U.S. To Hold Off on Further Tariff Hikes ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,362
S&P 500: 2,984
Nasdaq Comp.: 7,973
Russell 2000:1,496
Friday August  30, 2019
  9:18 a.m.
NOTE: Market closed Monday
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
 Reportedly, the market’s two-day surge was a response to a comments Chinese government   official, Jingyi Pan of IG that suggested a halt in the one-upmanship in hikes by both sides, i.e. China would not respond to another US hike with one of their own.
       US money managers bought that ?   How amateurish !   Granted, the market would rally sharply, but tariffs aren’t the only issue here, and with stocks as over valued as they are, the markets would have to slide back again as recession fears become reality (ex tariffs).
Movements up and down in the market have been powered by “news whipsaw” not rational thinking.
A recent study by Ned Davis, one of the Street’s most brilliant technicians for many years concludes that stocks are higher than they have ever been 80% of the time going back to 1928 and are historically expensive relative to overall corporate profits, revenue and book.
The euphoria of a 10-year bull market is hard to shut off. Up-ticking bull markets, one’s that snap back immediately after corrections can be addictive to the point investors  simply cannot walk away.
This will be a case-in-point once again.

     …………………………………………….
TECHNICAL

           The market averages are locked in a 10-day trading range . The DJIA must break above26,247, S&P 500 above2,940 and Nasdaq Comp. above 8,066 to give the market a chance of attacking the all-time highs. The breakout should come this morning, but needs more substantial news of tariffs.
What’s more, I suspect this breakout will end up as a fake out in a week or less, especially if  tariff joisting takes a turn for the worse.

TODAY           ………………………………………………………
Minor Support: DJIA:26,307; S&P 500:2,917;Nasdaq Comp.:7,907
Minor Resistance: DJIA:26,437; S&P500:2,924;Nasdaq Comp.:8,051
………………………………………………………….
Thursday  Aug. 29 “Rally MUST Hold or Major Damage Done”

   Whipsaw news markets are a dilemma for investors trying to buy or sell at  best price.  Traders can trade them if the news items are spread far enough apart.  Not so here.
     Plunging interest rates are driving buyers to yield stocks and ones with great growth prospects…..BUT, they are paying up for those overpriced stocks.
The Street and most investors still feel comfy with stocks, even with a recession looming and all of the uncertainty over trade where corporate supply chains are being ripped to shreds, coveted markets moved to other countries.
Decision makers do not know what to expect next. That’s not a problem that will go away when tariffs are lifted. Who knows what Trump will do next ?
All this should depress stocks, so far it hasn’t.
When key  managers of serious money on the Street get scared by what their inflexible algos don’t see, they will sell in size prompting others  to see and you’ll get a flash crash of 12% -16% in three days.
…………………………………………

Wednesday Aug. 28  “Never a Recession Without a Bear Market”
The only consistent thing here is inconsistency.  The only inconsistent thing here is the TRUTH.
How can a stock market find a level that reasonably reflects issues positive and negative when information  from the top is both inconsistent and false ?
      So far, the Street has endorsed a bullish posture, ignoring the potential ravages of a global recession and dysfunctional, untruthful  governance.
In a reasonable environment, this stock market should decline 20%-25% just for openers to discount the possibility negative news will prevail….and possibly it will get worse than expected.
      That raises the odds that if it becomes suddenly overwhelmingly obvious a nasty recession will smack the world solidly between the eyes, the market will go straight down IMHO 35% and stay there for a long time, NOT bounce back when the Fed waves its magic wand.
      Why?
Because it will take a long time for the U.S.  regain credibility it has lost in recent years and to regain markets that have been lost to other countries as a result of its poorly administered trade policies.
A very naïve Street is spoiled by a 10-year bull market mothered by Fed policy and verbal promises.  It doesn’t want the party to end, so it is hanging tough to an algo-driven buy policy, hoping negatives will vanish.
One lesson I learned long, long ago is that you cannot afford the luxury of delusion in the stock market for long – they keep score every day.  That  vision has been tested over the last 5 – 8 years, but  will bear out in time.
…………………………………………………..
Tuesday Aug. 27  “News Whipsaw – Trade Deal On  –  Trade Deal Off !!
Just the mention of restarting trade talks in coming weeks is enough to give the Street hope for averting a recession and bear market. While this comes days after US threats to increase tariffs on China goods, it is what is said most recently that gets the attention of the Street.
Tomorrow may be something else.
That said, the market has some room to run before it hits resistance generally in the DJIA 26,300- 26,400 area (S&P 500: 2,925-2,940).
There is support at DJIA 25,500 (S&P 500:2,830).
We are in a tight trading range which can be resolved either way near-term, depending on news flow on the economy/recession and trade talks.
The Administration and Fed are  in panic mode to avert a recession in a presidential election year, so nothing would surprise me.
There is absolutely no consistency in government policy except inconsistency.
That does not breed CONFIDENCE, and confidence is the difference between  low valuation of stocks and ultra-high valuation which is where we are now.
These conditions are not easy for the nimblest of traders to exploit, so the average investor would be advised to stay on the sidelines with a healthy cash reserve.
…………………………………………

August 26  :STOP the LIES !!”
There is an enormous credibility problem here with the potential for a very bad ending for naïve investors who continually get sucked back into an historically overvalued market by inconsistent rhetoric from the Street, the White House and  the Fed.
Credibility and confidence  are key to how stocks are valued, the difference between a price earnings ratio for the S&P 500 of 20 or 29.
What 20 x earnings ?   Why not ?
The S&P 500 was priced below 20x earnings in the  turbulent 1970s and 1980s and during the 2007-2009 recession/bear market. Today’s domestic and international chaos is on par with, or worse than, any of those years.
After the G7 meeting over the weekend, what can we believe
– The U.S. will raise tariffs further ?  Talks with China will restart ? Tax cuts ? Index Capital Gains to inflation ?  or “We’re doing tremendously well…our consumers are rich” President Trump.
More sharp turns than a punt returner, a line dancer.
TWO IMPERITIVES:

1_Stop lying to us

2- Let the market find a level that discounts known and perceived positives and negatives. STOP the verbal manipulation.

 

Friday Aug. 23  “Don’t Rush to Buy Fed Chief Powell’s Hype”
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………………….

What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

Rally MUST Hold or Damage Done

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,036
S&P 500: 2,877
Nasdaq Comp.:7,856
Russell 2000:1,472
Thursday August  29, 2019
  8:38 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
Whipsaw news markets are a dilemma
for investors trying to buy or sell at  best price.  Traders can trade them if the news items are spread far enough apart.  Not so here.
     Plunging interest rates are driving buyers to yield stocks and ones with great growth prospects…..BUT, they are paying up for those overpriced stocks.
The Street and most investors still feel comfy with stocks, even with a recession looming and all of the uncertainty over trade where corporate supply chains are being ripped to shreds, coveted markets moved to other countries.
Decision makers do not know what to expect next. That’s not a problem that will go away when tariffs are lifted. Who knows what Trump will do next ?
All this should depress stocks, so far it hasn’t.
When key  managers of serious money on the Street get scared by what their inflexible algos don’t see, they will sell in size prompting others  to see and you’ll get a flash crash of 12% -16% in three days.
…………………………………………….
TECHNICAL

     Yesterday wasn’t as pretty as it looked at first glance. DJIA up 258 points,
but 91 of those were contributed by Boeing (BA: +5.24, Home Depot (HD: +3.74, United Healthcare (UNH: +4.42).
The DJIA was up 1.0%, while the S&P 500 was up 0.65%, and Nasdaq Comp. up 0.38%.
The market averages are locked in a 10-day trading range . The DJIA must break above26,247, S&P 500 above2,940 and Nasdaq Comp. above 8,066 to give the market a chance of attacking the all-time highs

