Trump Got His Fat Ass Kicked – Now That’s Bullish !

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,412
S&P 500: 3,335
Nasdaq Comp.:11,055
Russell: 1,504
Wednesday   September 30, 2020    8:12 a.m.
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brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
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January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
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With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
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Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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RECENT POSTS:
Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
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Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

BOTTOM LINE:
     The stock market needs a huge boost from somewhere, probably the stimulus to avert a further sell-off, or a breakthrough on COVID-19. Any rally will encounter  more selling.
I can’t imagine money managers knowing the risk of another dip in the economy, the overvaluation of stocks in general not maintaining a large cash reserve.
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Thursday  September 24, 2020 (DJIA:26,763) “HIGH RISK ! Market Needs Help, or else”
This is the ugliest technical action I have seen since the Feb,/Mar. flash crash
that hammered the DJIA down 38.4% in 21 days, the S&P500 down35>4% and Nasdaq Comp. down 32.6%.
There is relentless selling with little buying support.  There was no meaningful follow through to the rallies on Monday and Tuesday. The market is in a downtrend with the risk of another flash crash.
The Street is worried about COVID’s stubbornness to go away, actually it is spiking in 22 states. The Street is worried about the elections, that turmoil will create uncertainty about its outcome, that President Trump would not leave office even if defeated by a landslide, resorting to legal challenges of votes in key states.
All this with stock prices riding at levels more overvalued than at any time in the past based on lower corporate earnings created by Covid-19 and measures to counter it.
We are witnessing a greenstick fracture to the market averages on the verge of a full  fracture, and the new normal has been a flash crash.
Passage of a  stimulus bill may prevent a flash crash, or at least slow it down.
Reasonable support for market averages in sell off based on
on Sept. 23 close of:
DJIA: 26,763; S&P500: 3,236; Nasdaq Comp.:10,632; QQQ: 264;
NDX: 10,833.

DJIA:25,400
S&P 500: 3,120
Nasdaq Comp.:9,875
QQQ: 251
NDX: 10,325
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Secondary support
DJIA: 24,650
S&P 500: 2,895
Nasdaq Comp. 9,525
QQQ: 237
NDX: 9,875
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Flash crash support:
DJIA: 21,750
S&P 500: 2,495
Nasdaq Comp.: 8,325
QQQ: 211
NDX: 8,780
Obviously these are subject to change. We have an election in 41 days and a lot can happen, a lot will be said, we could get a stimulus plan out of Congress.
A stimulus could stabilize the market here and trigger a rebound.
The downside of a stimulus would be that it would highlight the fact our economy is in dire peril.
FYI: I came across the following quote posted by Dion Rabouin on Axios Markets that  explains the relationship between the Street and Fed.
     “By giving the market so much accommodation … the Fed has essentially created a spoiled child where nothing’s enough and there always has to be more,” Tom Essaye, founder and president of Sevens Research, tells Axios.
Makes me wonder if Fed Chief, Powell, is really a Trump “toady.”
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Wednesday  September 23, 2020 (DJIA:27,288) “Odds of Flash Crash Increasing”
     Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
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Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.
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Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
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Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Extreme Volatility Ahead

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,584
S&P 500: 3,351
Nasdaq Comp.:11,117
Russell: 1,510
Tuesday   September 29, 2020    8:21 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.
* update

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RECENT POSTS:
Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

BOTTOM LINE:
     The stock market needs a huge boost from somewhere, probably the stimulus to avert a further sell-off, or a breakthrough on COVID-19. Any rally will encounter  more selling.
I can’t imagine money managers knowing the risk of another dip in the economy, the overvaluation of stocks in general not maintaining a large cash reserve.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>…

 

Thursday  September 24, 2020 (DJIA:26,763) “HIGH RISK ! Market Needs Help, or else”
This is the ugliest technical action I have seen since the Feb,/Mar. flash crash
that hammered the DJIA down 38.4% in 21 days, the S&P500 down35>4% and Nasdaq Comp. down 32.6%.
There is relentless selling with little buying support.  There was no meaningful follow through to the rallies on Monday and Tuesday. The market is in a downtrend with the risk of another flash crash.
The Street is worried about COVID’s stubbornness to go away, actually it is spiking in 22 states. The Street is worried about the elections, that turmoil will create uncertainty about its outcome, that President Trump would not leave office even if defeated by a landslide, resorting to legal challenges of votes in key states.
All this with stock prices riding at levels more overvalued than at any time in the past based on lower corporate earnings created by Covid-19 and measures to counter it.
We are witnessing a greenstick fracture to the market averages on the verge of a full  fracture, and the new normal has been a flash crash.
Passage of a  stimulus bill may prevent a flash crash, or at least slow it down.
Reasonable support for market averages in sell off based on
on Sept. 23 close of:
DJIA: 26,763; S&P500: 3,236; Nasdaq Comp.:10,632; QQQ: 264;
NDX: 10,833.

DJIA:25,400
S&P 500: 3,120
Nasdaq Comp.:9,875
QQQ: 251
NDX: 10,325
……………………………………………………………………………
Secondary support
DJIA: 24,650
S&P 500: 2,895
Nasdaq Comp. 9,525
QQQ: 237
NDX: 9,875
……………………………………………………………………………
Flash crash support:
DJIA: 21,750
S&P 500: 2,495
Nasdaq Comp.: 8,325
QQQ: 211
NDX: 8,780
Obviously these are subject to change. We have an election in 41 days and a lot can happen, a lot will be said, we could get a stimulus plan out of Congress.
A stimulus could stabilize the market here and trigger a rebound.
The downside of a stimulus would be that it would highlight the fact our economy is in dire peril.
FYI: I came across the following quote posted by Dion Rabouin on Axios Markets that  explains the relationship between the Street and Fed.
     “By giving the market so much accommodation … the Fed has essentially created a spoiled child where nothing’s enough and there always has to be more,” Tom Essaye, founder and president of Sevens Research, tells Axios.
Makes me wonder if Fed Chief, Powell, is really a Trump “toady.”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 

Wednesday  September 23, 2020 (DJIA:27,288) “Odds of Flash Crash Increasing”
     Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
……………………………………………………….

Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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 Needs News: Stimulus, COVID, Recession

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,173
S&P 500: 3,298
Nasdaq Comp.:10,913
Russell: 1,474
Monday  September 28, 2020    9:03 a.m.
……………………………………..
brooksie01@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold

 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

BOTTOM LINE:
     The stock market needs a huge boost from somewhere, probably the stimulus to avert a further sell-off, or a breakthrough on COVID-19. Any rally will encounter  more selling.
I can’t imagine money managers knowing the risk of another dip in the economy, the overvaluation of stocks in general not maintaining a large cash reserve.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>…

 

 

 

Thursday  September 24, 2020 (DJIA:26,763) “HIGH RISK ! Market Needs Help, or else”
This is the ugliest technical action I have seen since the Feb,/Mar. flash crash
that hammered the DJIA down 38.4% in 21 days, the S&P500 down35>4% and Nasdaq Comp. down 32.6%.
There is relentless selling with little buying support.  There was no meaningful follow through to the rallies on Monday and Tuesday. The market is in a downtrend with the risk of another flash crash.
The Street is worried about COVID’s stubbornness to go away, actually it is spiking in 22 states. The Street is worried about the elections, that turmoil will create uncertainty about its outcome, that President Trump would not leave office even if defeated by a landslide, resorting to legal challenges of votes in key states.
All this with stock prices riding at levels more overvalued than at any time in the past based on lower corporate earnings created by Covid-19 and measures to counter it.
We are witnessing a greenstick fracture to the market averages on the verge of a full  fracture, and the new normal has been a flash crash.
Passage of a  stimulus bill may prevent a flash crash, or at least slow it down.
Reasonable support for market averages in sell off based on
on Sept. 23 close of:
DJIA: 26,763; S&P500: 3,236; Nasdaq Comp.:10,632; QQQ: 264;
NDX: 10,833.

