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INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,910
S&P 500: 3,638
Nasdaq Comp.:12,205
Russell:1,855
Invesco QQQ ETF:299
Monday   November 30, 2020      9:12 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 2020, 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 18,591 on 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. While  both have dropped below those levels, they rebounded sharply with the help of a handful of big-name growth stocks. The market averages continue to remain in  a  historically highly overvalued status in face of serious negatives.  I attribute this to buy-only algorithms, insensitive to risk, but urge a cash reserve in line with one’s tolerance for risk.
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TO:  Readers of  Investor’s first read.com

Dear reader

I have decided to discontinue  my web site ”investors first read. Com”.
I have published this daily stock market blog before the open for 12 years.

I will continue to publish frequently as market opportunities develop,  but not on a daily basis.  I will continue to distribute to a select email list, as I have always done.

    Website readers can continue to receive my blog by sending their email address to me at brooksie01@aol.com.

I launched my daily blog in June 2008 as the Great Recession/Bear Market got underway with a goal to keep readers out of the market until it was safe to enter.

On February 24, 2009, I began my COUNTDOWN  to the bear market bottom with “Does the Cauldron of Fear Have to Boil Before this Market turns (DJIA: 7,114).
I followed with “Lock and Load, a surge of 2,000 points in DJIA Imminent” ( Feb. 27, 2009 – DJIA: 7,182);
Then  $9 Trillion Cash on the Sidelines vs $8 Trillion NYSE Market Value” (Mar. 2, 2009 – DJIA: 7,092);
“Big Money Reaching for the Bushel Basket” (Mar. 3, 2009 – DJIA: 6,818);      “Climactic Buy Possible Tuesday” ( Mar. 5, 2009 – DJIA 6,875);
“Be Ready for a Big Buying Opportunity” (Mar. 9, 2008 – DJIA: 6,626)
Tuesday, March 10, 2009 (DJIA: 6,626)   Special BULLETIN  “BUY”, the bottom of the Great Bear Market.

     How could I not continue writing.
A lot has changed since then.

To a much greater extent, the market is now micro-managed by the Fed and the algorithms of powerful institutions, as evidenced by its extreme overvaluation and indifference to “risk,” which was not the case when humans were more hands-on.
The flash crash has become the norm where corrections are abrupt and sharp, as are recoveries, raising a question in my mind if many flash crashes are themselves micro-managed.

Over the last 52 years,  I have called a lot of key market turns, written extensively about economics,  fundamentals, monetary, and psychological issues, been a frequent guest analyst on CNBC-TV  and told the story of more than 8oo fascinating small growth companies.

    All this was during a period that encompassed 9 recessions/recoveries and  15 bear/bull markets , numerous crises and challenging events: war, assassinations, oil embargoes, meltdowns, Institutional bankruptcies, government bailouts.  In 1971, Institutions comprised 17% of stock ownership, today it is close to 80%.                                                                                                                           

       I will keep publishing, daily in wild markets, but less often in indecisive markets.

George Brooks    –  November 29, 2020

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RECENT POSTS:
Tuesday  November 24, 2020 (DJIA:29,591)  “Stock Pickers Market, But Not Without Risk”   A return to civility should be worth a few points for the market averages, but   investors must be aware that the market averages/indexes are historically overvalued….by a lot.
What does that mean ?
A lot if you got caught in any of the flash crashes in the past, especially   if you were blindsided by COVID-19 in February/March where the DJIA plunged 38.4% in 21 days.
OK, so it rebounded to recoup all of that loss and then some, but as the market was crashing I suspect a lot on investors were selling, fearful that it wouldn’t rebound worse yet drop further.  After all, the S&P 500 dropped 50.5% in the 2000 dot-com crash and 57.6% in the 2007-2009 Great Recession.
Most individual investors cannot afford to take a big hit, especially if they are up in years when tapping the portfolio may be necessary after a steady income no longer pays the bills.  The same is true if an investor faced big tuition bills, uncovered medical bills or a down payment on a house.
So, timing is critical for the individual investor and caution is warranted when stocks are overvalued.  Cash earns nothing out there, but it does reduce the bite of a correction, as well as give an investor a chance to buy in at lower prices should a correction develop.
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Estimated trading Range Today:
DJIA:  29,891  – 29,563
S&P 500: 3,613  – 3,575
Nasdaq Comp.: 11,951 – 11,861
QQQ:    292.15 – 290.50
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PFE: 36.87 – 36.30
MRNA: 103 – 100
AZN: 55.20 – 54.30
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Monday  November 23, 2020 (DJIA: 29,263) “Vaccine Mania to Top COVID Surge For Street’s Focus”
Vaccines and COVID infections are jousting for the Street’s focus today.
The surge in infections has been with us for months and has had zero impact on stock prices.   The reality of vaccines is just dawning on the public, and it is beginning to show in the firmness of vaccine stocks and a stall in the stocks of companies that benefitted from a stay-at-home economy.
There is still a question of distribution, which company’s vaccine is going to benefit, and will enough people opt for it to make a difference.
While there are signs of a stall in the economic recovery since March/April, there may be enough oomph in the economic bounce to prompt the National Bureau of Economic Research (NBER) to declare the recession is over. They are the decider, yet the economy’s  crunch/rebound is nothing they have dealt with before.
The Street has been moving ahead anyway.  In this market, it doesn’t seem like the Street cares about recessions or declines in corporate earnings like it has in the past.
         I attribute this indifference to algorithms which, while programmed by humans, are rarely adjusted for risk.  Clearly, risk has raised its ugly head a number of times over the last two years, but there are buyers on dips and at the market, as well  at higher prices.
Overvalued
based on historical precedent ?  Damn right.   Vulnerable ?  Yep.
BOTTOM LINE:
Have enough of a cash reserve in line with one’s tolerance for risk, because the new normal, a flash crash, can happen at any time.  Cash is an investment if it tempers a big loss in a market correction. It also gives an investor a stash to tap in buying stocks at lower prices.
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Estimated trading Range Today:
DJIA:  29,460 – 29,300
S&P 500: 3,576 – 3,560
Nasdaq Comp.11,891 – 11,850
QQQ:    29.75 – 29.45
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PFE: 38.00 – 36.70
MRNA: 102 – 97.30

 

Thursday November 19, 2020 (DJIA: 29,438) “COViD-19 Crash # 2 ?”