TODAY           ………………………………………………………
Minor Support: DJIA:26,136; S&P 500:2,889;Nasdaq Comp.:7,865
Minor Resistance: DJIA:26,317; S&P500:2,924;Nasdaq Comp.:7,957
………………………………………………………….
Wednesday Aug. 28  “Never a Recession Without a Bear Market”
The only consistent thing here is inconsistency.  The only inconsistent thing here is the TRUTH.
How can a stock market find a level that reasonably reflects issues positive and negative when information  from the top is both inconsistent and false ?
      So far, the Street has endorsed a bullish posture, ignoring the potential ravages of a global recession and dysfunctional, untruthful  governance.
In a reasonable environment, this stock market should decline 20%-25% just for openers to discount the possibility negative news will prevail….and possibly it will get worse than expected.
      That raises the odds that if it becomes suddenly overwhelmingly obvious a nasty recession will smack the world solidly between the eyes, the market will go straight down IMHO 35% and stay there for a long time, NOT bounce back when the Fed waves its magic wand.
      Why?
Because it will take a long time for the U.S.  regain credibility it has lost in recent years and to regain markets that have been lost to other countries as a result of its poorly administered trade policies.
A very naïve Street is spoiled by a 10-year bull market mothered by Fed policy and verbal promises.  It doesn’t want the party to end, so it is hanging tough to an algo-driven buy policy, hoping negatives will vanish.
One lesson I learned long, long ago is that you cannot afford the luxury of delusion in the stock market for long – they keep score every day.  That  vision has been tested over the last 5 – 8 years, but  will bear out in time.
…………………………………………………..
Tuesday Aug. 27  “News Whipsaw – Trade Deal On  –  Trade Deal Off !!
Just the mention of restarting trade talks in coming weeks is enough to give the Street hope for averting a recession and bear market. While this comes days after US threats to increase tariffs on China goods, it is what is said most recently that gets the attention of the Street.
Tomorrow may be something else.
That said, the market has some room to run before it hits resistance generally in the DJIA 26,300- 26,400 area (S&P 500: 2,925-2,940).
There is support at DJIA 25,500 (S&P 500:2,830).
We are in a tight trading range which can be resolved either way near-term, depending on news flow on the economy/recession and trade talks.
The Administration and Fed are  in panic mode to avert a recession in a presidential election year, so nothing would surprise me.
There is absolutely no consistency in government policy except inconsistency.
That does not breed CONFIDENCE, and confidence is the difference between  low valuation of stocks and ultra-high valuation which is where we are now.
These conditions are not easy for the nimblest of traders to exploit, so the average investor would be advised to stay on the sidelines with a healthy cash reserve.
…………………………………………

August 26  :STOP the LIES !!”
There is an enormous credibility problem here with the potential for a very bad ending for naïve investors who continually get sucked back into an historically overvalued market by inconsistent rhetoric from the Street, the White House and  the Fed.
Credibility and confidence  are key to how stocks are valued, the difference between a price earnings ratio for the S&P 500 of 20 or 29.
What 20 x earnings ?   Why not ?
The S&P 500 was priced below 20x earnings in the  turbulent 1970s and 1980s and during the 2007-2009 recession/bear market. Today’s domestic and international chaos is on par with, or worse than, any of those years.
After the G7 meeting over the weekend, what can we believe
– The U.S. will raise tariffs further ?  Talks with China will restart ? Tax cuts ? Index Capital Gains to inflation ?  or “We’re doing tremendously well…our consumers are rich” President Trump.
More sharp turns than a punt returner, a line dancer.
TWO IMPERITIVES:

1_Stop lying to us

2- Let the market find a level that discounts known and perceived positives and negatives. STOP the verbal manipulation.

 

Friday Aug. 23  “Don’t Rush to Buy Fed Chief Powell’s Hype”
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………………….
Thursday Aug. 22  “Running Scared…Caution to the Winds… Panic…Lies, Deception, Dysfunction…All With a Price”

Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottl
………………………………………………………...
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

Never a Recession Without a Bear Market

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,737
S&P 500: 2,869
Nasdaq Comp.:7,826
Russell 2000:1,456
Wednesday August  28, 2019
  9:04 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
The only consistent thing here is inconsistency.  The only inconsistent thing here is the TRUTH.
How can a stock market find a level that reasonably reflects issues positive and negative when information  from the top is both inconsistent and false ?
      So far, the Street has endorsed a bullish posture, ignoring the potential ravages of a global recession and dysfunctional, untruthful  governance.
In a reasonable environment, this stock market should decline 20%-25% just for openers to discount the possibility negative news will prevail….and possibly it will get worse than expected.
      That raises the odds that if it becomes suddenly overwhelmingly obvious a nasty recession will smack the world solidly between the eyes, the market will go straight down IMHO 35% and stay there for a long time, NOT bounce back when the Fed waves its magic wand.
      Why?
Because it will take a long time for the U.S.  regain credibility it has lost in recent years and to regain markets that have been lost to other countries as a result of its poorly administered trade policies.
A very naïve Street is spoiled by a 10-year bull market mothered by Fed policy and verbal promises.  It doesn’t want the party to end, so it is hanging tough to an algo-driven buy policy, hoping negatives will vanish.
One lesson I learned long, long ago is that you cannot afford the luxury of delusion in the stock market for long – they keep score every day.  That  vision has been tested over the last 5 – 8 years, but  will bear out in time..
…………………………………………….
TECHNICAL
TODAY:  The Street doesn’t know what to think about US/China trade. Trump says one thing Xi says another.      But tariffs are only part of the problem.  We are on the threshold of a global recession which has not yet been discounted by stock prices.
The Street thinks it can ignore a recession and move on to the next economic recovery.  There have been bear markets without a recession, but never a recession without a bear market.
………………………………………………………
Minor Support: DJIA:25,717; S&P 500:2,861;Nasdaq Comp.:7,801
Minor Resistance: DJIA:25,846; S&P500:2,883;Nasdaq Comp.:7,841
………………………………………………………….
Tuesday Aug. 27  “News Whipsaw – Trade Deal On  –  Trade Deal Off !!
Just the mention of restarting trade talks in coming weeks is enough to give the Street hope for averting a recession and bear market. While this comes days after US threats to increase tariffs on China goods, it is what is said most recently that gets the attention of the Street.
Tomorrow may be something else.
That said, the market has some room to run before it hits resistance generally in the DJIA 26,300- 26,400 area (S&P 500: 2,925-2,940).
There is support at DJIA 25,500 (S&P 500:2,830).
We are in a tight trading range which can be resolved either way near-term, depending on news flow on the economy/recession and trade talks.
The Administration and Fed are  in panic mode to avert a recession in a presidential election year, so nothing would surprise me.
There is absolutely no consistency in government policy except inconsistency.
That does not breed CONFIDENCE, and confidence is the difference between  low valuation of stocks and ultra-high valuation which is where we are now.
These conditions are not easy for the nimblest of traders to exploit, so the average investor would be advised to stay on the sidelines with a healthy cash reserve.
…………………………………………

August 26  :STOP the LIES !!”
There is an enormous credibility problem here with the potential for a very bad ending for naïve investors who continually get sucked back into an historically overvalued market by inconsistent rhetoric from the Street, the White House and  the Fed.
Credibility and confidence  are key to how stocks are valued, the difference between a price earnings ratio for the S&P 500 of 20 or 29.
What 20 x earnings ?   Why not ?
The S&P 500 was priced below 20x earnings in the  turbulent 1970s and 1980s and during the 2007-2009 recession/bear market. Today’s domestic and international chaos is on par with, or worse than, any of those years.
After the G7 meeting over the weekend, what can we believe
– The U.S. will raise tariffs further ?  Talks with China will restart ? Tax cuts ? Index Capital Gains to inflation ?  or “We’re doing tremendously well…our consumers are rich” President Trump.
More sharp turns than a punt returner, a line dancer.
TWO IMPERITIVES:

1_Stop lying to us

2- Let the market find a level that discounts known and perceived positives and negatives. STOP the verbal manipulation.