DJIA:25,400
S&P 500: 3,120
Nasdaq Comp.:9,875
QQQ: 251
NDX: 10,325
……………………………………………………………………………
Secondary support
DJIA: 24,650
S&P 500: 2,895
Nasdaq Comp. 9,525
QQQ: 237
NDX: 9,875
……………………………………………………………………………
Flash crash support:
DJIA: 21,750
S&P 500: 2,495
Nasdaq Comp.: 8,325
QQQ: 211
NDX: 8,780
Obviously these are subject to change. We have an election in 41 days and a lot can happen, a lot will be said, we could get a stimulus plan out of Congress.
A stimulus could stabilize the market here and trigger a rebound.
The downside of a stimulus would be that it would highlight the fact our economy is in dire peril.
FYI: I came across the following quote posted by Dion Rabouin on Axios Markets that  explains the relationship between the Street and Fed.
     “By giving the market so much accommodation … the Fed has essentially created a spoiled child where nothing’s enough and there always has to be more,” Tom Essaye, founder and president of Sevens Research, tells Axios.
Makes me wonder if Fed Chief, Powell, is really a Trump “toady.”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 

 

Wednesday  September 23, 2020 (DJIA:27,288) “Odds of Flash Crash Increasing”
     Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
……………………………………………………….

Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
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Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
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Friday  September 18, 2020 (DJIA: 27,902) “2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
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Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
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Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
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Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Without Big News on COVID or Stimulus….Flash Crash #2

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,815
S&P 500: 3,246
Nasdaq Comp.:10,672
Russell: 1,451
Friday   September 25, 2020    6:36 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
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The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
The supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     249
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,019
Apple (AAPL: 112)                         103         103    Close:     108
Netflix: (NFLX: 483)                       437         466     Close:    473
Google (GOOG: 1,520)              1,451       1,406   Close:  1,428
Tesla (TSLA: 441)                           377          407    Close:    387
Microsoft (MSFT: 215)                 191          196     Close:   203
Near-term resistance: FB:255; AMZN:3,106; AAPL: 112; NFLX: 481; GOOG: 1,461; TSLA 407; MSFT: 204. Without a breakthrough, on COVID or a stimulus, these levels won’t hold
BOTTOM LINE:
     The stock market needs a huge boost from somewhere, probably the stimulus to avert a further sell-off, or a breakthrough on COVID-19. Any rally will encounter  more selling.
I can’t imagine money managers knowing the risk of another dip in the economy, the overvaluation of stocks in general not maintaining a large cash reserve.

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     RECENT POSTS:
Thursday  September 24, 2020 (DJIA:26,763) “HIGH RISK ! Market Needs Help, or else”
This is the ugliest technical action I have seen since the Feb,/Mar. flash crash
that hammered the DJIA down 38.4% in 21 days, the S&P500 down35>4% and Nasdaq Comp. down 32.6%.
There is relentless selling with little buying support.  There was no meaningful follow through to the rallies on Monday and Tuesday. The market is in a downtrend with the risk of another flash crash.
The Street is worried about COVID’s stubbornness to go away, actually it is spiking in 22 states. The Street is worried about the elections, that turmoil will create uncertainty about its outcome, that President Trump would not leave office even if defeated by a landslide, resorting to legal challenges of votes in key states.
All this with stock prices riding at levels more overvalued than at any time in the past based on lower corporate earnings created by Covid-19 and measures to counter it.
We are witnessing a greenstick fracture to the market averages on the verge of a full  fracture, and the new normal has been a flash crash.
Passage of a  stimulus bill may prevent a flash crash, or at least slow it down.
Reasonable support for market averages in sell off based on
on Sept. 23 close of:
DJIA: 26,763; S&P500: 3,236; Nasdaq Comp.:10,632; QQQ: 264;
NDX: 10,833.

DJIA:25,400
S&P 500: 3,120
Nasdaq Comp.:9,875
QQQ: 251
NDX: 10,325
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Secondary support
DJIA: 24,650
S&P 500: 2,895
Nasdaq Comp. 9,525
QQQ: 237
NDX: 9,875
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Flash crash support:
DJIA: 21,750
S&P 500: 2,495
Nasdaq Comp.: 8,325
QQQ: 211
NDX: 8,780
Obviously these are subject to change. We have an election in 41 days and a lot can happen, a lot will be said, we could get a stimulus plan out of Congress.
A stimulus could stabilize the market here and trigger a rebound.
The downside of a stimulus would be that it would highlight the fact our economy is in dire peril.
FYI: I came across the following quote posted by Dion Rabouin on Axios Markets that  explains the relationship between the Street and Fed.
     “By giving the market so much accommodation … the Fed has essentially created a spoiled child where nothing’s enough and there always has to be more,” Tom Essaye, founder and president of Sevens Research, tells Axios.
Makes me wonder if Fed Chief, Powell, is really a Trump “toady.”
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Wednesday  September 23, 2020 (DJIA:27,288) “Odds of Flash Crash Increasing”
     Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
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Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.
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Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
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Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
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Friday  September 18, 2020 (DJIA: 27,902) “2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HIGH RISK ! Market Needs Help, or else

INVESTOR’S first read.com – Daily edge before the open
DJIA: 26,763
S&P 500: 3,236
Nasdaq Comp.:10,632
Russell: 1,451
Thursday   September 24, 2020    8:51 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This is the ugliest technical action I have seen since the Feb,/Mar. flash crash
that hammered the DJIA down 38.4% in 21 days, the S&P500 down35>4% and Nasdaq Comp. down 32.6%.
There is relentless selling with little buying support.  There was no meaningful follow through to the rallies on Monday and Tuesday. The market is in a downtrend with the risk of another flash crash.
The Street is worried about COVID’s stubbornness to go away, actually it is spiking in 22 states. The Street is worried about the elections, that turmoil will create uncertainty about its outcome, that President Trump would not leave office even if defeated by a landslide, resorting to legal challenges of votes in key states.
All this with stock prices riding at levels more overvalued than at any time in the past based on lower corporate earnings created by Covid-19 and measures to counter it.
We are witnessing a greenstick fracture to the market averages on the verge of a full  fracture, and the new normal has been a flash crash.
Passage of a  stimulus bill may prevent a flash crash, or at least slow it down.
Reasonable support for market averages in sell off based on
on Sept. 23 close of:
DJIA: 26,763; S&P500: 3,236; Nasdaq Comp.:10,632; QQQ: 264;
NDX: 10,833.