I see tiny cracks in the foundation of the tech leaders, but that may be portfolio adjustments ahead of the year-end.   Switching out of big-name growth stocks that by themselves have carried the market back up to all-time highs  from a 21-day, 35% plunge in February/March ?
But switch into what ?  What will be immune to COVID-19’s rage ?
By now, we should know that the flash crash is the new normal in corrections. And it not just COVID that is raising the possibility of a crash. It’s the refusal of the Trump administration to accept defeat and assure a transition to a new government.
We know what damage COVID can do, we don’t know what damage this administration can do in the next 26 days, and that is scary.
What is wrong with these people ?
Could an agent of a foreign adversary do more damage.  For love of country, for respect for all those who have sacrificed in defense of our democratic constitutional representative republic, why  can’t  Republican Senators  stand up to him ?  A disgrace and a danger to all America.  He lost…they lost.. but America must not be the loser.
What has happened to a nation that once valued honesty, truth, hard work, commitment to excellence in governance.  Bullies, cowards (5 drafty deferrals) and pathological liars were once disrespected.
What is is ? outright racists, closet racists, people unhappy with their limitations, career, jobs, family, lack of opportunity, fear of competition. Is it deviancy Down, people dislike for those smarter  better educated, higher skilled and a determination to dumb everything down to their level.  Or Confirmation bias, hanging on to beliefs even in face of bullet proof evidence to the contrary.
Wall Street is as clueless as his followers.   We have a third wave of COVID-19 rising in its blackness, towering like a rogue wave ready to crash.

Estimated trading Range Today:
DJIA:  29,9526 – 29,310
S&P 500: 3,577 – 3,541
Nasdaq Comp.11,839 – 11,670
QQQ:    291 – 287

PFE: 36.70 – 36.00
MRNA: 93.3 – 88.60
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Est. trading range today (Nov.19)
FB: 273.30  –  267
AMZN: 3,131 – 3,115
AAPL: 118.80 – 115.70
NFLX: 483.60 – 478
GOOG: 1,751 – 1,721
TSLA: 517 – 471
MSFT: 212 – 209
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Wednesday November 18, 2020 (DJIA: 29,783) “ Best 6 Months Starts With Market at All-Time Highs”
     The market is tiptoeing through a minefield here. The Street is gearing up for the classic best six months of the year (Nov. – Apr.), a consistent bullish pattern going back to 1950 discovered  by the Stock Trader’s Almanac (2021 now available).
Its consistency will be challenged by the fact lift-off here is beginning as the market is hitting all-time highs.
     I am bullish on the election results, holding my breath the outgoing administration doesn’t do something stupid and dangerous before it is shown the door. I am not bullish on the transition which for the first time ever is being impeded.
The risk here is another COVID-induced slump following the sharp rebound in the economy since recession lows in February – March.
BOTTOM LINE:
   It is a stock picker’s market, but not a riskless market. The new normal is the flash crash, a vertical freefall in prices of 12% – 18%.   The last one we have seen is the February – March 35% – 21-day  plunge. It can happen.  COVID did it then, and could do it again.

Estimated trading Range Today:
DJIA:  29,921 – 29,775
S&P 500: 3,624 – 3,66
Nasdaq Comp.11,936 – 11,889
QQQ:    293– 291.9

 

PFE: 37,90 – 35.80
MRNA: 95 – 89.3
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Tuesday  November 17, 2020 (DJIA:29,950) “Market Rigged ?”

Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
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BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
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Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open
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Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
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      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
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BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
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Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
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There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
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Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
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That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272
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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.

 

 

 

 

 

 

Stock Pickers Market, But Not Without RISK !

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,591
S&P 500: 3,577
Nasdaq Comp.:11,880
Russell:1,818
Invesco QQQ ETF:290.39
Tuesday   November 24, 2020      8:58 a.m.
NOTE:  UNLESS THERE IS A MAJOR DEVELOPMENT BETWEEN NOW AND MONDAY,  I WILL NOT PUBLISH .  ENJOY YOUR THANKSGIVING.

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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 18,591 on 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. While  both have dropped below those levels, they rebounded sharply with the help of a handful of big-name growth stocks. The market averages continue to remain in  a  historically highly overvalued status in face of serious negatives.  I attribute this to buy-only algorithms, insensitive to risk, but urge a cash reserve in line with one’s tolerance for risk.
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A return to civility should be worth a few points for the market averages, but   investors must be aware that the market averages/indexes are historically overvalued….by a lot.
What does that mean ?
A lot if you got caught in any of the flash crashes in the past, especially   if you were blindsided by COVID-19 in February/March where the DJIA plunged 38.4% in 21 days.
OK, so it rebounded to recoup all of that loss and then some, but as the market was crashing I suspect a lot on investors were selling, fearful that it wouldn’t rebound worse yet drop further.  After all, the S&P 500 dropped 50.5% in the 2000 dot-com crash and 57.6% in the 2007-2009 Great Recession.
Most individual investors cannot afford to take a big hit, especially if they are up in years when tapping the portfolio may be necessary after a steady income no longer pays the bills.  The same is true if an investor faced big tuition bills, uncovered medical bills or a down payment on a house.
So, timing is critical for the individual investor and caution is warranted when stocks are overvalued.  Cash earns nothing out there, but it does reduce the bite of a correction, as well as give an investor a chance to buy in at lower prices should a correction develop.
…………………………………………………………………………………………….
Estimated trading Range Today:
DJIA:  29,891  – 29,563
S&P 500: 3,613  – 3,575
Nasdaq Comp.: 11,951 – 11,861
QQQ:    292.15 – 290.50
………………………………………………………………………………….

PFE: 36.87 – 36.30
MRNA: 103 – 100
AZN: 55.20 – 54.30
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RECENT POSTS:
Monday  November 23, 2020 (DJIA: 29,263) “Vaccine Mania to Top COVID Surge For Street’s Focus”
Vaccines and COVID infections are jousting for the Street’s focus today.
The surge in infections has been with us for months and has had zero impact on stock prices.   The reality of vaccines is just dawning on the public, and it is beginning to show in the firmness of vaccine stocks and a stall in the stocks of companies that benefitted from a stay-at-home economy.
There is still a question of distribution, which company’s vaccine is going to benefit, and will enough people opt for it to make a difference.
While there are signs of a stall in the economic recovery since March/April, there may be enough oomph in the economic bounce to prompt the National Bureau of Economic Research (NBER) to declare the recession is over. They are the decider, yet the economy’s  crunch/rebound is nothing they have dealt with before.
The Street has been moving ahead anyway.  In this market, it doesn’t seem like the Street cares about recessions or declines in corporate earnings like it has in the past.
         I attribute this indifference to algorithms which, while programmed by humans, are rarely adjusted for risk.  Clearly, risk has raised its ugly head a number of times over the last two years, but there are buyers on dips and at the market, as well  at higher prices.
Overvalued
based on historical precedent ?  Damn right.   Vulnerable ?  Yep.
BOTTOM LINE:
Have enough of a cash reserve in line with one’s tolerance for risk, because the new normal, a flash crash, can happen at any time.  Cash is an investment if it tempers a big loss in a market correction. It also gives an investor a stash to tap in buying stocks at lower prices.
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Estimated trading Range Today:
DJIA:  29,460 – 29,300
S&P 500: 3,576 – 3,560
Nasdaq Comp.11,891 – 11,850
QQQ:    29.75 – 29.45
………………………………………………………………………………….