 

Friday Aug. 23  “Don’t Rush to Buy Fed Chief Powell’s Hype”
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………………….
Thursday Aug. 22  “Running Scared…Caution to the Winds… Panic…Lies, Deception, Dysfunction…All With a Price”

Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottles.   ……………….
Wed. August 21 “It’s All About @020 Hype Leading to a Bursting Bubble”
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
………………………………………………….
Tuesday  Aug. 20 Administration and Fed Expect Recession
Recession talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
.
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

 

 

News Whipsaw -Trade Deal On – Trade Deal Off !!

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,898
S&P 500: 2,878
Nasdaq Comp.:7,853
Russell 2000:1,476
Tuesday August  27, 2019
  9:17 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
Just the mention of restarting trade talks in coming weeks is enough to give the Street hope for averting a recession and bear market. While this comes days after US threats to increase tariffs on China goods, it is what is said most recently that gets the attention of the Street.
Tomorrow may be something else.
That said, the market has some room to run before it hits resistance generally in the DJIA 26,300- 26,400 area (S&P 500: 2,925-2,940).
There is support at DJIA 25,500 (S&P 500:2,830).
We are in a tight trading range which can be resolved either way near-term, depending on news flow on the economy/recession and trade talks.
The Administration and Fed are  in panic mode to avert a recession in a presidential election year, so nothing would surprise me.
There is absolutely no consistency in government policy except inconsistency.
That does not breed CONFIDENCE, and confidence is the difference between  low valuation of stocks and ultra-high valuation which is where we are now.
These conditions are not easy for the nimblest of traders to exploit, so the average investor would be advised to stay on the sidelines with a healthy cash reserve.
…………………………………………….
TECHNICAL
TODAY:  The market will rebound again in response to hints over the weekend that US and China trade talks will resume.  If this is true, it is worth big rally. But the truth is elusive with this Administration
But tariffs are only part of the problem.  We are on the threshold of a global recession which has not yet been discounted by stock prices.
………………………………………………………
Minor Support: DJIA:25,876; S&P 500:2,876;Nasdaq Comp.:7,843
Minor Resistance: DJIA:25,967; S&P500:2,884;Nasdaq Comp.:7,874
………………………………………………………….
August 26  :STOP the LIES !!”
There is an enormous credibility problem here with the potential for a very bad ending for naïve investors who continually get sucked back into an historically overvalued market by inconsistent rhetoric from the Street, the White House and  the Fed.
Credibility and confidence  are key to how stocks are valued, the difference between a price earnings ratio for the S&P 500 of 20 or 29.
What 20 x earnings ?   Why not ?
The S&P 500 was priced below 20x earnings in the  turbulent 1970s and 1980s and during the 2007-2009 recession/bear market. Today’s domestic and international chaos is on par with, or worse than, any of those years.
After the G7 meeting over the weekend, what can we believe
– The U.S. will raise tariffs further ?  Talks with China will restart ? Tax cuts ? Index Capital Gains to inflation ?  or “We’re doing tremendously well…our consumers are rich” President Trump.
More sharp turns than a punt returner, a line dancer.
TWO IMPERITIVES:

1_Stop lying to us

2- Let the market find a level that discounts known and perceived positives and negatives. STOP the verbal manipulation.

 

Friday Aug. 23  “Don’t Rush to Buy Fed Chief Powell’s Hype”
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………………….
Thursday Aug. 22  “Running Scared…Caution to the Winds… Panic…Lies, Deception, Dysfunction…All With a Price”

Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottles.   ……………….
Wed. August 21 “It’s All About @020 Hype Leading to a Bursting Bubble”
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
………………………………………………….
Tuesday  Aug. 20 Administration and Fed Expect Recession
Recession talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
.
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

 

STOP the LIES !!!

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,628
S&P 500: 2,847
Nasdaq Comp.:7,751
Russell 2000:1,451
Monday  August  26, 2019
  9:17 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
     There is an enormous credibility problem here with the potential for a very bad ending for naïve investors who continually get sucked back into an historically overvalued market by inconsistent rhetoric from the Street, the White House and  the Fed.
Credibility and confidence  are key to how stocks are valued, the difference between a price earnings ratio for the S&P 500 of 20 or 29.
What 20 x earnings ?   Why not ?
The S&P 500 was priced below 20x earnings in the  turbulent 1970s and 1980s and during the 2007-2009 recession/bear market. Today’s domestic and international chaos is on par with, or worse than, any of those years.
After the G7 meeting over the weekend, what can we believe
– The U.S. will raise tariffs further ?  Talks with China will restart ? Tax cuts ? Index Capital Gains to inflation ?  or “We’re doing tremendously well…our consumers are rich” President Trump.
More sharp turns than a punt returner, a line dancer.
TWO IMPERITIVES:

1_Stop lying to us

2- Let the market find a level that discounts known and perceived positives and negatives. STOP the verbal manipulation.
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:  The market will start with a rebound in prices in response to hints that US and China trade talks will resume.  If this is true, it is worth big rally.
But tariffs are only part of the problem.  We are on the threshold of a global recession which has not yet been discounted by stock prices.
………………………………………………………
Minor Support: DJIA:25,437; S&P 500:2,827;Nasdaq Comp.:7,707
Minor Resistance: DJIA:25,687; S&P500:2,846;Nasdaq Comp.:7,789
………………………………………………………….
Friday Aug. 23  “Don’t Rush to Buy Fed Chief Powell’s Hype”
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………………….
Thursday Aug. 22  “Running Scared…Caution to the Winds… Panic…Lies, Deception, Dysfunction…All With a Price”

Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottles.   ……………….
Wed. August 21 “It’s All About @020 Hype Leading to a Bursting Bubble”
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
………………………………………………….
Tuesday  Aug. 20 Administration and Fed Expect Recession
Recession talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
.
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