DJIA:25,400
S&P 500: 3,120
Nasdaq Comp.:9,875
QQQ: 251
NDX: 10,325
……………………………………………………………………………
Secondary support
DJIA: 24,650
S&P 500: 2,895
Nasdaq Comp. 9,525
QQQ: 237
NDX: 9,875
……………………………………………………………………………
Flash crash support:
DJIA: 21,750
S&P 500: 2,495
Nasdaq Comp.: 8,325
QQQ: 211
NDX: 8,780
Obviously these are subject to change. We have an election in 41 days and a lot can happen, a lot will be said, we could get a stimulus plan out of Congress.
A stimulus could stabilize the market here and trigger a rebound.
The downside of a stimulus would be that it would highlight the fact our economy is in dire peril.
FYI: I came across the following quote posted by Dion Rabouin on Axios Markets that  explains the relationship between the Street and Fed.
     “By giving the market so much accommodation … the Fed has essentially created a spoiled child where nothing’s enough and there always has to be more,” Tom Essaye, founder and president of Sevens Research, tells Axios.
Makes me wonder if Fed Chief, Powell, is really a Trump “toady.”
 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     RECENT POSTS:
Wednesday  September 23, 2020 (DJIA:27,288) “Odds of Flash Crash Increasing”
     Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
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Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday  September 18, 2020 (DJIA: 27,902) “2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Odds of Flash Crash Increasing

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,288
S&P 500: 3,315
Nasdaq Comp.:10,963
Russell: 1,496
Wednesday   September 23, 2020    9:01 a.m.
……………………………………..
brooksie01@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Morgan Stanley is warning that the Nasdaq 100 drop to its 200-day moving average at 9,528, a 23% drop from its all-time high and a decline of  10% from current levels.
Six tech stocks of this tech-heavy index make up 48%  of  the 100 stocks Apple (AAPL):12.9%; Microsoft (MSFT: 10.7%); Amazon (AMZN: 10.5%); Facebook (FB: 4.3%), Tesla (TSLA: 3.7%); google (GOOG: 3.5%).
In his September 21 article for FA.com, Lou Wang is quick to  point out that while the Nasdaq 100 is up 24% for the year, the S&P 500 has gained a little more than  1%.
       Billionaire, Barry Diller, chairman of Expedia (EXPE) and a Biden supporter told Market Watch’s Shawn Langlois he thinks the market is a great speculation and it is time to raise cash.
Alan Lancz
, contrarian money manager and disciple of John Templeton, told Mark DeCambre of MarketWatch  “Investor anxiety will only intensify over the next 60-90 days. It will build with uncertainty from U.S.-China relations, election chaos, delays in further relief/ stimulus, and a second wave of COVID.
Lanz recommends cash.
     BOTTOM LINE:
      I  agree with all of the above, but expect the bloodletting to be more pronounced.  What is not now being addressed is the significant overvaluation of stocks based on time-tested measures of value, the preponderance of speculation and rank unwillingness of the Street to step back and take a close look at where the stock market is now compared with the past.
      It’s  Bubble #2  !  Bubble # 1 was burst on February 12 leading to a 38.4% plunge in the DJIA, a 35.4% drop in the S&P 500, and a 32.6% drop in the Nasdaq Comp..
      Twenty two states are now experiencing a surge in COVID, double the number from a week ago.  While this will be downplayed in Washington, it stands to be taken more seriously by the Street.   Much as I like football, odds are the surge will accelerate  with close contact between players and their families and then beyond. I expect games to be cancelled as the season progresses.
The inept, politically motivated mishandling of COVID will go down in history as an unmitigated disaster.  For it to continue  to be ignored will wreck an economy already on the ropes.
RESISTANCE to upside:DJIA:27,656; S&P 500: 3,359; Nasdaq Comp.: 11,147;  NDX: 11,413; QQQ: 287
……………………………………………………….

Follow up to 9/16 support projection
 Price: Close 9/16                    RISK  Low   Tue. Close 9/22
Facebook (FB: 263)                       251         244     Close:      255
Amazon (AMZN:3,078)             2,907       2,871    Close:   3,128
Apple (AAPL: 112)                         103         103     Close:      112
Netflix: (NFLX: 483)                       437         466     Close:      491
Google (GOOG: 1,520)              1,451      1,406     Close:  1,465
Tesla (TSLA: 441)                           377          407    Close:      424
Microsoft (MSFT: 215)                 191          196     Close:     207
Rebounds can carry to FB:257; AMZN:3,146; AAPL: 113; NFLX: 496; GOOG: 1,474; TSLA: 431; MSFT: 209.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     RECENT POSTS:
Tuesday   September 22, 2020 (DJIA:27,147) “Rally to Be Short-Lived”
The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low  Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday  September 18, 2020 (DJIA: 27,902) “2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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 to Be Short-Lived

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,147
S&P 500: 3,281
Nasdaq Comp.:10,778
Russell: 1,485
Tuesday   September 22, 2020    7:01 a.m.
……………………………………..
brooksie01@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     The market took a big hit in early trading yesterday, but managed to recoup  much of its losses by Day’s end.
Fed Chief Powell testifies before Congress this week, so expect a lot of  positive input designed to stabilize stock prices and drive stocks back up going into the November election.
At the lows yesterday, the DJIA was down 8.5%; the S&P 500 down 8.4%, and the Nasdaq Comp. down 12.9% from September 3.
The drop was blamed on the fact COVID is not going away any time soon, and a decline in the key Chicago Fed Activity Index, which suggests the sharp bounce from Q1 and 2’S depressed levels was losing steam.
       In addition to indicating interest rates will remain close to zero for more than a year after the FOMC meeting last Wednesday, Powell forecast a drop to 7.6% in the unemployment rate and the readiness of the Fed to purchase treasuries and mortgage-backed securities to stave off an “even deeper financial crisis.”
      Instead of rallying, the stock market declined.
My question Thursday was how can the unemployment rate decline sharply if by his admission our economy is in a deep financial crisis.”
BOTTOM LINE:

Expect a lot of attempts by Powell to drive stock prices up tomorrow, Wednesday and Thursday when he testifies before Congress.
I expect his efforts will fail in a week of two, followed by another slide in stock prices.  Odds are we have seen the highs for this market.
……………………………………………………………………………………

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
Price: Close 9/16
                    RISK  Low Mon. 9/21
Facebook (FB: 263)                       251         244     Close:     248
Amazon (AMZN:3,078)             2,907       2,871    Close:  2,953
Apple (AAPL: 112)                         103         103    Close:     109
Netflix: (NFLX: 483)                       437         466     Close:    487
Google (GOOG: 1,520)              1,451       1,406   Close:  1,470
Tesla (TSLA: 441)                           377          407    Close:    449
Microsoft (MSFT: 215)                 191          196     Close:   202
Rebounds can carry to FB:254; AMZN:3,000; AAPL: 112; NFLX: 466; GOOG: 1,458; 457; MSFT: 209.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     RECENT POSTS:
Monday   September 21, 2020 (DJIA: 27,657)  “Powell Bubble Bursting ?”
     The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday  September 18, 2020 (DJIA: 27,902) “2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tuesday September 15, 2020 (DJIA: 27,993) “What’s Wrong With This Picture”
It appears that absolutely NOTHING can stop this bull market.
    So what if the DJIA dropped 38.4% in 21 days, the S&P 50035.4% and Nasdaq Comp. 32.6% when COVID-19 struck in February
The market came roaring back, as if a recession starting in February was fake news.
So what if there has never been a recession without a bear market.
So what if 30 million  Americans are out of work or opt not to return for fear of COVID risk.
So what if America has never been divided this much since the Civil War.
So what if we are governed by an Administration that is better known for misinformation than accurate information.
So what if we are being lied to relentlessly about issues of great significance to each and everyone of us.
So what if issues of enormous importance to young people’s future have been politicized and sidelined – environment, healthcare and the nation’s financial security.
So what if we have turned our backs on long-standing international allies.
So what if  our stock markets are more overvalued based on time tested measures of value than at any time in history.
None of this makes a difference, does it ?
Clearly not to investors who look past the warning signs, the cracks in the foundation that warn of  a bubble that won’t stop inflating until all those who “fear  missing out”  (FOMO) are on board the train they worried was leaving the station without them.”

