money managers and analysts go back in and modify their algos account for the fading hopes for the huge stimulus and the increasing perception that President Trump’s outlandish behavior can adversely impact the future of the Republican Party ?

      If newly programmed algos limit buying, or increase selling in order to reduce portfolio risk, the nature of trading will change.  Volatility will increase in face of uncertainty and worry that the administration cannot deliver on the huge stimulus.
      The very predictable behavior of stocks has encouraged “hot” money to increase leverage, margin debt (borrowings to buy stock), which is at all-time highs, in itself a warning signal. While extreme leverage can balloon profits on the upside, it can be devastating on the downside, and especially a market plunge that is so steep, investors have no chance to reduce their exposure.
       Bear in mind, the mindset of the market has been, all systems GO, no sweat, fear not, a big reward of tax cuts, deregulation, and a big spend on the infrastructure awaits investors.

       Take all those goodies off the table and what do you have ?
TODAY

        We have a fundamentally overvalued stock market and cracks in the foundation that has supported it since November.
         If institutions don’t step in after yesterday’s crunch, it indicates fear has replaced their cruise control mentality of carefree buying.
         If they panic and hit the exits all at the same time, we will have a vertical drop of 10% – 14%.
          If cooler heads prevail, the market will stabilize today or Monday at a lower level and begin to work its way back up.
       It is important after a sharp plunge to watch the intensity of an attempt to rebound.  It’s the golf ball/ bocci ball phenom.  A golf ball bounce suggests more upside. A bocci ball bounce suggests more downside. I never liked the dead cat bounce analogy. 
       Futures trading does NOT indicate big buyers at the open. If the market doesn’t plunge during the first 20 minutes of trading, buyers will show up thinking the worst is over. A spastic rally or weakness in the first 20 minutes indicates the market needs to go lower to find buyers.        

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SUPPORT “today”:DJIA:21,603;S&P 500:2,431; Nasdaq Comp.:6,153
RESISTANCE “today” DJIA:21,801;S&P 500:2,441;Nasdaq Comp.:6,242

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CORPORATE EARNINGS
(updated July 27 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.9%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  June 15, 2017,  a reasonable risk is 21,876 extreme risk is 21,713. Near-term upside potential is 22,476.
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POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
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CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
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THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
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ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
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LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
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ANTIFA (Anti-Fascist Action
) is a organization dedicated to confront the Alt-Right/ white supremacist movement, and has actually been around for a long time. While antifa is not limited to the United States, it has been most effective here where white supremacy, racism, anti-semitism, and fascism is more prevalent. Most of its activities are nonviolent, but physical violence is warranted to reject these groups. Their ranks include people of many professions and cultures. Its ranks have grown rapidly, especially with Trump’s inauguration.
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The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
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917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
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TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                      
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White Nationalism is represented at the highest level in the White House. Steve Bannon, co-founder of Breitfart News, a supporter of Nazis, white supremacists, KKK, is Trump’s chief strategist. Stephen Miller, a nationalist playing deep in right field, is rumored to become the White House’s communications director.
     Sebastion Gorka, deputy assistant to Trump, since he worked for Bannon at Breitfart.
     Is it any wonder he sides with these extremists ?
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GIG ECONOMY: Temporary positions,freelance and independent contractors will account for an estimated 40% of workforce by 2020 work (what is.com)
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DeVos Unchecked in pursuit of Trump deregulation agenda and public funding of private schools, you know, the ones only a few can afford.
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DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
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WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PORBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.
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EVER WONDER WHY THE NRA AND RIGHT WING EXTREMISTS HAVE PRESSED SO HARD FOR GUNS WITHOUT LIMITS ?
      It’s called a revolution, a takeover via intimidation in the streets. 
Does anyone really want to confront them, and who are they anyhow ? – your neighbor ? The quiet one at the mall ?  Hey, why not just sit down and shut up ?
      These anarchists don’t have to use their gun, just knowing they have one does  the job.

       But the ones in the street are insignificant. What’s scary is the silent support President Trump gets with close to 80% of Republicans supporting his outlandish behavior and relentless lying.
       He has the Presidency and three of his top advisers come out of Brietbart News, a racist media organization. .  Real Republicans and genuine conservatives should reject this and insist that he distance the influence of these extremists from his decisions. Unfortunately, the extremists (constitutional anarchists), have control of the Republican Party, having gunned down all acceptable Republican candidates in the primaries.
      The path to a quasi fascist state is not impossible under these circumstances, so much depends on whether the American voter is capable of understanding the danger of  a gradual erosion of checks and balances and freedoms written into our republic.

       The United States is the gem of all gems, the biggest of all enchiladas, why wouldn’t an ideology want to gain control of it ?
        In my opinion, that is just what is happening, and it’s scary.
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     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
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ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

        Through these means, elements of  the extremist Republican party (Alt-Right) is now capitalizing on President Trump’s out-of-control ego and  his preoccupation with legitimacy as President, to quietly lock up control.

      One of the keystones of  fascism is to discredit, intimidate  and ultimately eliminate the effectiveness of the press, excepting that which falls in behind it  like FOX News.

       Trump’s chief advisor, Stephen Bannon was quoted Thursday as accusing the media of not understanding this country, adding  it should keep its mouth shut. 

        What ? They want to eliminate the 1st Amendment of the U.S. Constitution ……freedom of speech, and the press….and go straight to the 2nd Amendment… right to bear arms…?

        Whoa !

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TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
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DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

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WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
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WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
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GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

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TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
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TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

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Trump, Bannon Gone By 2019  (my blog 3/21/2017)

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TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
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W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
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  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
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ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
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     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
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IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
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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.