Don’t Rush to Buy Fed Chief Powell’s Hype

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,252
S&P 500: 2,922
Nasdaq Comp.:7,991
Russell 2000:1,506
Friday  August  23, 2019
  9:17 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
The market will open on the downside after China just announced it will strike back on U.S. threat to impose tariffs on $300 billion of Chinese goods with its own tariffs on $75 billion of U.S. goods, levies ranging from 5%-10% (Sept 1 and Dec. 15). A 25% tariff on automobiles and 5% tariff on parts will become effective Dec. 15.
Fed Chief  Jerome Powell speaks before the Central Bankers Forum today at Jackson Hole, Wyoming. While President Trump is pressuring the Fed for one major cut in the fed funds rate, or several smaller cuts, it is uncertain Powell will yield to the pressure.
I expect him to say the Fed will track the nation’s struggling economy and cut rates if it sees fit.
Trump will attend the G-7 meeting in Biarritz, France this weekend. Climate change and trade tensions will be discussed among other issues.
     Thanks to a 14-point rise in Boeing’s stock (BA: see below) the DJIA was up 49 points yesterday instead of down 50 points. At 354, BA is the DJIA’a highest priced stock.  Since the DJIA is a “price-weighted” average, a move in BA impacts the DJIA 10 times  more than a move in Pfizer (PFE: 35).
BOEING (BA)
Boeing (BA: 354)  Stock jumped again yesterday.   
Hundreds of Boeing’s 373 Max aircraft were grounded  by major airlines after two fatal  crashes last year. I didn’t think a 24% drop from its all-time high of 446 adequately discounted downside risk, so I began to track it.  I noted the company has desperately needed just a little good news from a brokerage research firm or airline that could reverse its downward spiral  chase shorts and bring in some buyers. Yesterday, it may have got what  it needed  when Cowen & Co analyst Cai von Rumohr reported the FAA’s certification flight for the 737 could take place in 4 to six weeks. It will take better  news than that, but BA’s downside risk is now limited  and no longer as great a risk as I feared. Coverage here will end  for now.
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:
………………………………………………………
Minor Support: DJIA:25,950; S&P 500:2,891;Nasdaq Comp.:7,907
Minor Resistance: DJIA:26,337; S&P500:2,927;Nasdaq Comp.:7,998
………………………………………………………….
Thursday Aug. 22  “Running Scared…Caution to the Winds… Panic…Lies, Deception, Dysfunction…All With a Price”

Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottles.   ……………….
Wed. August 21 “It’s All About @020 Hype Leading to a Bursting Bubble”
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
………………………………………………….
Tuesday  Aug. 20 Administration and Fed Expect Recession
Recession talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
Friday August 16  “Street Ignores Warning Signs – Will Try to Run Stocks Back Up – Use Strength to Sell”
Global recession fears
have driven interest rates into negative territory, i.e., depositors must pay banks to hold their money !
The US Fed is driving interest rates lower to head off  a recession here. Only 8 months ago, it was raising rates – go figure.
Unprecedented policies will be needed to respond to the next economic downturn,” reports BlackRock Investment Institute, adding “Monetary policy is almost exhausted as global interest rates plunge toward zero or below.
BlackRock’s solution is “helicopter money,” giving money directly to the public. Hey guys, I live at 7925………..
CONCLUSION:
I would rather be wrong on this one, but I have been warning of a recession/bear market  since late last year with good reason, and finally, the financial press is picking up on the risk.
But the Street still  doesn’t get it.   That’s the kind of arrogance and naivete that leads to investors getting slaughtered.
This I what happens after a Fed-micromanaged 10-year long bull market.
      The bull will continue, and buyers will continue to buy, at the market and on dips until suddenly the BIG money, the SMART money, is a no-show, or a piece of news so horrific that it can’t be ignored  chases buyers away and triggers a selling panic.
       I have experienced 13 of these market tops, and they all have at least one thing in common – practically no one thinks a bear market can happen – conditions are simply too good.
……………………………………………………………..                                                                           Thursday  August 15  “Expect Fed and Administration to Talk Market Back Up”
     It took an inversion of the 2 yr/10yr yield curve to wake the Street up to what has been obvious for 6 months – that we are in the early stages of a recession.
Yes, this is what I have been warning readers  of for at least that long.
Another warning is appropriate now, that is that the Fed and administration are  going to step in with whatever BS they can muster to turn the market back up……and of course, suck investors in for yet another  drubbing.
As I have said several times  this week, both the Fed and administration are master market manipulators of the stock market.
     Yesterday I noted, “At some point…. the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives. Yesterday’s “whoosh” down was just the first of many when the BIG money, the “smart” money, decides to bail out looking ahead to an opportunity to buy back ion 35% – 45% lower, more for Nasdaq.
CONCLUSION:  Expect hype about tariffs, meetings with China’s Xi Jinping, and lies about the strength of the economy
.
These comments will trigger sharp rallies. Investors will jump back in… only to get their clock cleaned all over again.
There have been bear markets without recessions, but never a recession without a bear market.
I have experienced 13 bear markets and 7 recessions and have never seen such ineptness and spewing of untruths in any of them.
……………………………………………………………
Wednesday  August 14  “Bulls “Must” Hold the Line….or else”
Why worry about buying,
I wrote yesterday, “The Fed is there with another cut in rates, or verbal hype, and it has been a long time since this administration floated an untruth about optimism on trade talks.”
Within 90 minutes of my post, the administration announced
it would postpone the 10% tariff on $300 billion of Chinese goods scheduled for Sept. 1 until Dec. 15. The DJIA shot up372 points erasing Monday’s 391 point loss.
It is clear to me the announcement was timed to prevent another leg down in the market, something this administration and Fed do not want so close to a presidential election year.
As noted Monday, the Fed and administration manipulate the market all the time.
      I have argued for letting the market find a level that discounts current and potential negatives. Eventually, the market will do that anyhow, but not until a lot of investors get sucked into stocks by the hype.
At some point, I noted, the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives.
      THAT JUNCTURE MAY HAVE COME TODAY . PRE-OPEN TRADING INDICATE A BIG DROP AT THE OPEN IN FACE OF THE INVERSION OF THE 2-YEAR AND 10-YEAR YIELD CURVE, THE FIRST INVERSION SINCE 2007.
       Expect the Fed or administration to counter with  a commentary that rebuts the seriousness of  the yield curve inversion.
…………………………………………………….
Tuesday   August 13, 2019  “Street’s Algos Unflappable Until Overridden By Selling”
    Buyers will rule UNTIL someone breaks ranks and sells, triggering a stampede to sell.   This is a “I won’t sell if they don’t sell” mentality. The Street’s algos are unflappable  until overridden by common sense.
     So far buyers are there on pullbacks even though they are paying up for stocks. Why worry, the Fed is there with another cut in rates, or the verbal hype, and it has been a long time since the administration floated an untruth about optimism  on trade talks.
Both the Fed and administration manipulate the market all the time, as well as huge pools of leveraged money.
But, comes a time, all that doesn’t work, buyers are  chased away by fundamental, domestic and international developments, and big investors scramble to lock in profits.
This negative rant must get old after a while, but all I am saying is, there are soooo many signs of trouble that aren’t discounted in valuations, and that situation won’t last forever.
When this aging and overpriced bull market heads down to a level that reasonably values stocks, it will happen suddenly, 12% – 18% in a matter of days and that will more than sting.
…………………………………………………
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

Running Scared, Caution to the Winds, Panic, Lies, Deception, Dysfunction…All With a Price