PFE: 38.00 – 36.70
MRNA: 102 – 97.30

 

Thursday November 19, 2020 (DJIA: 29,438) “COViD-19 Crash # 2 ?”

I see tiny cracks in the foundation of the tech leaders, but that may be portfolio adjustments ahead of the year-end.   Switching out of big-name growth stocks that by themselves have carried the market back up to all-time highs  from a 21-day, 35% plunge in February/March ?
But switch into what ?  What will be immune to COVID-19’s rage ?
By now, we should know that the flash crash is the new normal in corrections. And it not just COVID that is raising the possibility of a crash. It’s the refusal of the Trump administration to accept defeat and assure a transition to a new government.
We know what damage COVID can do, we don’t know what damage this administration can do in the next 26 days, and that is scary.
What is wrong with these people ?
Could an agent of a foreign adversary do more damage.  For love of country, for respect for all those who have sacrificed in defense of our democratic constitutional representative republic, why  can’t  Republican Senators  stand up to him ?  A disgrace and a danger to all America.  He lost…they lost.. but America must not be the loser.
What has happened to a nation that once valued honesty, truth, hard work, commitment to excellence in governance.  Bullies, cowards (5 drafty deferrals) and pathological liars were once disrespected.
What is is ? outright racists, closet racists, people unhappy with their limitations, career, jobs, family, lack of opportunity, fear of competition. Is it deviancy Down, people dislike for those smarter  better educated, higher skilled and a determination to dumb everything down to their level.  Or Confirmation bias, hanging on to beliefs even in face of bullet proof evidence to the contrary.
Wall Street is as clueless as his followers.   We have a third wave of COVID-19 rising in its blackness, towering like a rogue wave ready to crash.

Estimated trading Range Today:
DJIA:  29,9526 – 29,310
S&P 500: 3,577 – 3,541
Nasdaq Comp.11,839 – 11,670
QQQ:    291 – 287

PFE: 36.70 – 36.00
MRNA: 93.3 – 88.60
……………………..
Est. trading range today (Nov.19)
FB: 273.30  –  267
AMZN: 3,131 – 3,115
AAPL: 118.80 – 115.70
NFLX: 483.60 – 478
GOOG: 1,751 – 1,721
TSLA: 517 – 471
MSFT: 212 – 209
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Wednesday November 18, 2020 (DJIA: 29,783) “ Best 6 Months Starts With Market at All-Time Highs”
     The market is tiptoeing through a minefield here. The Street is gearing up for the classic best six months of the year (Nov. – Apr.), a consistent bullish pattern going back to 1950 discovered  by the Stock Trader’s Almanac (2021 now available).
Its consistency will be challenged by the fact lift-off here is beginning as the market is hitting all-time highs.
     I am bullish on the election results, holding my breath the outgoing administration doesn’t do something stupid and dangerous before it is shown the door. I am not bullish on the transition which for the first time ever is being impeded.
The risk here is another COVID-induced slump following the sharp rebound in the economy since recession lows in February – March.
BOTTOM LINE:
   It is a stock picker’s market, but not a riskless market. The new normal is the flash crash, a vertical freefall in prices of 12% – 18%.   The last one we have seen is the February – March 35% – 21-day  plunge. It can happen.  COVID did it then, and could do it again.

Estimated trading Range Today:
DJIA:  29,921 – 29,775
S&P 500: 3,624 – 3,66
Nasdaq Comp.11,936 – 11,889
QQQ:    293– 291.9

 

PFE: 37,90 – 35.80
MRNA: 95 – 89.3
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Tuesday  November 17, 2020 (DJIA:29,950) “Market Rigged ?”

Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
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BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
………………………………………………………………………………………………………….
Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open
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Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
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Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
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There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
……………………………………………………………………………………..
Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272
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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.

 

 

 

 

 

Vaccine Mania to Top COVID Surge For Street’s Focus

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,263
S&P 500: 3,557
Nasdaq Comp.:11,854
Russell:1,785
Invesco QQQ ETF:290.38
Monday   November 23, 2020     9:10 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%.
…………………………………………………..
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Vaccines and COVID infections are jousting for the Street’s focus today.
The surge in infections has been with us for months and has had zero impact on stock prices.   The reality of vaccines is just dawning on the public, and it is beginning to show in the firmness of vaccine stocks and a stall in the stocks of companies that benefitted from a stay-at-home economy.
There is still a question of distribution, which company’s vaccine is going to benefit, and will enough people opt for it to make a difference.
While there are signs of a stall in the economic recovery since March/April, there may be enough oomph in the economic bounce to prompt the National Bureau of Economic Research (NBER) to declare the recession is over. They are the decider, yet the economy’s  crunch/rebound is nothing they have dealt with before.
The Street has been moving ahead anyway.  In this market, it doesn’t seem like the Street cares about recessions or declines in corporate earnings like it has in the past.
         I attribute this indifference to algorithms which, while programmed by humans, are rarely adjusted for risk.  Clearly, risk has raised its ugly head a number of times over the last two years, but there are buyers on dips and at the market, as well  at higher prices.
Overvalued
based on historical precedent ?  Damn right.   Vulnerable ?  Yep.
BOTTOM LINE:
Have enough of a cash reserve in line with one’s tolerance for risk, because the new normal, a flash crash, can happen at any time.  Cash is an investment if it tempers a big loss in a market correction. It also gives an investor a stash to tap in buying stocks at lower prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Estimated trading Range Today:
DJIA:  29,460 – 29,300
S&P 500: 3,576 – 3,560
Nasdaq Comp.11,891 – 11,850
QQQ:    29.75 – 29.45
………………………………………………………………………………….

PFE: 38.00 – 36.70
MRNA: 102 – 97.30
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RECENT POSTS:
Thursday November 19, 2020 (DJIA: 29,438) “COViD-19 Crash # 2 ?”