This is the kind of stuff bubbles are made of, this is how investors get blindsided en route to financial ruin.
The Street is betting on COVID-19 simply going away, or weeding out the weaker ones while the stronger (luckier) flourish.
BOTTOM LINE:
What’s wrong with this picture ?
        Too much for comfort !
       Investors should raise cash in line with their tolerance for risk, and sit close to the exit with the rest of one’s portfolio.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Powell Bubble #2 Bursting ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,657
S&P 500: 3,319
Nasdaq Comp.:10,793
Russell:1,536
Monday September 21, 2020   
9:11 a.m.
……………………………………..
brooksie01@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The sell-off that started September 3 will continue this morning with an ugly open, which stands to break support levels established ten days ago.
How far down this time without positive news will depend on what Fed Chief Jerome Powell says tomorrow and Wednesday when he testifies before Congress.
As noted here since January 2019, Powell has  goosed the market at every turn, sometimes so subtly as to be effective but not obvious to the average reader, other times with action through cuts in interest rates and forecasts on unemployment and the economy.
I have documented his actions, other investment publishers, as well (“The Powell Put”)
What’s wrong with that ?
        PLENTY !  He is manipulating the stock market and interfering with the free flow of stock prices. In 2019, it led to bubble #1.  And, IMHO since March,  led to bubble #2.
So, without Powell’s positive input, I see the DJIA dropping to 26,400, the S&P 500: 3,180 and the Nasdaq Comp. to 10,300.

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     RECENT POSTS:
Friday  September 18, 2020 (DJIA: 27,902) “
2021 Stock Trader’s Almanac off the Press.   Can It Give Advance On Winner of Election ?

The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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Tuesday September 15, 2020 (DJIA: 27,993) “What’s Wrong With This Picture”
It appears that absolutely NOTHING can stop this bull market.
    So what if the DJIA dropped 38.4% in 21 days, the S&P 50035.4% and Nasdaq Comp. 32.6% when COVID-19 struck in February
The market came roaring back, as if a recession starting in February was fake news.
So what if there has never been a recession without a bear market.
So what if 30 million  Americans are out of work or opt not to return for fear of COVID risk.
So what if America has never been divided this much since the Civil War.
So what if we are governed by an Administration that is better known for misinformation than accurate information.
So what if we are being lied to relentlessly about issues of great significance to each and everyone of us.
So what if issues of enormous importance to young people’s future have been politicized and sidelined – environment, healthcare and the nation’s financial security.
So what if we have turned our backs on long-standing international allies.
So what if  our stock markets are more overvalued based on time tested measures of value than at any time in history.
None of this makes a difference, does it ?
Clearly not to investors who look past the warning signs, the cracks in the foundation that warn of  a bubble that won’t stop inflating until all those who “fear  missing out”  (FOMO) are on board the train they worried was leaving the station without them.”

This is the kind of stuff bubbles are made of, this is how investors get blindsided en route to financial ruin.
The Street is betting on COVID-19 simply going away, or weeding out the weaker ones while the stronger (luckier) flourish.
BOTTOM LINE:
What’s wrong with this picture ?
        Too much for comfort !
       Investors should raise cash in line with their tolerance for risk, and sit close to the exit with the rest of one’s portfolio.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 14, 2020 (DJIA:27,993) “Post Election Hype in Drivers’ Seat”
We are in the long agonizing countdown to November 3 and it is unwinding pretty much like I have said it will.
The three amigos, the Fed, the Administration, and Street want President Trump to win and will stop at nothing to make it happen.
While  Fed Chief Powell was appointed to the job of his dreams by Trump, it cannot be assumed he owes the president anything, but he will probably not be the Chief for long after a Biden win.
Regardless of who one supports, the Fed’s support for stock prices albeit at very inflated levels will continue at least until November.  Powell has a presser at 2:30 Wednesday.
Administration hype is a given, the biggest message will be an announcement of a  treatment/vaccine  before the election, which will not give fact-checkers a chance to verify.
The Street wants the party to go on forever, which is fine as parties go, but investors are getting sucked into the market at increasingly higher and higher levels of overvaluation. Bloomberg headlines a Goldman, Deutsche opinion that “The U.S. stock selloff may be close to an end.”
BOTTOM LINE:
  The bias for the market is up, though historically September and October can be very dangerous months to own stocks
A Vaccine before election day is today’s hype with speculation that Pfizer (PFE) may be the first to present a vaccine before the election.   Wednesday, the Fed may once again goose the market with additional comments about interest rates remaining close to zero for years.
The major market indexes should be able to launch an attack on September highs (DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 12,074. Again, any rally failures in coming days would be a warning signal that sellers await  higher prices to unload big positions.
September and October can be dangerous months to be long stocks.  A powerful surge in stocks through October would signal a Trump re-election, major weakness would signal a change in the presidency and Senate.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday  September 11, 2020 (DJIA: 27,535) “Have Street’s algos been Adjusted For Risk ?”

The bulls charged out of the gate in early trading yesterday looking like they were  ready to run the table, but hit a wall, and it was all downhill from there, taking all three major market indexes  back to test the lows hit three days ago ( DJIA: 27,464;  S&P 500: 3,329;  Nasdaq Comp.: 10,877).
In this tug of war, rally failures are key to who is really in charge.  After a rally failure yesterday where the market indexes closed at the lows for the day, the market is now probing for a level that discounts  known and perceived negatives and positives, the major one being gross overvaluation of equities.
Only six days ago the market indexes were hitting new highs.  How quickly things change.
      MY blog six days ago was headlined , A “W” not a “V” ?, warning  readers of a stall in the rebounding economic indicators from depressed levels and another plunge based on unprecedented job losses, business failures and reduced spending.
I quoted Evercore ISI’s Ernie Tedeshi as pointing out that three times as many jobs have been lost and four times as many people on government unemployment insurance than during the Great Recession of 2007 -2009.
That bear market was accompanied by a drop of 57% in the S&P 500.
Bad stuff can happen
, it has been a long time since the Great Recession.
The 35% plunge in the S&P 500 in February/March this year was over so quickly investors were not aware of its magnitude.
Put another way, the Street doesn’t respect what can happen when a real bear market roils stocks relentlessly to the point investors begin to worry if the market will ever recover, many selling out at the bottom.
BOTTOM LINE:
      The market will open once again on a positive note as some of the Street’s algorithms go into their automatic pilot mode, buying blindly without regard to looming negatives and uncertainties.
Has anything changed ?  Have analysts begun to adjust their algos for risk, resulting in a change to less buying, even selling  due to new concerns that a “V”- shaped economic recovery will be more like an “L” or a “W” ?
If suddenly reliable buying  vanishes, we will see a flash crash until stocks find a level that discounts uncertainties and negatives as economic dominoes continue to tumble once beyond a bounce off Q1 depressed levels.
SUPPORT:
DJIA: 26,967
S&P 500: 3,267
Nasdaq Comp.:10,617
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