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,202
S&P 500: 2,924
Nasdaq Comp.:8,020
Russell 2000:1,509
Thursday  August  22, 2019
  8:44 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
     Panic breeds  bad decisions. Mounting fear of recession is overpowering the Trump Administration and Fed. They are grabbing for straws to head off a devastating recession and worse, a bear market in 2020.
      I have experienced a lot of crises over 57 years in this business, but this one is scary.
Why ?  Too many lies – Too Much Greed…Too much  bullshit at the highest levels.
The inevitable can only be delayed for so long, until  reality sets in.
All this smacks of a bubble – the cartoon where the man walks off a cliff and doesn’t fall until he looks down.
I shudder to think of the leverage that has been amassed over a 10 year bull market.  So much hot money, so much entrusted to algorithms that cannot be programmed to anticipate what we are seeing in the leadership and lack thereof of our country.
So few see it.  Scary !
When they do, it will be too late
Not bedtime reading, but a wakeup call.
What is most troubling to me is we are not yet in hard times, this get-reelected shell game could be prolonged for months. When hard times come there will be little anyone can do to reverse the economic and social pain.
Tax cuts are a short- term fix. But those taxes were employed to pay certain bills.  Our annual deficit will hit $1 trillion this year which the Wall Street Journal says will bump government debt to 95% of GDP in ten years, up from 79% now, the highest since World War II.
CONCLUSION: As characteristic of all stock market bubbles, they just keep expanding.    They either burst because they can’t expand anymore, or they are pricked by an event.
The key for investors is to do something entirely un-human – that is – walk away while others are popping champagne bottles.   ……………….
BOEING (BA)
A purely technical scenario:  Boeing (BA: 340)  Stock jumped sharply yesterday.   With hundreds of Boeing’s 373 Max aircraft grounded, the company has desperately needed just a little good news from a brokerage research could chase shorts and take it up 10 points, or a major order from an airline could take it higher. 
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:
There is still room to move up. The S&P 500 is still 3.5% below August’s high. Hype of tax cuts for all voters is rampant, so that will expand the bubble further.  A turn down can start at any time, so a healthy cash reserve is wise.
………………………………………………………
Minor Support: DJIA:26,157; S&P 500:2,917;Nasdaq Comp.:7,996
Minor Resistance: DJIA:26,251; S&P500:2,927;Nasdaq Comp.:8,026
………………………………………………………….
Wed. August 21 “It’s All About @020 Hype Leading to a Bursting Bubble”
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
………………………………………………….
Tuesday  Aug. 20 Administration and Fed Expect Recession
Recession talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
Friday August 16  “Street Ignores Warning Signs – Will Try to Run Stocks Back Up – Use Strength to Sell”
Global recession fears
have driven interest rates into negative territory, i.e., depositors must pay banks to hold their money !
The US Fed is driving interest rates lower to head off  a recession here. Only 8 months ago, it was raising rates – go figure.
Unprecedented policies will be needed to respond to the next economic downturn,” reports BlackRock Investment Institute, adding “Monetary policy is almost exhausted as global interest rates plunge toward zero or below.
BlackRock’s solution is “helicopter money,” giving money directly to the public. Hey guys, I live at 7925………..
CONCLUSION:
I would rather be wrong on this one, but I have been warning of a recession/bear market  since late last year with good reason, and finally, the financial press is picking up on the risk.
But the Street still  doesn’t get it.   That’s the kind of arrogance and naivete that leads to investors getting slaughtered.
This I what happens after a Fed-micromanaged 10-year long bull market.
      The bull will continue, and buyers will continue to buy, at the market and on dips until suddenly the BIG money, the SMART money, is a no-show, or a piece of news so horrific that it can’t be ignored  chases buyers away and triggers a selling panic.
       I have experienced 13 of these market tops, and they all have at least one thing in common – practically no one thinks a bear market can happen – conditions are simply too good.
……………………………………………………………..                                                                           Thursday  August 15  “Expect Fed and Administration to Talk Market Back Up”
     It took an inversion of the 2 yr/10yr yield curve to wake the Street up to what has been obvious for 6 months – that we are in the early stages of a recession.
Yes, this is what I have been warning readers  of for at least that long.
Another warning is appropriate now, that is that the Fed and administration are  going to step in with whatever BS they can muster to turn the market back up……and of course, suck investors in for yet another  drubbing.
As I have said several times  this week, both the Fed and administration are master market manipulators of the stock market.
     Yesterday I noted, “At some point…. the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives. Yesterday’s “whoosh” down was just the first of many when the BIG money, the “smart” money, decides to bail out looking ahead to an opportunity to buy back ion 35% – 45% lower, more for Nasdaq.
CONCLUSION:  Expect hype about tariffs, meetings with China’s Xi Jinping, and lies about the strength of the economy
.
These comments will trigger sharp rallies. Investors will jump back in… only to get their clock cleaned all over again.
There have been bear markets without recessions, but never a recession without a bear market.
I have experienced 13 bear markets and 7 recessions and have never seen such ineptness and spewing of untruths in any of them.
……………………………………………………………
Wednesday  August 14  “Bulls “Must” Hold the Line….or else”
Why worry about buying,
I wrote yesterday, “The Fed is there with another cut in rates, or verbal hype, and it has been a long time since this administration floated an untruth about optimism on trade talks.”
Within 90 minutes of my post, the administration announced
it would postpone the 10% tariff on $300 billion of Chinese goods scheduled for Sept. 1 until Dec. 15. The DJIA shot up372 points erasing Monday’s 391 point loss.
It is clear to me the announcement was timed to prevent another leg down in the market, something this administration and Fed do not want so close to a presidential election year.
As noted Monday, the Fed and administration manipulate the market all the time.
      I have argued for letting the market find a level that discounts current and potential negatives. Eventually, the market will do that anyhow, but not until a lot of investors get sucked into stocks by the hype.
At some point, I noted, the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives.
      THAT JUNCTURE MAY HAVE COME TODAY . PRE-OPEN TRADING INDICATE A BIG DROP AT THE OPEN IN FACE OF THE INVERSION OF THE 2-YEAR AND 10-YEAR YIELD CURVE, THE FIRST INVERSION SINCE 2007.
       Expect the Fed or administration to counter with  a commentary that rebuts the seriousness of  the yield curve inversion.
…………………………………………………….
Tuesday   August 13, 2019  “Street’s Algos Unflappable Until Overridden By Selling”
    Buyers will rule UNTIL someone breaks ranks and sells, triggering a stampede to sell.   This is a “I won’t sell if they don’t sell” mentality. The Street’s algos are unflappable  until overridden by common sense.
     So far buyers are there on pullbacks even though they are paying up for stocks. Why worry, the Fed is there with another cut in rates, or the verbal hype, and it has been a long time since the administration floated an untruth about optimism  on trade talks.
Both the Fed and administration manipulate the market all the time, as well as huge pools of leveraged money.
But, comes a time, all that doesn’t work, buyers are  chased away by fundamental, domestic and international developments, and big investors scramble to lock in profits.
This negative rant must get old after a while, but all I am saying is, there are soooo many signs of trouble that aren’t discounted in valuations, and that situation won’t last forever.
When this aging and overpriced bull market heads down to a level that reasonably values stocks, it will happen suddenly, 12% – 18% in a matter of days and that will more than sting.
…………………………………………………
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

 

 

 

 

It’s All About 2020 Leading to a Bursting Bubble

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,962
S&P 500: 2,900
Nasdaq Comp.:1,948
Russell 2000:1,498
Wednesday  August  21, 2019
  9:06 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
Tax cuts, linking the capital gains tax to inflation, reduce payroll tax – these are measures  employed when a nation is deep in recession
, not when as President Trump says, the “Economy is great….We’re doing tremendously well….Our consumers are rich.”
It’s all about getting re-elected in 2020, and it can backfire big time.
Interest rates barely got off the floor and QE barely cut back when the Fed panicked to cut its benchmark interest rate last month leaving little more than one or two more rate cuts it can do to pull the economy out of recession.
The Tax Cut Jobs Act was a short-term goose for corporations which spent the money more on stock buy-backs than on capex.
Capital gains tax relief may help investors but do little for the core of the economy. More tax cuts may delay the inevitable – a prolonged recession where the government is powerless to help.
Tax cuts deprive the government of funds to pay its bills without borrowing more and inflating the national debt.
BOTTOM LINE: a massive bubble burst…..Dominos tumbling one after another and a huge crunch in the stock market from a historically extremely overvalued level.
Solution: Don’t panic – don’t expend all your anti-recession ammo too early – nurture  the country through the inevitable, a recession – let the stock market find its own comfort level, stop manipulating it and creating the huge bubble that will devastate investors when it bursts.
……………….
BOEING (BA)
A purely technical scenario:  Boeing (BA: 331)  A break below 321 would indicate another leg down. Company desperately needs a vote of confidence from somewhere, preferably the airlines which have hundreds of Boeing’s 373 Max aircraft grounded. Just a little good news from a brokerage research could chase shorts and take it up 10 points, or a major order from an airline could take it higher, but the whole reason it is getting is hammered is the Street and airline industry are afraid to buy.
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:

………………………………………………………
Minor Support: DJIA:25,851; S&P 500:2,895;Nasdaq Comp.:7,921
Minor Resistance: DJIA:25,997; S&P500:2,917;Nasdaq Comp.:79,964
………………………………………………………….
Recession
talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………………………………………..
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Navarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
Friday August 16  “Street Ignores Warning Signs – Will Try to Run Stocks Back Up – Use Strength to Sell”
Global recession fears
have driven interest rates into negative territory, i.e., depositors must pay banks to hold their money !
The US Fed is driving interest rates lower to head off  a recession here. Only 8 months ago, it was raising rates – go figure.
Unprecedented policies will be needed to respond to the next economic downturn,” reports BlackRock Investment Institute, adding “Monetary policy is almost exhausted as global interest rates plunge toward zero or below.
BlackRock’s solution is “helicopter money,” giving money directly to the public. Hey guys, I live at 7925………..
CONCLUSION:
I would rather be wrong on this one, but I have been warning of a recession/bear market  since late last year with good reason, and finally, the financial press is picking up on the risk.
But the Street still  doesn’t get it.   That’s the kind of arrogance and naivete that leads to investors getting slaughtered.
This I what happens after a Fed-micromanaged 10-year long bull market.
      The bull will continue, and buyers will continue to buy, at the market and on dips until suddenly the BIG money, the SMART money, is a no-show, or a piece of news so horrific that it can’t be ignored  chases buyers away and triggers a selling panic.
       I have experienced 13 of these market tops, and they all have at least one thing in common – practically no one thinks a bear market can happen – conditions are simply too good.
……………………………………………………………..                                                                           Thursday  August 15  “Expect Fed and Administration to Talk Market Back Up”
     It took an inversion of the 2 yr/10yr yield curve to wake the Street up to what has been obvious for 6 months – that we are in the early stages of a recession.
Yes, this is what I have been warning readers  of for at least that long.
Another warning is appropriate now, that is that the Fed and administration are  going to step in with whatever BS they can muster to turn the market back up……and of course, suck investors in for yet another  drubbing.
As I have said several times  this week, both the Fed and administration are master market manipulators of the stock market.
     Yesterday I noted, “At some point…. the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives. Yesterday’s “whoosh” down was just the first of many when the BIG money, the “smart” money, decides to bail out looking ahead to an opportunity to buy back ion 35% – 45% lower, more for Nasdaq.
CONCLUSION:  Expect hype about tariffs, meetings with China’s Xi Jinping, and lies about the strength of the economy
.
These comments will trigger sharp rallies. Investors will jump back in… only to get their clock cleaned all over again.
There have been bear markets without recessions, but never a recession without a bear market.
I have experienced 13 bear markets and 7 recessions and have never seen such ineptness and spewing of untruths in any of them.
……………………………………………………………
Wednesday  August 14  “Bulls “Must” Hold the Line….or else”
Why worry about buying,
I wrote yesterday, “The Fed is there with another cut in rates, or verbal hype, and it has been a long time since this administration floated an untruth about optimism on trade talks.”
Within 90 minutes of my post, the administration announced
it would postpone the 10% tariff on $300 billion of Chinese goods scheduled for Sept. 1 until Dec. 15. The DJIA shot up372 points erasing Monday’s 391 point loss.
It is clear to me the announcement was timed to prevent another leg down in the market, something this administration and Fed do not want so close to a presidential election year.
As noted Monday, the Fed and administration manipulate the market all the time.
      I have argued for letting the market find a level that discounts current and potential negatives. Eventually, the market will do that anyhow, but not until a lot of investors get sucked into stocks by the hype.
At some point, I noted, the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives.
      THAT JUNCTURE MAY HAVE COME TODAY . PRE-OPEN TRADING INDICATE A BIG DROP AT THE OPEN IN FACE OF THE INVERSION OF THE 2-YEAR AND 10-YEAR YIELD CURVE, THE FIRST INVERSION SINCE 2007.
       Expect the Fed or administration to counter with  a commentary that rebuts the seriousness of  the yield curve inversion.
…………………………………………………….
Tuesday   August 13, 2019  “Street’s Algos Unflappable Until Overridden By Selling”
    Buyers will rule UNTIL someone breaks ranks and sells, triggering a stampede to sell.   This is a “I won’t sell if they don’t sell” mentality. The Street’s algos are unflappable  until overridden by common sense.
     So far buyers are there on pullbacks even though they are paying up for stocks. Why worry, the Fed is there with another cut in rates, or the verbal hype, and it has been a long time since the administration floated an untruth about optimism  on trade talks.
Both the Fed and administration manipulate the market all the time, as well as huge pools of leveraged money.
But, comes a time, all that doesn’t work, buyers are  chased away by fundamental, domestic and international developments, and big investors scramble to lock in profits.
This negative rant must get old after a while, but all I am saying is, there are soooo many signs of trouble that aren’t discounted in valuations, and that situation won’t last forever.
When this aging and overpriced bull market heads down to a level that reasonably values stocks, it will happen suddenly, 12% – 18% in a matter of days and that will more than sting.
…………………………………………………
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

 

 

 

 