I see tiny cracks in the foundation of the tech leaders, but that may be portfolio adjustments ahead of the year-end.   Switching out of big-name growth stocks that by themselves have carried the market back up to all-time highs  from a 21-day, 35% plunge in February/March ?
But switch into what ?  What will be immune to COVID-19’s rage ?
By now, we should know that the flash crash is the new normal in corrections. And it not just COVID that is raising the possibility of a crash. It’s the refusal of the Trump administration to accept defeat and assure a transition to a new government.
We know what damage COVID can do, we don’t know what damage this administration can do in the next 26 days, and that is scary.
What is wrong with these people ?
Could an agent of a foreign adversary do more damage.  For love of country, for respect for all those who have sacrificed in defense of our democratic constitutional representative republic, why  can’t  Republican Senators  stand up to him ?  A disgrace and a danger to all America.  He lost…they lost.. but America must not be the loser.
What has happened to a nation that once valued honesty, truth, hard work, commitment to excellence in governance.  Bullies, cowards (5 drafty deferrals) and pathological liars were once disrespected.
What is is ? outright racists, closet racists, people unhappy with their limitations, career, jobs, family, lack of opportunity, fear of competition. Is it deviancy Down, people dislike for those smarter  better educated, higher skilled and a determination to dumb everything down to their level.  Or Confirmation bias, hanging on to beliefs even in face of bullet proof evidence to the contrary.
Wall Street is as clueless as his followers.   We have a third wave of COVID-19 rising in its blackness, towering like a rogue wave ready to crash.

Estimated trading Range Today:
DJIA:  29,9526 – 29,310
S&P 500: 3,577 – 3,541
Nasdaq Comp.11,839 – 11,670
QQQ:    291 – 287

PFE: 36.70 – 36.00
MRNA: 93.3 – 88.60
……………………..
Est. trading range today (Nov.19)
FB: 273.30  –  267
AMZN: 3,131 – 3,115
AAPL: 118.80 – 115.70
NFLX: 483.60 – 478
GOOG: 1,751 – 1,721
TSLA: 517 – 471
MSFT: 212 – 209
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Wednesday November 18, 2020 (DJIA: 29,783) “ Best 6 Months Starts With Market at All-Time Highs”
     The market is tiptoeing through a minefield here. The Street is gearing up for the classic best six months of the year (Nov. – Apr.), a consistent bullish pattern going back to 1950 discovered  by the Stock Trader’s Almanac (2021 now available).
Its consistency will be challenged by the fact lift-off here is beginning as the market is hitting all-time highs.
     I am bullish on the election results, holding my breath the outgoing administration doesn’t do something stupid and dangerous before it is shown the door. I am not bullish on the transition which for the first time ever is being impeded.
The risk here is another COVID-induced slump following the sharp rebound in the economy since recession lows in February – March.
BOTTOM LINE:
   It is a stock picker’s market, but not a riskless market. The new normal is the flash crash, a vertical freefall in prices of 12% – 18%.   The last one we have seen is the February – March 35% – 21-day  plunge. It can happen.  COVID did it then, and could do it again.

Estimated trading Range Today:
DJIA:  29,921 – 29,775
S&P 500: 3,624 – 3,66
Nasdaq Comp.11,936 – 11,889
QQQ:    293– 291.9

 

PFE: 37,90 – 35.80
MRNA: 95 – 89.3
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Tuesday  November 17, 2020 (DJIA:29,950) “Market Rigged ?”

Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
………………………………………………………………………………………………………….
Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open
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Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
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Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
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There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
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Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

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Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
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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.

 

 

 

 

COVID-19 Crash #2 ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,438
S&P 500: 3,567
Nasdaq Comp.:11,801
Russell:1,769
Thursday   November 19, 2020     8:47 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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I see tiny cracks in the foundation of the tech leaders, but that may be portfolio adjustments ahead of the year-end.   Switching out of big-name growth stocks that by themselves have carried the market back up to all-time highs  from a 21-day, 35% plunge in February/March ?
But switch into what ?  What will be immune to COVID-19’s rage ?
By now, we should know that the flash crash is the new normal in corrections. And it not just COVID that is raising the possibility of a crash. It’s the refusal of the Trump administration to accept defeat and assure a transition to a new government.
We know what damage COVID can do, we don’t know what damage this administration can do in the next 26 days, and that is scary.
What is wrong with these people ?
Could an agent of a foreign adversary do more damage.  For love of country, for respect for all those who have sacrificed in defense of our democratic constitutional representative republic, why  can’t  Republican Senators  stand up to him ?  A disgrace and a danger to all America.  He lost…they lost.. but America must not be the loser.
What has happened to a nation that once valued honesty, truth, hard work, commitment to excellence in governance.  Bullies, cowards (5 drafty deferrals) and pathological liars were once disrespected.
What is is ? outright racists, closet racists, people unhappy with their limitations, career, jobs, family, lack of opportunity, fear of competition. Is it deviancy Down, people dislike for those smarter  better educated, higher skilled and a determination to dumb everything down to their level.  Or Confirmation bias, hanging on to beliefs even in face of bullet proof evidence to the contrary.
Wall Street is as clueless as his followers.   We have a third wave of COVID-19 rising in its blackness, towering like a rogue wave ready to crash.

 

 

Estimated trading Range Today:
DJIA:  29,526 – 29,310
S&P 500: 3,577 – 3,541
Nasdaq Comp.11,839 – 11,670
QQQ:    291 – 287

PFE: 36.70 – 36.00
MRNA: 93.3 – 88.60
……………………..
Est. trading range today (Nov.19)
FB: 273.30  –  267
AMZN: 3,131 – 3,115
AAPL: 118.80 – 115.70
NFLX: 483.60 – 478
GOOG: 1,751 – 1,721
TSLA: 517 – 471
MSFT: 212 – 209

 

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RECENT POSTS:
Wednesday November 18, 2020 (DJIA: 29,783) “ Best 6 Months Starts With Market at All-Time Highs”
The market is tiptoeing through a minefield here. The Street is gearing up for the classic best six months of the year (Nov. – Apr.), a consistent bullish pattern going back to 1950 discovered  by the Stock Trader’s Almanac (2021 now available).
Its consistency will be challenged by the fact lift-off here is beginning as the market is hitting all-time highs.
     I am bullish on the election results, holding my breath the outgoing administration doesn’t do something stupid and dangerous before it is shown the door. I am not bullish on the transition which for the first time ever is being impeded.
The risk here is another COVID-induced slump following the sharp rebound in the economy since recession lows in February – March.
BOTTOM LINE:
   It is a stock picker’s market, but not a riskless market. The new normal is the flash crash, a vertical freefall in prices of 12% – 18%.   The last one we have seen is the February – March 35% – 21-day  plunge. It can happen.  COVID did it then, and could do it again.

Estimated trading Range Today:
DJIA:  29,921 – 29,775
S&P 500: 3,624 – 3,66
Nasdaq Comp.11,936 – 11,889
QQQ:    293– 291.9

 

PFE: 37,90 – 35.80
MRNA: 95 – 89.3
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Tuesday  November 17, 2020 (DJIA:29,950) “Market Rigged ?”

Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
………………………………………………………………………………………………………….
Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open
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Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
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Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
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There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
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Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

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Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
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Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
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Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
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Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
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Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

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Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
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The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
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Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
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Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Best 6 Months to Own Stocks Starts at All-Time Highs

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,783
S&P 500: 3,609
Nasdaq Comp.:11,899
Russell:1,791
Wednesday   November 18, 2020     9:12 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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The market is tiptoeing through a minefield here. The Street is gearing up for the classic best six months of the year (Nov. – Apr.), a consistent bullish pattern going back to 1950 discovered  by the Stock Trader’s Almanac (2021 now available).
Its consistency will be challenged by the fact lift-off here is beginning as the market is hitting all-time highs.
     I am bullish on the election results, holding my breath the outgoing administration doesn’t do something stupid and dangerous before it is shown the door. I am not bullish on the transition which for the first time ever is being impeded.
The risk here is another COVID-induced slump following the sharp rebound in the economy since recession lows in February – March.
BOTTOM LINE:
   It is a stock picker’s market, but not a riskless market. The new normal is the flash crash, a vertical freefall in prices of 12% – 18%.   The last one we have seen is the February – March 35% – 21-day  plunge. It can happen.  COVID did it then, and could do it again.

Estimated trading Range Today:
DJIA:  29,921 – 29,775
S&P 500: 3,624 – 3,660
Nasdaq Comp.11,936 – 11,889
QQQ:    293– 291.9

 

PFE: 37.90 – 35.80
MRNA: 95 – 89.3
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RECENT POSTS:
Tuesday  November 17, 2020 (DJIA:29,783) “Market Rigged ?”

Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
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BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
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Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open
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Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
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Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
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There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
……………………………………………………………………………………..
Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

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Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
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Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
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Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
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Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

………………………………………………………………
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
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Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Rigged ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,950
S&P 500: 3,621
Nasdaq Comp.: 11,924
Russell:1,785
Tuesday   November 17, 2020      8:56 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%.
…………………………………………………..
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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Here is what  drives me up the wall, sticks in my craw, wakes me up at 4 a.m.: The stock market is hitting all-time highs when so much of our world, economy, life-style, spending habits, needs, traditions and health are in a tailspin.
That is not how it has ever worked. That breaks all the rules of common sense. That defies gravity. That goes counter to time-tested measures of value.
       WHAT IS GOING ON HERE ?
       It’s the freaking algos !
Humans don’t make investment decisions like this. Unless most of the Street is prescient enough to see wonderment in the future (unlikely), these are the kind of conditions that are accompanied by bear market bottoms not markets hitting new all-time highs.
These are the conditions that make markets more difficult to buy.

But, until enough algos are re-programmed for reality, the stock market will hang tough.
However, at some point, the future will look dire enough, or something (like COVID) will force analysts and traders to override their algos, maybe scrap them altogether.
        This will all happen at the same time, since these dudes  track the same indicators.
It starts with a sudden dearth of buying.  Stocks will be too rich to buy in light of the foreseeable future. After a swift 12% – 18% drop, the market attempts to  recover, but is hit with more selling driving it lower.
While algos know no fear, humans do. The selling mounts, news worsens, Clients start yelling at money managers. PANIC !
No one is willing to buy – everyone thinks the market will go lower.
It doesn’t.
       The smart money moves in, and it is a long time until everyone else follows.
CAN’T HAPPEN ?  It did earlier in the year when the market fell 35% in 21 days.  Without Fed and Congressional stimulus, the market would be down 45%- 50%.
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BOTTOM LINE:        RIGGED ?
Is the stock market rigged ?  In a sense it is. A better term would be corralled within roughly defined trading ranges.  No committee meets to decide which was it will go near-term, but collectively through many algorithms and group-think, the message is “BUY” and sell only to switch positions.
     That’s my observation charting stocks and in the early days, trading off the ticker tape, writing thousands of daily analyses.
The market trades so differently today, and it’s all about big money doing a host of strategies most programmed in computers.
Human traders don’t act like this. The Street wants to party on, most market vets are not drinking, and the public is hoping they aren’t about to be blind-sided by  a bear market, maybe they can make just a wee bit more money before a big correction.
Soooo, It would be wise to have a cash reserve in line with one’s tolerance for risk, i.e., if you are faced with a large near-term  expense or  no longer have an adequate income and are drawing down money from your investment account, you want  a greater reserve.
     OTHERS CAN PLAY –  JUST SIT CLOSE TO THE EXIT.
This will be a stock pickers market as  new ideas will replace old ones, namely the overworked growth stocks.  Drug stocks should get more action, as excitement mounts with announcements of new vaccines.
       INFRASTRUCTURE stocks should  get a play. Clearly, our nation needs upgrades. For some reason this area has been overlooked for decades.
The need for a host of categories is dire – roads, bridges, seaports, mass transit, waste and water management, power grid, telecom, Hazmat, computers.
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Estimated trading Range Today:
DJIA:  29,946 – 26,586
S&P 500:3,624 – 3,611
Nasdaq Comp.11,920 – 11,875
QQQ:    292 – 291

PFE: 36.50 – 34.60  – one-day reversal possible
MRNA: 104 – 96.85 – any selling should dry up at open

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RECENT POSTS:
Monday November 16, 2020 (DJIA: 29,479) “How Much RISK Can You Afford ?”
The BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
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No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
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      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
……………………………………………………………………………………..
Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

………………………………………………………………
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

How Much RISK Can You Afford ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,479
S&P 500: 3,585
Nasdaq Comp.:11,829
Russell:1,744
Monday   November 16, 2020      9:18 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 BIG NEWS today is what we all knew was going to happen – another vaccine with promising effectiveness greeted the Street  today.
Moderna (MRNA) claims a 94.5% effectiveness for its vaccine according to preliminary data. Just a week ago, Pfizer (PFE) announced a vaccine with comparable effectiveness, however, its vaccine requires a more demanding refrigeration.   More vaccines will be announced.

The Key here is, what will happen to in economy in the interim, since these vaccines will not be distributed until well into 2021 ?
I don’t have the answer and won’t guess.  So many balls are up in the air at this point.  The stock market is red hot this morning, but from levels that according to the simplistic Buffet Indicator (Stock market cap to GDP) is more overvalued than at any time in the past.
       Again, I don’t have the answer.  A year ago, I warned that the 2009 – 2020 bull market would end  in January. It didn’t until February with the help of COVID”S rampage and the federal government’s inept response to it.
With infections out of control and many Americans refusing to take precautions, it is likely to bring the economy to its knees once again.
So what about the stock market ?  Will it continue to go up while key parts of  the economy goes down ?
         Again, I don’t have the answer.  The case for bears is historic overvaluation. The case for bulls is wait until next year.
The market is tempting everyone to go all-in as it always has at all  extreme overvaluations in the past, as it did in January 2020.
It boils down to RISK. How much can one afford ?  Can the economy, businesses and individuals survive until stability returns ?
Clearly, it will be a stock pickers market, more for traders capable of moving quickly in and out of stocks.  Poor timing can crush less savvy investors.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
No post Friday November 13, 2020
Thursday November 13, 2020 (DJIA:29,397) “Any Parallel Today With 2007 ?”
The stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
……………………………………………………………………………………..
Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

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Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

………………………………………………………………
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

Any Parallel Today With 2007 ?