2021 Stock Trader’s Almanac off the Press. Can It Give Advance On Winner of Election ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,901
S&P 500: 3,357
Nasdaq Comp.:10,910
Russell:1,543
Friday, September 18, 2020   
9:11 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The stock market entered a  correction  on September 3 resulting in declines of  6.0% for the DJIA, 7.7% for the S&P 500 and 11.1% for the Nasdaq Comp..
While the markets opened sharply lower yesterday, the bears were unable to generate enough clout to break the major market averages down.
      Support is now: DJIA: 27,767; S&P 500: 3,341 and Nasdaq Comp.: 10,873.
Savvy from the Stock Trader’s Almanac:   

October may evoke bad memories of anyone who has been investing  over the last 25 years what with massacres in 1978 and 1979, 1989 and a 733-point plunge October 15, 2009
In fact, in the week ending October 10, 2008, the DJIA lost 1,874 points (18.2%), the worst weekly decline going back to 1901.
While October has surrendered its stigma as the worst month for owning stocks to March, it is now known as the “bear killer,” with 12 bear markets since WW II ending  in October.
October may be an exception this time, since this is a presidential election year where October has proven to rank last among the 12 months.
October has advanced in years when the incumbent party is re-elected and declined when ousted. Since 1944, the market advanced 7 times, declined twice and was unchanged once when the incumbents won another  four years.
When ousted, the market declined 6 times and advanced  3 times.

NOTE:  I have owned every Stock Trader’s Almanac since 1968. It is a must for investors, a treasure trove of savvy and excitement, a compilation of all  things you should know.   The 2021 edition is out. Call: 845-875-9582
BOTTOM LINE:
Pre-election jitters have engulfed the market since early September and stand to create a lot of volatility going forward.  While growth stocks have been leaders since the March 23 lows, a rotation to industrials and possibly semiconductor stocks is possible near-term.
It is not only a stock-pickers market, but a market best suited for the nimble trader who can strike quickly, but bail out if a stock fails to follow through.
There is a huge risk of another leg down from here.
Yesterday, I was disturbed by  the fact the market declined in face of enormous hype by Fed Chief Powell who said Wednesday unemployment would drop to 7.6% by year-end and 5.5% next year, that interest rates would remain close to zero and the Fed may be  buying treasuries and agency backed securities going forward.
Powell also said the economy needs further fiscal stimulus.
All this begs the question:  Why does the Fed have to do all these things and why does Congress need another stimulus package unless our economy is in serious trouble. If that is the case, how on earth could unemployment decline sharply if we will be mired in a recession or sink into a depression in coming months ?
Given that, how can buying stocks at levels more overvalued than at any time in history be justified ?
 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     RECENT POSTS:
Thursday September 17, 2020 (DJIA: 28,032) “Has a Major Correction Started”

The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
Price: Close 9/16
                    RISK  
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tuesday September 15, 2020 (DJIA: 27,993) “What’s Wrong With This Picture”
It appears that absolutely NOTHING can stop this bull market.
    So what if the DJIA dropped 38.4% in 21 days, the S&P 50035.4% and Nasdaq Comp. 32.6% when COVID-19 struck in February
The market came roaring back, as if a recession starting in February was fake news.
So what if there has never been a recession without a bear market.
So what if 30 million  Americans are out of work or opt not to return for fear of COVID risk.
So what if America has never been divided this much since the Civil War.
So what if we are governed by an Administration that is better known for misinformation than accurate information.
So what if we are being lied to relentlessly about issues of great significance to each and everyone of us.
So what if issues of enormous importance to young people’s future have been politicized and sidelined – environment, healthcare and the nation’s financial security.
So what if we have turned our backs on long-standing international allies.
So what if  our stock markets are more overvalued based on time tested measures of value than at any time in history.
None of this makes a difference, does it ?
Clearly not to investors who look past the warning signs, the cracks in the foundation that warn of  a bubble that won’t stop inflating until all those who “fear  missing out”  (FOMO) are on board the train they worried was leaving the station without them.”

This is the kind of stuff bubbles are made of, this is how investors get blindsided en route to financial ruin.
The Street is betting on COVID-19 simply going away, or weeding out the weaker ones while the stronger (luckier) flourish.
BOTTOM LINE:
What’s wrong with this picture ?
        Too much for comfort !
       Investors should raise cash in line with their tolerance for risk, and sit close to the exit with the rest of one’s portfolio.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 14, 2020 (DJIA:27,993) “Post Election Hype in Drivers’ Seat”
We are in the long agonizing countdown to November 3 and it is unwinding pretty much like I have said it will.
The three amigos, the Fed, the Administration, and Street want President Trump to win and will stop at nothing to make it happen.
While  Fed Chief Powell was appointed to the job of his dreams by Trump, it cannot be assumed he owes the president anything, but he will probably not be the Chief for long after a Biden win.
Regardless of who one supports, the Fed’s support for stock prices albeit at very inflated levels will continue at least until November.  Powell has a presser at 2:30 Wednesday.
Administration hype is a given, the biggest message will be an announcement of a  treatment/vaccine  before the election, which will not give fact-checkers a chance to verify.
The Street wants the party to go on forever, which is fine as parties go, but investors are getting sucked into the market at increasingly higher and higher levels of overvaluation. Bloomberg headlines a Goldman, Deutsche opinion that “The U.S. stock selloff may be close to an end.”
BOTTOM LINE:
  The bias for the market is up, though historically September and October can be very dangerous months to own stocks
A Vaccine before election day is today’s hype with speculation that Pfizer (PFE) may be the first to present a vaccine before the election.   Wednesday, the Fed may once again goose the market with additional comments about interest rates remaining close to zero for years.
The major market indexes should be able to launch an attack on September highs (DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 12,074. Again, any rally failures in coming days would be a warning signal that sellers await  higher prices to unload big positions.
September and October can be dangerous months to be long stocks.  A powerful surge in stocks through October would signal a Trump re-election, major weakness would signal a change in the presidency and Senate.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday  September 11, 2020 (DJIA: 27,535) “Have Street’s algos been Adjusted For Risk ?”

