A Drink After Work, or a Party ?

Investor’s first read – Daily edge before the open
DJIA: 18,923
S&P 500: 2,180
Nasdaq Com.:5,275
Russell 2000:1,302
Wednesday, November 16, 2016 9:11 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
No one knows for sure what will happen, not even the Shadow.
This is a slugfest between uncertainty and speculative fever, driven by investors’ pondering the “what if” – taxes are reduced, Congress approves megabucks for military and infrastructure spend, regs are lifted opening the door for stuff to happen at warp speed !!
What are the odds this can happen ? There is an element out there with a lot of money to invest that doesn’t care about the odds whether all this can happen, it is willing to roll the dice. Hot money !
REALISTICALLY
It will take years for a huge increase in spending, corporate tax cuts, and reduced regulations to become reality at the bottom lines of corporations, and that assumes Congress goes along with Trumps plans.
Republicans control the Senate by a narrow margin of 52-48. Trump won’t have an easy go of it, he will encounter deficit hawks in his own party and Democrats who are not going to rubber stamp everything he proposes.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 2.9% well ahead of negative projections several months ago. Q4 is projected at a gain of 3.6%, the year projected to come in at 0.2%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 16.6x, which compares with a 10-year average P/E of 14.3x.
TECHNICAL
The surge in the small company Russell 2000 may be a flash in the pan, or the beginning of a speculative binge. From the lows Wednesday, Nov. 9 to yesterday’s close, the market averages rose: DJIA +3.4%, S&P 500: +1.8%, Nasdaq Comp. +1.4%, and the small company Russell 2000 +10.0%.
While the S&P 500 is historically overvalued, it can become more so, if the Street looks out to what it perceives as greater government spending and increasing corporate profits.
BUT, few meaningful up legs in the stock market occur in a straight line.
The seriousness of this up move will be signaled by whether buyers pounce on stocks immediately when they try to correct.
A word of caution. There is new found euphoria on the Street, hopes of great things happening, and they are willing to bet it will happen.
If the spending plans, tax cuts, lifting of regulations run into obstruction by Congress, the market will plunge to more reasonable levels, perhaps develop into a bear market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:18,847; S&P 500:2,173; Nasdaq Comp.:5,261
RESISTANCE “today”:DJIA:19,003;S&P 500:2,193;Nasdaq Comp.:5,298.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 14.6% since July. That’s nearly 6 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
The Employment Situation report came in Friday, 161,000 jobs were added in October, the unemployment rate was 4.9%.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of November 11, 2016, a reasonable risk is 18,401 a more extreme risk is 18,354 Near-term upside potential is 19,017
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – trending to bullish
 OPPORTUNITY: RISK: Opportunity !
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Uncertainty of election to be resolved in two days, earnings slide may be over.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Stock Trader’s Almanac
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

Investor’s first read – Daily edge before the open
DJIA: 18,923
S&P 500: 2,180
Nasdaq Com.:5,275
Russell 2000:1,302
Wednesday, November 16, 2016 9:11 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
No one knows for sure what will happen, not even the Shadow.
This is a slugfest between uncertainty and speculative fever, driven by investors’ pondering the “what if” – taxes are reduced, Congress approves megabucks for military and infrastructure spend, regs are lifted opening the door for stuff to happen at warp speed !!
What are the odds this can happen ? There is an element out there with a lot of money to invest that doesn’t care about the odds whether all this can happen, it is willing to roll the dice. Hot money !
REALISTICALLY
It will take years for a huge increase in spending, corporate tax cuts, and reduced regulations to become reality at the bottom lines of corporations, and that assumes Congress goes along with Trumps plans.
Republicans control the Senate by a narrow margin of 52-48. Trump won’t have an easy go of it, he will encounter deficit hawks in his own party and Democrats who are not going to rubber stamp everything he proposes.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 2.9% well ahead of negative projections several months ago. Q4 is projected at a gain of 3.6%, the year projected to come in at 0.2%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 16.6x, which compares with a 10-year average P/E of 14.3x.
TECHNICAL
The surge in the small company Russell 2000 may be a flash in the pan, or the beginning of a speculative binge. From the lows Wednesday, Nov. 9 to yesterday’s close, the market averages rose: DJIA +3.4%, S&P 500: +1.8%, Nasdaq Comp. +1.4%, and the small company Russell 2000 +10.0%.
While the S&P 500 is historically overvalued, it can become more so, if the Street looks out to what it perceives as greater government spending and increasing corporate profits.
BUT, few meaningful up legs in the stock market occur in a straight line.
The seriousness of this up move will be signaled by whether buyers pounce on stocks immediately when they try to correct.
A word of caution. There is new found euphoria on the Street, hopes of great things happening, and they are willing to bet it will happen.
If the spending plans, tax cuts, lifting of regulations run into obstruction by Congress, the market will plunge to more reasonable levels, perhaps develop into a bear market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:18,847; S&P 500:2,173; Nasdaq Comp.:5,261
RESISTANCE “today”:DJIA:19,003;S&P 500:2,193;Nasdaq Comp.:5,298.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 14.6% since July. That’s nearly 6 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
The Employment Situation report came in Friday, 161,000 jobs were added in October, the unemployment rate was 4.9%.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of November 11, 2016, a reasonable risk is 18,401 a more extreme risk is 18,354 Near-term upside potential is 19,017
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – trending to bullish
 OPPORTUNITY: RISK: Opportunity !
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Uncertainty of election to be resolved in two days, earnings slide may be over.
////////////////////////////////////////////////////////////////////////////////////////////////
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Stock Trader’s Almanac
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer. Neither Game-On Analysis, LLC, nor George Brooks is registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

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