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,397
S&P 500: 3,592
Nasdaq Comp.:11,786
Russell:1,736
Thursday  November 12, 2020      8:46 a.m.
………………………………………………….
brooksie01@aol.com

NOTE:  No blog Friday
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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 stock market should get a boost when President Trump concedes. It appears Republicans are considering a gambit to highjack the electors of key states  in an effort overturn the election results, taking the decision to the US Supreme Court. Not going to work.
He is trailing by 5.3 million votes ( and counting) nationally and by healthy margins in states that would make a difference.
Any attempt to reverse the will of the people could take a toll on stock prices.
Expect the Street to crank out lists of “Biden stocks” to buy and Trump stocks to sell.
      Just watched “The Big Short” again last night.  It’s was all about Greed and delusion.   Who knows what leverage lurks out there today.
On August 19, 2007, prior to the 50% crash in the stock market and decimation of the housing industry, I wrote:
A
 Perfect Storm Looms

    The perfect storm in our financial markets is looming.

….It will take a heroic international effort to avert a meltdown of  huge magnitude…

….Trading in everything may have to be stopped until some sort of sanity is restored

….This can get real ugly. No one has a handle on the leverage amassed in  derivatives 

 ….No one has a true handle on how precarious the situation out there is, and that uncertainty  feeds on itself, prompting increased selling…With few buyers, stocks tank.

…Only when a cauldron of fear begins to boil, do you have a market that is reasonably safe to invest in.
………………………………………………………………………………………………………
      Actually, this is a condensed to save space here, but I knew leverage at all levels of the economy was running rampant and a crash in the stock market was imminent, and with  home prices through the roof, the binge was unsustainable.  But I wasn’t sure what would trigger the carnage.
No one at the time could explain the complex derivatives that  the banks and the Street had created to maximize commissions and facilitate the writing mortgages just as no one can explain the vast overvaluation of many stocks today.
…………………………………………………….
BOTTOM LINE:
The simplistic Buffet Index  of stock market cap to GDP has never, ever, reached this level.
This is like sprinting down a very steep hill.  You can’t stop, turn around, you just have to keep running hoping you don’t fall.
At some point the stock market will crash again, and then people will write books about what happened, why it was so obvious, how could anyone miss it.

We saw a 21-day 35% plunge in stocks in February-March earlier this year.
Unprecedented stimulus by the Fed and Congress headed off a CRASH and triggered a complete recovery in the stock market, but not in the economy which is struggling to avert a double dip.
        The Biden administration has a big Republican mess to clean up, just as President Obama was faced with in 2009 after the Bush administration.
He will not have the benefit of open-ended stimulus to prop the economy and goose stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Big-name Growth Stocks Stabilizing:
The technical  risk of an imminent decline for Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX),Tesla (TSLA), Google (GOOG), and Microsoft (MSFT) is no longer high. While fundamental developments may affect these stocks, they have stabilized for the time being, as COVID-19  is overwhelming optimism of a vaccine solution.    If their technical status deteriorates I will set new levels.
Vaccine stocks haven’t caught fire yet. New announcements of vaccine solutions will develop.

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Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,400 ; SPX:3,575 ; COMP:11,780 ;QQQ:289
Support: DJIA:28,780; S&P 500:3,515; Nasdaq:11,650; QQQ: 284
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RECENT POSTS:
Wednesday November 11, 2020 (DJIA: 29,420)  Indeed – “It Is All About Politics “

The economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113
……………………………………………………………………………………..
Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
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Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

………………………………………………………………
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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.

 

 

 

 

 

 

 

 

 

 

 

 

Indeed – It Is All About Politics !

INVESTOR’S first read.com – Daily edge before the open
DJIA: 29,420
S&P 500:3,545
Nasdaq Comp.: 11,553
Russell:1,737
Wednesday  November 11, 2020      8:46 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 economy is a mess, our democratic representative constitutional republic
diminished, many of the ten million Americans infected with COVID-19, 238,000 dead, would not be so with a federal effort to combat it, our nation divided, no thanks to this administration. Could an foreign adversary do more damage ?
      The people have spoken, but the incumbents aren’t listening – Un-American !
As American as the new Administration is, as determined as it is to clean up another Republican mess, as was done in 2009 after the Great Recession and Bear Market, it will not be easy.
       Gridlock ?  Bet on it.  Obstruction to progress ?  Bet on it.
Much as everyone would like to achieve normalcy, it won’t happen.
So what does politics have to do with our stock market today ?
       EVERYTHING !
Acceptance of defeat and the passing of the baton to a new administration
has always been smooth – it is not only the way our government works, a nation of laws, not doing so puts our nation at grave risk.
This great American  experiment in governing works, it’s brilliant and brave, but relentless attempts to undermine its system will destroy it, yielding to chaos, untethered violence, and anyone with a semblance of intelligence knows what that means for the economy, stock market and the future of our country.
Can’t happen  ?
I don’t think so, just too many people out there to say “NO !”

BOTTOM LINE:
          Hopefully, our economy can avoid another dip.  Bear in mind, the rebound we have seen since the COVID crush was all about unprecedented stimulus.
With a new administration taking over, Republicans will not want  the economy to benefit under the Biden administration.
The economy will be flying solo – BEWARE !
           I have been doing this since 1962, have been bullish and bearish with exceptional timing.  This is a phony economy, phony stock market a phony administration until January 20.
           I  believe the vote screamed – no more incompetence, projection, deviancy down,  confirmation bias, Dunning-Kruger Syndrome , we demand
solutions and demand them now.
A lot must happen before it is safe to load up.
It is a stock pickers market. The Street will sell the big-name growth stocks down to a point they are screaming buys.   Vaccine plays will come and go.  Badly COVID-crushed stocks will recoup “some” of their losses.
But a “close-your-eyes-and-buy”  market is not here.
RISK of another bear market ?   I give it a 70-30.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE: 38.68)   39.75 – 38.25
BioNTech (BNTX: 112.76)  116 – 110
Moderna (MRNA: 76.05)    78 – 75
AstraZeneca (AZNCF:113.36)  116 – 113

 