The bulls charged out of the gate in early trading yesterday looking like they were  ready to run the table, but hit a wall, and it was all downhill from there, taking all three major market indexes  back to test the lows hit three days ago ( DJIA: 27,464;  S&P 500: 3,329;  Nasdaq Comp.: 10,877).
In this tug of war, rally failures are key to who is really in charge.  After a rally failure yesterday where the market indexes closed at the lows for the day, the market is now probing for a level that discounts  known and perceived negatives and positives, the major one being gross overvaluation of equities.
Only six days ago the market indexes were hitting new highs.  How quickly things change.
      MY blog six days ago was headlined , A “W” not a “V” ?, warning  readers of a stall in the rebounding economic indicators from depressed levels and another plunge based on unprecedented job losses, business failures and reduced spending.
I quoted Evercore ISI’s Ernie Tedeshi as pointing out that three times as many jobs have been lost and four times as many people on government unemployment insurance than during the Great Recession of 2007 -2009.
That bear market was accompanied by a drop of 57% in the S&P 500.
Bad stuff can happen
, it has been a long time since the Great Recession.
The 35% plunge in the S&P 500 in February/March this year was over so quickly investors were not aware of its magnitude.
Put another way, the Street doesn’t respect what can happen when a real bear market roils stocks relentlessly to the point investors begin to worry if the market will ever recover, many selling out at the bottom.
BOTTOM LINE:
      The market will open once again on a positive note as some of the Street’s algorithms go into their automatic pilot mode, buying blindly without regard to looming negatives and uncertainties.
Has anything changed ?  Have analysts begun to adjust their algos for risk, resulting in a change to less buying, even selling  due to new concerns that a “V”- shaped economic recovery will be more like an “L” or a “W” ?
If suddenly reliable buying  vanishes, we will see a flash crash until stocks find a level that discounts uncertainties and negatives as economic dominoes continue to tumble once beyond a bounce off Q1 depressed levels.
SUPPORT:
DJIA: 26,967
S&P 500: 3,267
Nasdaq Comp.:10,617
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Thursday September 10, 2020 (DJIA: 27,940) “Bulls must regain momentum, or….”      When futures trading indicated a strong open for the market yesterday, I wrote that the rally throughout the day had to hold its gain or it would be a sign of weakness, i.e., no room for rally failures if you’re a bull.
      All market indexes exceeded  my resistance projections, but closed below  the day’s highs.  That is not what a robust rally looks like.
Futures indicate lower prices at the open today, so  the bulls will get another chance to demonstrate their strength. If they can override the selling at the open, they may just extend yesterday’s rally.
       Think tug of war where first one side looks like it is winning only to suddenly lose their edge when the other side gains the upper hand.
The simplicity of this analogy may not pass a quad’s need for complexity, but this is a game where humans tend to be human at times as greed and fear take the hand.
The failure of the bulls to close the day’s trading at the highs for the day indicates there are sellers out there, enough to  hold off the bulls.
We will see what the bulls have in their arsenal today.  A sharp reversal of selling between the open and 11 a.m. would lead to more upside.
However if it’s a no show by the bulls, the overdue correction I have been waiting for may by underway.
Expect an  enormous amount of unsubstantiated hype going into the election from the Fed, the  Administration and the Street. There will be talk about an economic recovery, a vaccine for COVID-19 and  a stimulus.
Resistance:
DJIA: 28,047
S&P 500:3,409
Nasdaq Comp.:11,176
…………………………………………………………………………………………………..
BOTTOM LINE:
      This is now a war between bulls and bears.  The bulls are hoping for a host of “fear-of-missing-out” buyers paying up for the overpriced stocks they buy, the bears are hoping for a rotation of strength out of growth stocks and into more stable industrials.  Both are historically overvalued and especially if corporate earnings fail to snap back quickly.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday  September 9, 2020 (DJIA: 27,500) “Phony economy, phony stock market, Phony Administration”

Here is what we are faced with now:
1) the correction over the last 3 days does not erase the extreme overvaluation of the stock market indexes.
2) Buyers will step in as they have on every correction since the March 23 bear market lows and trigger a rally.
3) If that rally is powerful, the market will return to last week’s highs.
4) if the rally lacks conviction, this correction has further to go.
5) The risk of a flash crash is high. These abrupt plunges have become the new normal. So many of these institutions track the same indicators, so it stands to reason the analysts and money managers will react in the same way, first to stop buying, second to sell.
    Expect an  enormous amount of unsubstantiated hype going into the election from the Fed, the  Administration and the Street. There will be talk about an economic recovery, vaccine for COVID-19 and  a stimulus.  All bullshit !  We have seen a “bounce” in economic indicators from Q1’s  extreme lows, but odds are that’s all it is.  I expect a “W” recovery, possibly an extended “L”, but not  a “V”, as reality of the damage done by COVID hits the Street.
6) BOTTOM LINE:
Shouldn’t say this, will lose readers, be vilified by people I know, run off the road, etc., This economy is phony, stock market phony, Fed phony, and Administration phony.
At some point, all the damage that has been done to our unity as a nation, to our pursuit of healthcare solutions, to the rule of law so critical for the preservation of our democratic “republic,” to the foundations of our economy and government, and to outright decency will have to be repaired.
We are in far worse shape than we were four years ago, except the stock market it  has continued to surge.  Something has to give and I think it is the stock market, which is historically overpriced, by 30% – 45%.
Futures trading indicate a rally at the open.  It must be strong and hold its gain through the close. No room for rally failures.
RESISTANCE: Today’s rally should begin to encounter resistance at:
DJIA: 27,717
S&P 500: 3,361
Nasdaq Comp.: 10,978
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Near-term SUPPORT is:
DJIA: 27,200
S&P 500: 3,270
Nasdaq Comp.: 10,570.
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George Brooks
Investor’s first read.com
brooksie01@aol.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.

 

 

 

 

 

 

 

 

 

 

 

 