Administration and Fed Expect Recession

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,135
S&P 500: 2,923
Nasdaq Comp.:8,002
Russell 2000:1,508
Tuesday  August  20, 2019
  9:06 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
Recession
talk is front and center with key officials of the Trump administration (including Trump) denying even a remote possibility of one.
Why then is Trump urging the Fed to cut its benchmark fed funds rate by a full 100 basis points ?
      Why talk about a 10%  tax cut for the middle class which only got a 1%-1.5% tax cut while corporations got a 40% cut in 2017’s Tax Cut Jobs Act ?            Why the talk about a temporary payroll tax cut ?
       For months I have been telling readers we are already in the early stages of a recession, especially housing and manufacturing.
It’s all about 2020’s presidential election, but the prospect of a recession is real, or the administration wouldn’t be panicking.
IF SO, WHAT IS THE STOCK MARKET DOING AT HISTORIC HIGHS in VALUATION ?
There have been bear markets without  recessions, but never a recession without a bear market.
         It is just a matter of time before the BIG money stops buying and institutions begin selling.
Since so many institutions key on the same indicators, the bear market will begin with a 3-day 12% – 16% nosedive.
      That’s why I have been urging readers to  establish a cash reserve in line with their tolerance for risk, at least 30% upwards to 75%.
       The Street doesn’t want the party to end, the administration cannot afford a bear market and recession in an election year. Nine of the last 10 recessions have been with a Republican in the White House and that is a major concern for the BIG money.
……………….
BOEING (BA)
A purely technical scenario:  Boeing (BA: 333)  BA could run  a bit higher (333 – 335, but abreak below 321 would indicate another leg down. Company desperately needs a vote of confidence from somewhere, preferably the airlines which have hundreds of Boeing’s 373 Max aircraft grounded. Just a little good news from a brokerage research could chase shorts and take it up 10 points, or a major order from an airline could take it higher, but the whole reason it is getting is hammered is the Street and airline industry are afraid to buy.
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:
Markets continued to rebound from last week’s sell off on news of the yield curve inversion.  The Fed could push prices higher with more hype of  lower interest rates.
………………………………………………………
Minor Support: DJIA:26,076; S&P 500:2,919;Nasdaq Comp.:7,986
Support is based on a  pullback from early buying
Minor Resistance: DJIA:26,199; S&P500:2,929;Nasdaq Comp.:8,017
………………………………………………………….
Monday  August 19   “Ignore Administration Hype About Economy”
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Naxarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market.
………………………………………………………..
Friday August 16  “Street Ignores Warning Signs – Will Try to Run Stocks Back Up – Use Strength to Sell”
Global recession fears
have driven interest rates into negative territory, i.e., depositors must pay banks to hold their money !
The US Fed is driving interest rates lower to head off  a recession here. Only 8 months ago, it was raising rates – go figure.
Unprecedented policies will be needed to respond to the next economic downturn,” reports BlackRock Investment Institute, adding “Monetary policy is almost exhausted as global interest rates plunge toward zero or below.
BlackRock’s solution is “helicopter money,” giving money directly to the public. Hey guys, I live at 7925………..
CONCLUSION:
I would rather be wrong on this one, but I have been warning of a recession/bear market  since late last year with good reason, and finally, the financial press is picking up on the risk.
But the Street still  doesn’t get it.   That’s the kind of arrogance and naivete that leads to investors getting slaughtered.
This I what happens after a Fed-micromanaged 10-year long bull market.
      The bull will continue, and buyers will continue to buy, at the market and on dips until suddenly the BIG money, the SMART money, is a no-show, or a piece of news so horrific that it can’t be ignored  chases buyers away and triggers a selling panic.
       I have experienced 13 of these market tops, and they all have at least one thing in common – practically no one thinks a bear market can happen – conditions are simply too good.
……………………………………………………………..                                                                           Thursday  August 15  “Expect Fed and Administration to Talk Market Back Up”
     It took an inversion of the 2 yr/10yr yield curve to wake the Street up to what has been obvious for 6 months – that we are in the early stages of a recession.
Yes, this is what I have been warning readers  of for at least that long.
Another warning is appropriate now, that is that the Fed and administration are  going to step in with whatever BS they can muster to turn the market back up……and of course, suck investors in for yet another  drubbing.
As I have said several times  this week, both the Fed and administration are master market manipulators of the stock market.
     Yesterday I noted, “At some point…. the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives. Yesterday’s “whoosh” down was just the first of many when the BIG money, the “smart” money, decides to bail out looking ahead to an opportunity to buy back ion 35% – 45% lower, more for Nasdaq.
CONCLUSION:  Expect hype about tariffs, meetings with China’s Xi Jinping, and lies about the strength of the economy
.
These comments will trigger sharp rallies. Investors will jump back in… only to get their clock cleaned all over again.
There have been bear markets without recessions, but never a recession without a bear market.
I have experienced 13 bear markets and 7 recessions and have never seen such ineptness and spewing of untruths in any of them.
……………………………………………………………
Wednesday  August 14  “Bulls “Must” Hold the Line….or else”
Why worry about buying,
I wrote yesterday, “The Fed is there with another cut in rates, or verbal hype, and it has been a long time since this administration floated an untruth about optimism on trade talks.”
Within 90 minutes of my post, the administration announced
it would postpone the 10% tariff on $300 billion of Chinese goods scheduled for Sept. 1 until Dec. 15. The DJIA shot up372 points erasing Monday’s 391 point loss.
It is clear to me the announcement was timed to prevent another leg down in the market, something this administration and Fed do not want so close to a presidential election year.
As noted Monday, the Fed and administration manipulate the market all the time.
      I have argued for letting the market find a level that discounts current and potential negatives. Eventually, the market will do that anyhow, but not until a lot of investors get sucked into stocks by the hype.
At some point, I noted, the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives.
      THAT JUNCTURE MAY HAVE COME TODAY . PRE-OPEN TRADING INDICATE A BIG DROP AT THE OPEN IN FACE OF THE INVERSION OF THE 2-YEAR AND 10-YEAR YIELD CURVE, THE FIRST INVERSION SINCE 2007.
       Expect the Fed or administration to counter with  a commentary that rebuts the seriousness of  the yield curve inversion.
…………………………………………………….
Tuesday   August 13, 2019  “Street’s Algos Unflappable Until Overridden By Selling”
    Buyers will rule UNTIL someone breaks ranks and sells, triggering a stampede to sell.   This is a “I won’t sell if they don’t sell” mentality. The Street’s algos are unflappable  until overridden by common sense.
     So far buyers are there on pullbacks even though they are paying up for stocks. Why worry, the Fed is there with another cut in rates, or the verbal hype, and it has been a long time since the administration floated an untruth about optimism  on trade talks.
Both the Fed and administration manipulate the market all the time, as well as huge pools of leveraged money.
But, comes a time, all that doesn’t work, buyers are  chased away by fundamental, domestic and international developments, and big investors scramble to lock in profits.
This negative rant must get old after a while, but all I am saying is, there are soooo many signs of trouble that aren’t discounted in valuations, and that situation won’t last forever.
When this aging and overpriced bull market heads down to a level that reasonably values stocks, it will happen suddenly, 12% – 18% in a matter of days and that will more than sting.
…………………………………………………
What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

 

 

 

 

 

Ignore Administration Hype about Economy

INVESTOR’S first read.com – Daily edge before the open
DJIA: 25,886
S&P 500: 2,888
Nasdaq Comp.:7,895
Russell 2000:1,493
Monday  August  19, 2019
  8:48 a.m.
………………………..
gbifr79@gmail.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

TODAY:
     I have been warning readers, the administration and Fed will release whatever information it can muster up to stabilize the market and that that  may work temporarily. 
     White House economic adviser Larry Kudlow was on both Fox News and “Meet the Press” Sunday where he said, “I don’t see a recession at all,” and “There’s no recession coming …the pessimists are wrong”
     Chief White House trade adviser Peter Naxarro took the same stance on ABC’s “This Week” and  CBS’ “Face the Nation,” saying he was certain we’re going to have a strong economy through and beyond 2020, adding  Chinese tariffs would have no impact on American consumers.
Leaving New Jersey yesterday on Air Farce One, President Trump denied rumors of an economic downturn, saying, “I don’t think we’re having a recession…We’re doing tremendously well… Our consumers are rich.”
     Small wonder then that the market will kick off trading on a strong note today.
We have yet to hear from the Fed, but  give it a few hours after the open.
OK, while  an administration should be supportive, it should  not be manipulative against strong odds that the economy is either in a recession, or on the threshold of one.
By its verbal hype, investors are being sucked into a market that is historically very overvalued. When the truth outs, they will get slaughtered.
      Just the fact the Fed is in a hurry to cut interest rates, indicates it seriously sees a recession looming. Add to that an inconsistent rebound in housing and a crunch in manufacturing and it spells RECESSION, and there has never been a recession without a bear market
……………….
BOEING (BA)
A purely technical scenario:  Boeing (BA: 330)  BA could run  a bit higher (333 – 335, but break below 321 would indicate another leg down. Company desperately needs a vote of confidence from somewhere, preferably the airlines which have hundreds of Boeing’s 373 Max aircraft grounded. Just a little good news from a brokerage research could chase shorts and take it up 10 points, or a major order from an airline could take it higher, but the whole reason it is getting is hammered is the Street and airline industry are afraid to buy.
…………………………………………….
TECHNICAL
The Trump administration and Fed will release whatever info it can muster up to stabilize this market and it may work temporarily.
TODAY:
Markets are bouncing from last week’s sell off on news of the yield curve inversion.  The Fed could push prices higher with more hype of  lower interest rates.  The market must hold its gain today, or it spells weakness.
………………………………………………………
Minor Support: DJIA:25,851; S&P 500:2,886;Nasdaq Comp.:7,881
Support is based on a  pullback from early buying.
Minor Resistance: DJIA:26,117; S&P500:2,913;Nasdaq Comp.:7,965
………………………………………………………….
Friday August 16  “Street Ignores Warning Signs – Will Try to Run Stocks Back Up – Use Strength to Sell”
Global recession fears
have driven interest rates into negative territory, i.e., depositors must pay banks to hold their money !
The US Fed is driving interest rates lower to head off  a recession here. Only 8 months ago, it was raising rates – go figure.
Unprecedented policies will be needed to respond to the next economic downturn,” reports BlackRock Investment Institute, adding “Monetary policy is almost exhausted as global interest rates plunge toward zero or below.
BlackRock’s solution is “helicopter money,” giving money directly to the public. Hey guys, I live at 7925………..
CONCLUSION:
I would rather be wrong on this one, but I have been warning of a recession/bear market  since late last year with good reason, and finally, the financial press is picking up on the risk.
But the Street still  doesn’t get it.   That’s the kind of arrogance and naivete that leads to investors getting slaughtered.
This I what happens after a Fed-micromanaged 10-year long bull market.
      The bull will continue, and buyers will continue to buy, at the market and on dips until suddenly the BIG money, the SMART money, is a no-show, or a piece of news so horrific that it can’t be ignored  chases buyers away and triggers a selling panic.
       I have experienced 13 of these market tops, and they all have at least one thing in common – practically no one thinks a bear market can happen – conditions are simply too good.
……………………………………………………………..