Price ‘risk’  near-term :
Facebook
(FB)    252 – 258 – 252
Amazon (AMZN: 2,900 – 2,850
Apple (AAPL)  108 – 104
Netflix (NFLX)  450 – 440
Tesla (TSLA)  340 – 330
Google (GOOG) 1,600 – 1,575
Microsoft (MSFT)  200 – 198
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,768 ; SPX: 3,586 ; COMP: 11,725 ;QQQ:288
Support: DJIA:29,400 ; S&P 500:3,545 ; Nasdaq:11,560 ; QQQ:284
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Tuesday  November 10, 2020 (DJIA:29,157)  “Dynamic Leadership Change”    I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272

 

Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.
  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

………………………………………………………………
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:              30-Day Risk
……………………………………..
FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dramatic Leadership Change

INVESTOR’S first read.com – Daily edge before the open
DJIA:29,157
S&P 500:3,550
Nasdaq Comp.: 11,713
Russell:1,705
Tuesday November 10, 2020      9:09 a.m.
………………………………………………….
NOTE: My apologies to my website readers. I was unable to publish last Tuesday – Thursday –  I was in the hospital.
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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I don’t want to get sucked into the COVID-19 vaccine timing derby, but the Pfizer (PFE) – BioNTechSE (BNTX) news release yesterday before the open suggested to me other companies were on the cusp of news releases and this dynamic duo wanted to be the first.
Put enough raw meat on the floor for these stellar research firms to chew on and fortunately they’ll waste no time grinding out results.  There will be others.
There is more than one way to attack a solution to a disease and that is where we will see a host of releases in coming months.
Estimated Price Range Today:
Pfizer (PFE; 39.20)   44 – 39
BioNTech (BNTX; 104.80) 118 – 102
Moderna (MRNA:77.74)    88 – 77
AstraZeneca (AZNCF:108.20)  116 – 109
……………………………………………………………………………………………….
That said, this group will upstage the popular COVID beneficiary stocks which I warned about yesterday (Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.
Their prices will be deflated to erase the euphoric fat gained as the only game in town, but they are not going away. Even so, portfolios will switch to vaccine stocks and COVID recovery stocks.  Price ‘risk’ is:
Facebook (FB)    252 – 258
Amazon (AMZN: 2,600 – 2,650
Apple (AAPL)  98 – 105
Netflix (NFLX)  425 – 430
Tesla (TSLA)  315 – 320
Google (GOOG) 1,558 – 1,600
Microsoft (MSFT) 195 – 200
BOTTOM LINE:
       I don’t like buying explosive opens
. I don’t like running with the herd, especially if there is a cliff anywhere nearby.
We are knee-deep in a pandemic and too early for a coming out party.
While the rebound from a severely depressed economy may be enough to prompt the NBER to announce the recession that started in February is over, our nation, the world, will be struggling from COVID’s impact for many months.
If this is a double-dipper for the economy, it will also be one for the stock market.
It may well be anyhow.   The transition in Washington will be tenuous with a slow return to normalcy.
In its simplistic self, the Buffet Index of overvaluation for the stock market has never been higher. A ratio of stock market capitalization to GDP at around 181% is trumpeting  – take a hike.

Market Averages: Estimated Price Range for today only.
Resistance:
  DJIA: 29,580; SPX: 3,615; COMP:11,500 ;QQQ:282
Support: DJIA:28,860; S&P 500:3,540; Nasdaq:11,236 ; QQQ:272
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Monday November 10, 2020 (DJIA: 28,323) “SELL the Open”
     Pfizer (PFE) and BioNTechSE (BNTX) just announced   a vaccine candidate that has demonstrated evidence of efficacy against COVID-19 indicating a vaccine efficacy rate above 90%.  The company expects to produce  up to  50 million doses in 2020 and up to 1.3 billion doses in 2021. Both are working to prepare safety and manufacturing data to submit to the FDA to demonstrate safety and quality.
Obviously, this is great news.  I do not understand the haste in its release before final tests are complete unless other companies are on the verge of announcing a vaccine.
BOTTOM LINE:

As noted Friday, The Buffet Index of stock market valuation has never demonstrated a greater overvaluation of stocks.  Last week, I attributed last week’s rally to the Street’s relief that a lopsided Democratic victory wouldn’t result in  a major change, i.e. gridlock was preferred.

Now I suspect, It was known that this release was coming.
      I am bullish on the ability of the drug industry to rise to the occasion and especially bullish on the choice voters made last week.
      Euphoria will drive stocks higher at the open. The NBER may shortly announce the recession is over based on the sharp rebound from Q1 and Q2 depressed lows, but recent data suggests otherwise..
But a lot of damage has been done on top of an economy that  in its 11th year was ready for recession without COVID.
Short covering will add to panic buying at the open. I view this as an opportunity to raise enough cash to protect one’s portfolio in the event this is

a fake out.
         The beneficiaries of  COVID’s shutdown are vulnerable,  Apple (AAPL), Microsoft (MSFT), Facebook (FB), Netflix (NFLX), Google (GOOG), Amazon (AMZN) to mention a few.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday November 6, 2020 (DJIA: 28,390) “Buffet Overvaluation Index Never Higher”

