Any Surprises After Election Day ?

Investor’s first read – Daily edge before the open
DJIA:18,259
S&P 500: 2,131
Nasdaq Comp.:5,166
Russell 2000:1192
Tuesday, November 8, 2016 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
If there was ever a doubt who the Street would rather see in the White House next year, it was answered yesterday. The market surged at the open following Sunday’s announcement by FBI director James Comey that it had reviewed the new Clinton related e-mails in question and it would not be bringing charges.
That is no guarantee that we will know who wins tonight or Wednesday, but a Clinton slide has been reversed giving her a good chance of winning.
Based on the sentiments expressed by the Street yesterday, a Trump win would crush the stock market Wednesday even though there are a lot of investors and investment professionals who are voting for Trump.
TECHNICAL
The surprise FBI announcement Sunday triggered panicky buying by investors who were on the sidelines and short sellers covering positions.
The news reversed a downtrend in stocks that appeared on the threshold of accelerating.
Now it’s wait and see, first who wins, then what happens after the vote is tallied.
There is concern that Trump would not concede, thus creating a crisis of sorts. As I understand it, the electoral college vote rules.
A Clinton win would bump the market higher at the open Wednesday, assuming
we have closure. A Trump win would initially hammer the market down to the Brexit
levels (DJIA: 17,063; S&P 500: 1,991; Nasdaq Comp.:4,579).
The Street has been so much concerned with who wins, that what happens
afterward has gotten little ink. A Trump win spells uncertainty for a long time, since we
know little about his policy focus and whether he could get it through Congress.
If Clinton wins, she may be faced with Congressional obstruction to Supreme Court
appointments and her attempts to implement policy – more gridlock.
Soooooo, the Street may re-direct its focus where if has been – to Fed policy
which is trending to higher rates, not just in December, but multiple rate increases in
2017, all assuming the economy picks up.
For months, Factset has projected a decline in Q3 S&P 500 earnings on around
2.2%. It appears Q3 will be a gain, not a loss, and a nice one of 2.7%.
That’s a nice swing from down to up. If it indicates Q4 will be positive and 2017 will
come in at plus 13% or better, it will erase much of the overvaluation in the S&P 500
that exists now. That is not a given. A strong U.S. dollar is cutting into multinational
earnings as are increases in wages.
For the most part, the market relies on the two “Cs” – comfort and confidence.
Those two have been very elusive in recent years, yet the bull presses on.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:18,127; S&P 500:2,116 ; Nasdaq Comp.:5,031
RESISTANCE “today”:DJIA:18,296;S&P 500:2,136; Nasdaq Comp.:5,178.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 9% in 4 months
On Wednesday, the Fed indicated that the case for a bump in interest rates has increased, but opted out of doing it this month. It looks like it will happen in December.
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 9.1% since July. That’s four times the yield an investor expected over 12 months. 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 October 21, 2016, a reasonable risk is 18,026 a more extreme risk is 17,986 Near-term upside potential is 18,481.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: Neutral – trending to bullish
 OInvestor’s first read – Daily edge before the open
DJIA:18,259
S&P 500: 2,131
Nasdaq Comp.:5,166
Russell 2000:1192
Tuesday, November 8, 2016 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
If there was ever a doubt who the Street would rather see in the White House next year, it was answered yesterday. The market surged at the open following Sunday’s announcement by FBI director James Comey that it had reviewed the new Clinton related e-mails in question and it would not be bringing charges.
That is no guarantee that we will know who wins tonight or Wednesday, but a Clinton slide has been reversed giving her a good chance of winning.
Based on the sentiments expressed by the Street yesterday, a Trump win would crush the stock market Wednesday even though there are a lot of investors and investment professionals who are voting for Trump.
TECHNICAL
The surprise FBI announcement Sunday triggered panicky buying by investors who were on the sidelines and short sellers covering positions.
The news reversed a downtrend in stocks that appeared on the threshold of accelerating.
Now it’s wait and see, first who wins, then what happens after the vote is tallied.
There is concern that Trump would not concede, thus creating a crisis of sorts. As I understand it, the electoral college vote rules.
A Clinton win would bump the market higher at the open Wednesday, assuming
we have closure. A Trump win would initially hammer the market down to the Brexit
levels (DJIA: 17,063; S&P 500: 1,991; Nasdaq Comp.:4,579).
The Street has been so much concerned with who wins, that what happens
afterward has gotten little ink. A Trump win spells uncertainty for a long time, since we
know little about his policy focus and whether he could get it through Congress.
If Clinton wins, she may be faced with Congressional obstruction to Supreme Court
appointments and her attempts to implement policy – more gridlock.
Soooooo, the Street may re-direct its focus where if has been – to Fed policy
which is trending to higher rates, not just in December, but multiple rate increases in
2017, all assuming the economy picks up.
For months, Factset has projected a decline in Q3 S&P 500 earnings on around
2.2%. It appears Q3 will be a gain, not a loss, and a nice one of 2.7%.
That’s a nice swing from down to up. If it indicates Q4 will be positive and 2017 will
come in at plus 13% or better, it will erase much of the overvaluation in the S&P 500
that exists now. That is not a given. A strong U.S. dollar is cutting into multinational
earnings as are increases in wages.
For the most part, the market relies on the two “Cs” – comfort and confidence.
Those two have been very elusive in recent years, yet the bull presses on.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:18,127; S&P 500:2,116 ; Nasdaq Comp.:5,031
RESISTANCE “today”:DJIA:18,296;S&P 500:2,136; Nasdaq Comp.:5,178.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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 9% in 4 months
On Wednesday, the Fed indicated that the case for a bump in interest rates has increased, but opted out of doing it this month. It looks like it will happen in December.
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 9.1% since July. That’s four times the yield an investor expected over 12 months. 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 October 21, 2016, a reasonable risk is 18,026 a more extreme risk is 17,986 Near-term upside potential is 18,481.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 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

PPORTUNITY: 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

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