 

 

Thursday  August 15  “Expect Fed and Administration to Talk Market Back Up”
     It took an inversion of the 2 yr/10yr yield curve to wake the Street up to what has been obvious for 6 months – that we are in the early stages of a recession.
Yes, this is what I have been warning readers  of for at least that long.
Another warning is appropriate now, that is that the Fed and administration are  going to step in with whatever BS they can muster to turn the market back up……and of course, suck investors in for yet another  drubbing.
As I have said several times  this week, both the Fed and administration are master market manipulators of the stock market.
     Yesterday I noted, “At some point…. the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives. Yesterday’s “whoosh” down was just the first of many when the BIG money, the “smart” money, decides to bail out looking ahead to an opportunity to buy back ion 35% – 45% lower, more for Nasdaq.
CONCLUSION:  Expect hype about tariffs, meetings with China’s Xi Jinping, and lies about the strength of the economy
.
These comments will trigger sharp rallies. Investors will jump back in… only to get their clock cleaned all over again.
There have been bear markets without recessions, but never a recession without a bear market.
I have experienced 13 bear markets and 7 recessions and have never seen such ineptness and spewing of untruths in any of them.
……………………………………………………………
Wednesday  August 14  “Bulls “Must” Hold the Line….or else”
Why worry about buying,
I wrote yesterday, “The Fed is there with another cut in rates, or verbal hype, and it has been a long time since this administration floated an untruth about optimism on trade talks.”
Within 90 minutes of my post, the administration announced
it would postpone the 10% tariff on $300 billion of Chinese goods scheduled for Sept. 1 until Dec. 15. The DJIA shot up372 points erasing Monday’s 391 point loss.
It is clear to me the announcement was timed to prevent another leg down in the market, something this administration and Fed do not want so close to a presidential election year.
As noted Monday, the Fed and administration manipulate the market all the time.
      I have argued for letting the market find a level that discounts current and potential negatives. Eventually, the market will do that anyhow, but not until a lot of investors get sucked into stocks by the hype.
At some point, I noted, the Street won’t take the bait then whoosh down the market goes to a level that does  discount the negatives.
      THAT JUNCTURE MAY HAVE COME TODAY . PRE-OPEN TRADING INDICATE A BIG DROP AT THE OPEN IN FACE OF THE INVERSION OF THE 2-YEAR AND 10-YEAR YIELD CURVE, THE FIRST INVERSION SINCE 2007.
       Expect the Fed or administration to counter with  a commentary that rebuts the seriousness of  the yield curve inversion.
…………………………………………………….
Tuesday   August 13, 2019  “Street’s Algos Unflappable Until Overridden By Selling”
    Buyers will rule UNTIL someone breaks ranks and sells, triggering a stampede to sell.   This is a “I won’t sell if they don’t sell” mentality. The Street’s algos are unflappable  until overridden by common sense.
     So far buyers are there on pullbacks even though they are paying up for stocks. Why worry, the Fed is there with another cut in rates, or the verbal hype, and it has been a long time since the administration floated an untruth about optimism  on trade talks.
Both the Fed and administration manipulate the market all the time, as well as huge pools of leveraged money.
But, comes a time, all that doesn’t work, buyers are  chased away by fundamental, domestic and international developments, and big investors scramble to lock in profits.
This negative rant must get old after a while, but all I am saying is, there are soooo many signs of trouble that aren’t discounted in valuations, and that situation won’t last forever.
When this aging and overpriced bull market heads down to a level that reasonably values stocks, it will happen suddenly, 12% – 18% in a matter of days and that will more than sting.
……………………………………………….
Monday  August 12  “There Are No New Eras for Stocks”
      If this market were trading 25% lower in face of hurtful tariffs, struggling global economies on the threshold of recession,  stagnant corporate earnings, excessive individual, corporate and government debt that limits future growth,  international tensions and  a government under fire, I would feel more comfortable about buying, simply because these negative would be largely discounted.
By historical yardsticks, this market is overvalued, possibly by more that 25%.  The Shiller price/earnings ratio is 29.5 versus a mean of 16.6, that’s higher than before the 2007 – 2009 bear market, and as high as the market before the ’29 crash. While the market is not as overvalued as the 44.2  P/E in December 1999 when the dot-com bubble burst causing a 50% plunge in the S&P 500 (78% plunge in Nasdaq), there is enough good reason to have a healthy cash reserve.
A NEW ERA FOR STOCKS ?   That’s what the Street generally thinks at market tops.  With algorithms doing so much of the Street’s thinking, this market  can hang tough….until something unexpected outside of the algo programming metrics and you have a stampede for the exits….and no buyers.
The only thing new about this era is the degree to which the market has been casinoized.  Bull and bear markets happen. We are overdue for the latter. All it takes is for a couple of major institutions to ditch their algos, break ranks and sell – the others will follow. That justifies taking steps to  protect one’s portfolio with a cash reserve of 30% +. Depending on one’s tolerance for risk, that could be greater.
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What No One on Wall Street Wants to Hear
>We are in the late innings of an economic expansion, so a recession is a good bet. The current expansion started in June 2009, has lasted 120 months, the longest  in history, twice as long as the average length of 11 cycles since 1945.
> Of the 10 recessions since 1950, the average time between the low point in the unemployment rate and the start of a recession was just 3.8 months.  The unemployment rate is 3.6% which was hit in May.  Technically, we won’t know when the start of the current recession is official for months after the fact, since that conclusion is  reached by the Nat’l Bureau of Economic Research (NBER) and they consider  host of economic indicators.
>Bear markets lead the beginning of recessions by 3 to 12 months.  The current bull market at 123 months is 4 times the average of the last 15 bulls going back to 1957
 >Nine out of the last 10 recessions have occurred with a Republican in the White House.
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George Brooks
Investor’s first read.com
A Game-On Analysis, LLC publication
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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.