Has a Major Correction Started ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 28,032
S&P 500: 3,385
Nasdaq Comp.:11,050
Russell:1,552
Thursday, September 17, 2020   
8:26 a.m.
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brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
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January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
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With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
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The stock market was supposed to go up, not down, after Fed Chief Powell’s last attempt to hype the market before the November 3 elections.
Futures trading indicate a weak open today.
Is this the beginning of a major correction ?
     Powell, one of the three amigos I warn will hype the stock market before the election (other two: the Administration and the Street), could not have been more bullish,  forecasting a drop  in unemployment to 7.6% by year-end, 5.5% by the end of 2021, 4% by 2023.
      Interest rates will remain near zero through 2023, he said noting the Fed may increase holdings of Treasury and agency mortgage backed securities   to stave off “an even deeper financial crisis.”
Wait a minute.  An even deeper financial crisis ?   How can unemployment drop to 7.6% this year and 5% next year if we are in a deep financial crisis  and at risk of a deeper one, at that ?
The Fed now projects a drop of 3.7% by year-end compared with  projections of a 6.5% drop in June.
What we are getting now is a bounce from severely depressed levels in Q1 and Q2, whether it is a sustained recovery is anyone’s guess at this point, including an attorney turned banker.
COVID-19 is NOT going away, odds are it rebounds again in coming months, especially in face of a lax federal policy.  The key here is what happens after the “bounce” ?
Odds are, Congress will pass another stimulus bill before the elections, which is expected in an election year this important.  We shouldn’t need another stimulus unless our economy is in a huge mess, and that is further proof that Powell’s rosy projections are sheer pre-election hype.
BOTTOM LINE:
Again I say: Phony stock market, phony economy and phony administration – gaslighting 101.
Yesterday’s market should have been up big. Any time the market goes counter to the norm, it is worth stepping back to ask why.
Maybe it’s nothing, maybe this dip vanishes in a day or two.
But, maybe the BIG money used Powell’s basket of bullish goodies to SELL.
       I have been wrong on this one a number of times, however,  like the silly pink rabbit, the market has always snapped back.
       Based on accurate, time-tested measures of value, this market is seriously overvalued. That WILL BE CORRECTED and when it is it will be straight down, initially 12% – 18%, then on to a decline of 45% – 60%, depending on what hits it along the way.  All it takes is for a few big hitters to scrap their “buy with your eyes closed” algos and  WHOOSH !
INITIAL RISK IN A DECLINE:
                                                          RISK
Facebook (FB: 263)                       251
Amazon (AMZN:3,078)              2,907
Apple (AAPL: 112)                         103
Netflix: (NFLX: 483)                       437
Google (GOOG: 1,520)              1,451
Tesla (TSLA: 441)                           377
Microsoft (MSFT: 215)                 191                                                                                            >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Wednesday September 17, 2020 (DJIA:28,032) “Trump Re-election: Depression and Stock Market Crash”
By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world ?
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Wednesday September 16, 2020 (DJIA: 28,308)     By now readers know where I am coming from.  No sense trying to tiptoe through this minefield, and appeal to all investors.
I think the Trump administration has done more damage to our Nation’s unity, the survival of our democratic “republic”, and our future as a nation of laws, than any foreign adversary has done, or ever dreamed of doing.
Hundreds of thousands of Americans, not one of which was a loser or sucker, gave life and limb to protect our nation from attempts to destroy it from outside or from within.
If Trump is re-elected, and the Republicans maintain control of this do-nothing Senate, we will nose-dive into a depression and chaos, a gun-toting banana republic where no one is safe, whites, people of color, not even Mr. and Mrs. “Made-it.”
       Time for the military style guns to come off the street. OK to own dozens or what it takes to be secure or up the manhood, just  not out in the public where they are dangerous and can be used to intimidate Americans.
For four years, Americans have been lied to, manipulated and disgraced, by a president who cares only for himself and a Republican Senate unwilling to even discuss 395 bills passed and brought up for consideration by the U.S. House.

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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Tuesday September 15, 2020 (DJIA: 27,993) “What’s Wrong With This Picture”
It appears that absolutely NOTHING can stop this bull market.
    So what if the DJIA dropped 38.4% in 21 days, the S&P 50035.4% and Nasdaq Comp. 32.6% when COVID-19 struck in February
The market came roaring back, as if a recession starting in February was fake news.
So what if there has never been a recession without a bear market.
So what if 30 million  Americans are out of work or opt not to return for fear of COVID risk.
So what if America has never been divided this much since the Civil War.
So what if we are governed by an Administration that is better known for misinformation than accurate information.
So what if we are being lied to relentlessly about issues of great significance to each and everyone of us.
So what if issues of enormous importance to young people’s future have been politicized and sidelined – environment, healthcare and the nation’s financial security.
So what if we have turned our backs on long-standing international allies.
So what if  our stock markets are more overvalued based on time tested measures of value than at any time in history.
None of this makes a difference, does it ?
Clearly not to investors who look past the warning signs, the cracks in the foundation that warn of  a bubble that won’t stop inflating until all those who “fear  missing out”  (FOMO) are on board the train they worried was leaving the station without them.”

This is the kind of stuff bubbles are made of, this is how investors get blindsided en route to financial ruin.
The Street is betting on COVID-19 simply going away, or weeding out the weaker ones while the stronger (luckier) flourish.
BOTTOM LINE:
What’s wrong with this picture ?
        Too much for comfort !
       Investors should raise cash in line with their tolerance for risk, and sit close to the exit with the rest of one’s portfolio.
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Monday September 14, 2020 (DJIA:27,993) “Post Election Hype in Drivers’ Seat”
We are in the long agonizing countdown to November 3 and it is unwinding pretty much like I have said it will.
The three amigos, the Fed, the Administration, and Street want President Trump to win and will stop at nothing to make it happen.
While  Fed Chief Powell was appointed to the job of his dreams by Trump, it cannot be assumed he owes the president anything, but he will probably not be the Chief for long after a Biden win.
Regardless of who one supports, the Fed’s support for stock prices albeit at very inflated levels will continue at least until November.  Powell has a presser at 2:30 Wednesday.
Administration hype is a given, the biggest message will be an announcement of a  treatment/vaccine  before the election, which will not give fact-checkers a chance to verify.
The Street wants the party to go on forever, which is fine as parties go, but investors are getting sucked into the market at increasingly higher and higher levels of overvaluation. Bloomberg headlines a Goldman, Deutsche opinion that “The U.S. stock selloff may be close to an end.”
BOTTOM LINE:
  The bias for the market is up, though historically September and October can be very dangerous months to own stocks
A Vaccine before election day is today’s hype with speculation that Pfizer (PFE) may be the first to present a vaccine before the election.   Wednesday, the Fed may once again goose the market with additional comments about interest rates remaining close to zero for years.
The major market indexes should be able to launch an attack on September highs (DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 12,074. Again, any rally failures in coming days would be a warning signal that sellers await  higher prices to unload big positions.
September and October can be dangerous months to be long stocks.  A powerful surge in stocks through October would signal a Trump re-election, major weakness would signal a change in the presidency and Senate.
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Friday  September 11, 2020 (DJIA: 27,535) “Have Street’s algos been Adjusted For Risk ?”