     The stock market soared Wednesday and Thursday when it became clear there was not going to be a lopsided Democratic victory. The Street  was settling for political  gridlock for at least two years.
That aside, nothing has changed for the better either in the economy or with COVID.
 BOTTOM LINE:
      This rally is a gift for investors to sell down to a level that discounts their tolerance for loss.
Simply stated, the Buffet Indicator, a ratio of stock market’s total market value to the  GDP has soared to new all-time high of 181%, a level far exceeding any ever achieved, greater than  the year 2000’s  159%, greater than the high of 118 reached before the 2007-2009 Great Recession.
Our nation’s economy is struggling to climb out of a recession. It may technically do that briefly  as a result of its sharp rebound from severely depressed Q2 and Q3, but I suspect it will once again plunge as economic dominoes continue to tumble.
In its simplicity, this indicator is screaming-  Stop Buying – Sell.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday November 3, 2020 (DJIA: 26,501) Party Over, Rally a Trap, Worst Yet to Come”
A Biden win means a lot of painful damage control.
A Trump win means more damage.
Either way, I see a worsening of the recession and another bear market.
At these lofty levels, the stock market does not even closely  reflect the damage done over the last four years.
The stock market is vastly overvalued based on time-tested measures of value and buoyed by government stimulus and a handful of gigantic corporations whose market caps have distorted the market averages and given a phony reading  of values.
It is overvalued, because Wall Street  likes it that way and wants the party to continue indefinitely.  Not Going to happen. Fed bubble #1 burst on February 12, Fed Bubble #2 burst on October 12.
       The Fed has no reason to prop the market after tomorrow. Congress has no incentive to pass any more stimulus packages.
Covid-19 is running wild in its third major surge of infections threatening to crush an economy already on the ropes.
       If the market were down 35% from here, I would be bullish as Hell. But that’s the disconnect, it is 10% down from all-time highs and has not discounted any negatives.
BOTTOM LINE:
Look for brief rally starting today after last week’s drubbing. New buying risky, especially chasing stocks at the open. It looks like the tech stock craze of invulnerability has been shattered, rallies from here  give investors a chance to lighten up.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Market Averages:  Estimated for today only.
 Resistance:  DJIA: 27,001; SPX:3,329 ; COMP: 11,145;QQQ:274.5
Support: DJIA:26,400 ; S&P 500:3,260  ; Nasdaq:10,500 ; QQQ:271
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Today’s est. range:
……………………………………..
FB:
     273 -263
AMZN: 3,107 – 3,045
AAPL: 111.8 – 109
NFLX: 486 – 475
GOOG: 1,666 – 1,625
TSLA:   411 – 390
MSFT: 2.7.6 – 202
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday October 30, 2020 (DJIA:26,501)  “Flash Crash Risk Rises – Nov. Buy – Lower Prices”
A chaotic month, a flash crash, but a great buying opportunity at much lower prices.
According to the Stock Trader’s Almanac, November ranks first in months to buy  for good results over the next six months.
      Yesterday’s rebound was more about a technical reaction to the plunge over the last four days than to the stellar Q3  GDP report which has been expected for weeks.  While compared with a severely depressed Q2, an annualized gain of 33.1%, it was buoyed by unprecedented government stimulus, which cannot be expected in future quarters.
Uncertainty LOOMS, the VIX is surging to reflect angst ,and small wonder,
the next 10 weeks stand to be racked with chaos, inept governance, uncertainty about WHO IS IN CHARGE.
If Trump loses he will be vindictive and out of control,  and nothing can be done about it. If he wins, the nation will be thrown into a depression, stock market crash, civil unrest and the biggest challenge to the survival of our democratic representative constitutional republic since the CIVIL WAR.
BOTTOM LINE:
With COVID on a tear, odds strongly indicate that  the economy will tank again triggering another flash crash, this one featuring a series of plunges, rallies and plunges.   Initially, I see the market averages hitting the levels below before a short-lived rally.
DJIA: 25,000
S&P 500: 3,050
Nasdaq Comp.:10,150.     

Yesterday’s  “Trader’s Hit-n-Run Buy in early trading should have served readers well, but take the profit and wait for another opportunity..   Expect a test of those lows today.

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Market Averages:  Estimated for today only.
 Resistance:  DJIA: 26,450; SPX:3,285 ; COMP:11,150 ;QQQ:275
Support: DJIA:25,790 ; S&P 500:3,200 ; Nasdaq:10,290 ; QQQ:269
Note: News of a failure to reach a bill would hammer stocks.
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The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
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Today’s est. range:              30-Day Risk
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FB:  284 – 268

AMZN: 3,243 – 3,095
AAPL: 117 – 110
NFLX: 521 – 490
GOOG: 1,672 – 1,630
TSLA: 414 – 398
MSFT: 207 – 199
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Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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Thursday October 29, 2020 (DJIA: 26,520) Trader’s Hit-n-Run Buy – More Downside”
     A 22-month period of stock market hype is coming to an end. It featured hype by the Fed, the Administration and the Street to prop the stock market and economy up in time for this presidential election.
Over this period, I detailed this effort, which included Fed Bubble #1 (Jan. 2019- Feb 2020, and Fed Bubble  #2 (Mar.2020 to October 2020).   Both bubbles were burst with results injurious to investors.  The Administration and Street  are understandable, the Fed  Not !
I would not be surprised if these three amigos don’t try one more time to con investors into buying into an overvalued market, especially the Fed.
Very little of the stimulus would have happened to this degree if it weren’t a presidential election year.
The sharp rebound in Q3 GDP (33.1% ann. rate)  reported this morning is deceiving in that it reflects an unprecedented government stimulus, as well as a normal “bounce” in an economy that  was  severely depressed by COVID. Axios reports the economy must still regain 40% of the $1.85 trillion lost to get back to pre-COVID GDP levels.
Q3’s GDP is a quarter-to-quarter calculation at an annual rate comparing Q3 to a very depressed Q2.
BOTTOM LINE:
     If the Street adjusts  its buy-only algos, to account for risk, we are in a bear market, since most algos will be adjusted at the same time by most institutions.
Why not adjust them ?  A third spike in COVID threatens to trigger a second plunge in the economy, this time one without stimulus. Then too, there is no urgency by the three amigos to hype the economy and stock market.
Expect a number of rallies as the market seeks to find a level that discounts  known and perceived economic, political and market valuation levels.
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With the DJIA at 28,195, I headlined “Double Top Sets Up Big Crunch,”
referring to two double tops in the DJIA and S&P 500, Sept. 2 and Oct. 2 and in a broader sense, Feb. 12 and Sept. 3.  Yesterday’s decline sets that technical phenom.
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Market Averages:  Estimated for today.
 Resistance:  DJIA:26,857; SPX:3,315 ; COMP: 11.110;QQQ:273
Support: DJIA: 25,783; S&P 500:3,165; Nasdaq:10,695 ; QQQ:264
Note: News of a failure to reach a bill would hammer stocks.
………………………………………………………………………………….
The news sensitivity of this market complicates picking support and resistance levels –  Changes in broker ratings and earnings reports/projections add to the difficulty. Technical-only estimates of short-term price ranges  for today are listed below.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Note: Uncertainty of the election results and especially a COVID-ravaged economy going forward raise the risk of more days like yesterday.  Traders can scalp a quick hit ‘n run after another downer. Today’s est. range:
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FB:
271 – 256
AMZN: 3,191 – 3,007
AAPL: 111.8 – 104.6
NFLX: 4887 – 471
GOOG: 1,526 – 1,471
TSLA: 407 – 371
MSFT: 204 – 196
……………………………………………………………..
Again, These  are “technical chart reads.” I am not checking  earnings, news, buy/sell recommendations. These levels change frequently.
Some markets are easier to read than others. I like a rough and tumble market, that’s where the opportunities are albeit risks.  That’s where “wild bid” opportunities crop up, where a bid  set well below the market for a stock can be nailed for a turn that occurs in just a fleeting second.  These are usually not at conventional support levels, but a bit below those levels. If the stock doesn’t trip it, a trader looks for the next one.  The key is cut losses short. Sometimes partial positions work better than an “all-in” strategy, especially in a news whipsaw market where the market gets jerked around by conflicting news releases.
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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.