The bulls charged out of the gate in early trading yesterday looking like they were  ready to run the table, but hit a wall, and it was all downhill from there, taking all three major market indexes  back to test the lows hit three days ago ( DJIA: 27,464;  S&P 500: 3,329;  Nasdaq Comp.: 10,877).
In this tug of war, rally failures are key to who is really in charge.  After a rally failure yesterday where the market indexes closed at the lows for the day, the market is now probing for a level that discounts  known and perceived negatives and positives, the major one being gross overvaluation of equities.
Only six days ago the market indexes were hitting new highs.  How quickly things change.
      MY blog six days ago was headlined , A “W” not a “V” ?, warning  readers of a stall in the rebounding economic indicators from depressed levels and another plunge based on unprecedented job losses, business failures and reduced spending.
I quoted Evercore ISI’s Ernie Tedeshi as pointing out that three times as many jobs have been lost and four times as many people on government unemployment insurance than during the Great Recession of 2007 -2009.
That bear market was accompanied by a drop of 57% in the S&P 500.
Bad stuff can happen
, it has been a long time since the Great Recession.
The 35% plunge in the S&P 500 in February/March this year was over so quickly investors were not aware of its magnitude.
Put another way, the Street doesn’t respect what can happen when a real bear market roils stocks relentlessly to the point investors begin to worry if the market will ever recover, many selling out at the bottom.
BOTTOM LINE:
      The market will open once again on a positive note as some of the Street’s algorithms go into their automatic pilot mode, buying blindly without regard to looming negatives and uncertainties.
Has anything changed ?  Have analysts begun to adjust their algos for risk, resulting in a change to less buying, even selling  due to new concerns that a “V”- shaped economic recovery will be more like an “L” or a “W” ?
If suddenly reliable buying  vanishes, we will see a flash crash until stocks find a level that discounts uncertainties and negatives as economic dominoes continue to tumble once beyond a bounce off Q1 depressed levels.
SUPPORT:
DJIA: 26,967
S&P 500: 3,267
Nasdaq Comp.:10,617
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Thursday September 10, 2020 (DJIA: 27,940) “Bulls must regain momentum, or….”      When futures trading indicated a strong open for the market yesterday, I wrote that the rally throughout the day had to hold its gain or it would be a sign of weakness, i.e., no room for rally failures if you’re a bull.
      All market indexes exceeded  my resistance projections, but closed below  the day’s highs.  That is not what a robust rally looks like.
Futures indicate lower prices at the open today, so  the bulls will get another chance to demonstrate their strength. If they can override the selling at the open, they may just extend yesterday’s rally.
       Think tug of war where first one side looks like it is winning only to suddenly lose their edge when the other side gains the upper hand.
The simplicity of this analogy may not pass a quad’s need for complexity, but this is a game where humans tend to be human at times as greed and fear take the hand.
The failure of the bulls to close the day’s trading at the highs for the day indicates there are sellers out there, enough to  hold off the bulls.
We will see what the bulls have in their arsenal today.  A sharp reversal of selling between the open and 11 a.m. would lead to more upside.
However if it’s a no show by the bulls, the overdue correction I have been waiting for may by underway.
Expect an  enormous amount of unsubstantiated hype going into the election from the Fed, the  Administration and the Street. There will be talk about an economic recovery, a vaccine for COVID-19 and  a stimulus.
Resistance:
DJIA: 28,047
S&P 500:3,409
Nasdaq Comp.:11,176
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BOTTOM LINE:
      This is now a war between bulls and bears.  The bulls are hoping for a host of “fear-of-missing-out” buyers paying up for the overpriced stocks they buy, the bears are hoping for a rotation of strength out of growth stocks and into more stable industrials.  Both are historically overvalued and especially if corporate earnings fail to snap back quickly.

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Wednesday  September 9, 2020 (DJIA: 27,500) “Phony economy, phony stock market, Phony Administration”

Here is what we are faced with now:
1) the correction over the last 3 days does not erase the extreme overvaluation of the stock market indexes.
2) Buyers will step in as they have on every correction since the March 23 bear market lows and trigger a rally.
3) If that rally is powerful, the market will return to last week’s highs.
4) if the rally lacks conviction, this correction has further to go.
5) The risk of a flash crash is high. These abrupt plunges have become the new normal. So many of these institutions track the same indicators, so it stands to reason the analysts and money managers will react in the same way, first to stop buying, second to sell.
    Expect an  enormous amount of unsubstantiated hype going into the election from the Fed, the  Administration and the Street. There will be talk about an economic recovery, vaccine for COVID-19 and  a stimulus.  All bullshit !  We have seen a “bounce” in economic indicators from Q1’s  extreme lows, but odds are that’s all it is.  I expect a “W” recovery, possibly an extended “L”, but not  a “V”, as reality of the damage done by COVID hits the Street.
6) BOTTOM LINE:
Shouldn’t say this, will lose readers, be vilified by people I know, run off the road, etc., This economy is phony, stock market phony, Fed phony, and Administration phony.
At some point, all the damage that has been done to our unity as a nation, to our pursuit of healthcare solutions, to the rule of law so critical for the preservation of our democratic “republic,” to the foundations of our economy and government, and to outright decency will have to be repaired.
We are in far worse shape than we were four years ago, except the stock market it  has continued to surge.  Something has to give and I think it is the stock market, which is historically overpriced, by 30% – 45%.
Futures trading indicate a rally at the open.  It must be strong and hold its gain through the close. No room for rally failures.
RESISTANCE: Today’s rally should begin to encounter resistance at:
DJIA: 27,717
S&P 500: 3,361
Nasdaq Comp.: 10,978
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Near-term SUPPORT is:
DJIA: 27,200
S&P 500: 3,270
Nasdaq Comp.: 10,570.
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Tuesday  September 8, 2020 (DJIA: 28,133) : “Bulls on the Ropes”

The sharp sell off Thursday and Friday created a greenstick fracture in the major market averages meaning this may be the beginning of a major correction.
The DJIA stabilized after bouncing off a major up-trendline, both the S&P 500 and Nasdaq Comp. recovered after breaking their trendlines.
Essentially, that means the tug of war between bulls and bears is now favoring the bears.
Today will open on the downside to test Friday’s lows
DJIA: 27,664
S&P500: 3,349
Nasdaq Comp.: 10,875)
We must now start to study rally attempts.  Can they follow through, or do they fail.  Obviously, the latter indicates a lower market, in this case a test of the next support level at:
DJIA: 27,200
S&P 500: 3,270
Nasdaq Comp.: 10,570.
These averages should run into resistance starting at:
DJIA: 28,476
S&P 500: 3,468
Nasdaq Comp.11,474.
The future of COVID-19 defies analysis. Potential vaccines will be announced before the election, but practical application before 2021 is doubtful.
The Street is betting on an economic recovery this year, but even if the economy recovers further, continued follow through is doubtful, since so much damage has been done across the board to our economy’s infrastructure.
The timing of another stimulus package is uncertain, trade tensions remain, a number of jobs will never comeback,  and while the consumer has cash, the willingness to part with it  is a big question mark with uncertainty about the market and economy running so high.
Election rhetoric will do nothing  to  calm fears and instill confidence in government.

BOTTOM LINE:
       Why load up on stocks  when prices are so high and confidence so low ?
The stampede to buy stocks since the March 23 lows has developed into  bubble.
Every effort will be made by the three amigos (Fed, Administration, Street) to prop the market up until November 3. It will get ugly, not the environment where stocks flourish.
Odds are high that the correction will carry further than the levels I noted above.
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Friday September 4, 2020 (DJIA: 28,292) “Beware of Hype about Vaccine and Economy
DJIA down 807 pts.  (2.78%)
S&P 500 down 125 pts. (3.51%)
Nasdaq Comp. down     598 pts.  (4.9%)
Don’t tell me the algos have a conscience, or is it a smidge of acrophobia ?
      A correction was overdue with speculative fever surging and fear of missing out driving investment decisions.
Classic bubble mania.
A clue to the health of the market  will be seen today in the intensity of the rebound.
      A token rebound would be to DJIA: 28,597; S&P 500: 3,487; Nasdaq Comp.: 11,597.
Beyond that, would suggest buyers are still in panic mode.
BOTTOM LINE:
The three amigos, the Fed, Administration and Street, aren’t going to like this with 41 days left before the elections.
    Beware of:
1) in spite of yesterday’s plunge, the market is still overvalued, very overvalued based on a host of time-tested measures of value.
2) investors will be bombarded by misinformation and  baseless hype about  a vaccine and economic recovery between now and November 3.
A rally can give investors a chance to reduce risk by raising cash in line with their tolerance for risk.  A swing from growth stocks to industrials is underway with 20 of the 30 Dow Jones industrials still below pre-COVID levels.
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George Brooks
Investor’s first read.com
brooksie01@aol.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.