Street Not Afraid Of Biden/Harris

INVESTOR’S first read.com – Daily edge before the open
DJIA:28,303
S&P 500: 3,419
Nasdaq Comp.:11,364
Russell: 1,612
Thursday October 8, 2020    9:08 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 News whipsaw is back !   In short – buying or shorting the news in this market is treacherous, don’t try it.
Insanity – at the top ! after four years of this, I should not be surprised that in the Street is beginning to see a Biden victory as bullish.
Last night’s Harris/Pence debate iced the cake.

MarketWatch’s Mark DeCambre’s subhead yesterday was, “Is the Market Pricing in  a Democrat Sweep ?”
      Yes, it  would likely mean higher taxes for corporations they can handle it, their 40%  tax cut by   the “Tax Cut and Jobs Act” was over the top, especially since individuals only got in the neighborhood of a 1% cut, higher for big earners.
What a Democratic  clean sweep would mean is a return to predictability, the rule of law and  an end to the divisiveness coming down from the top. That alone is bullish.
Besides, the Street and corporate America have already  got what they wanted, a nice extension of Obama’s economic recovery and  bull market.
So a flip flop would make sense, it  just comes as a surprise to me for a Street that has been in the Trump camp for four years.

Like his Democrat predecessor,  Biden would inherit a mess. The rebuild of confidence, international ties, and economy would take time. The hard clean up work would take time, unpopular decisions would have to be made on trade, foreign relations, taxes and paying for infrastructure programs after so much has been spent on propping a failing economy up with stimulus  and  bailouts.
BOTTOM LINE:

Money can be made in late stage bull markets – the fever is up, appetites have been whetted, people are making money and they don’t want the party to end.
Regardless of who wins, a correction/bear market is imminent. They happen, and can come out of nowhere.
It appears the Street is betting on an economy that is totally impervious to a rebound in COVID on top of the onset of the flu season, however, that is drawing to an inside straight.
      A bear market will start when  the BIG money breaks ranks, stops buying and sells in size.
      Up to now, buyers on the dip have been rewarded and will continue to do so  until the dip before the next bear market.
But it really doesn’t seem possible, the market Has rebounded from dozens of corrections, some pretty severe.
A bear market just doesn’t seem possible, does it ?    Well, none of those in the past have either.
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Resistance:  DJIA: 28,487; SPX: 3,438; COMP: 11,438; QQQ: 282
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Follow up projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/7
Facebook (FB: 263)                       251                      244       Close:     258
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,225
Apple (AAPL: 112)                         103                       103      Close:      115
Netflix: (NFLX: 483)                       437                      466       Close:      535
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,460
Tesla (TSLA: 441)                           377                       407      Close:      425
Microsoft (MSFT: 215)                 191                       196       Close:     209
Key near-term resistance: The news sensitivity of this market complicates picking support and resistance levels – down one day on news, up the next.  RESISTANCE STARTS: FB:259*; AMZN:3,215; AAPL: 116*; NFLX: 540*; GOOG: 1,470*; TSLA: 429; MSFT: 209*        * Update

 

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RECENT POSTS:
Wednesday October 7, 2020  (DJIA: 27,772) “Two More Months of This ! Raise Cash”
A human wrecking ball !
     Trump must go before he wrecks the whole store.  Too much is at stake. The do-nothing Senate must show up. The U.S. House has passed 395 bills that Republican Senate Majority Leader, Mitch McConnell, refuses to even bring to the floor.
This is unparalleled  dysfunction. This is what brings nations down.
Unthinkable as it may be in the Hamptons, this political blundering is what brings stock markets down.
This senseless mayhem at the top levels of our government cuts to the core of the foundation of  stability across the board.  Undermine the core and it all goes south, including the stock market.
As so many people and businesses suffer, the stock market is the last man standing.  As soon  a few big hitters stop buying, it all crumbles.
In a speech to the NABE yesterday, Fed Chair Powell urged Congress to pass another stimulus bill, saying the economic recovery faces a “longer than expected slog back to full recovery.
Trump’s response was to tweet to his team to stop negotiating with congressional Democrats on a stimulus until after the election, when he planned a “major stimulus bill” ……if he wins the election.
       The stock market plunged in response.
The message is obvious, vote for me, and you’ll get your stimulus.               Is this happening in our country ?    Is this the SELL signal that has threatened to take the market down 35%-45%, because we have a deranged president who will be in office for three more months, God forbid another four years ?
It shouldn’t  matter what one’s politics are.  This is just another indication  that the strongest person in the whole world is delusional.
People are hurting, businesses on the edge, and their president can only tweet nonsense.
BOTTOM LINE:
      It means, as a nation, the economy and Stock market is  on the edge. It means at any time, we could see BIG money STOP BUYING and create a vacuum that no one is willing to fill – 2020 Flash Crash #2.
Algos are in there buying this morning, as if nothing is happening to our country.
Resistance starts:
DJIA: 28,125
S&P 500:3,398
Nasdaq Comp.: 11,265
QQQ: 279
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Tuesday  October 7, 2020 (DJIA:28,148)  “Street Now Favors Biden ?”

This has become such a news sensitive market jerking one way, than another like a drunk line dancer.
      Are shorts being chased once again, if so, is it because the Street is worried that Trump will  lose re-election, or is it worried he will win ?
      After four years, the Street may opt for sanity, an end to the rape and pillage of our democratic republic and the daily effort to divide us as Americans.
       Never has the value of  the “rule of law”  been more evident, the importance of truthfulness vs. daily lying and optics.
WHAT DOES THIS MEAN FOR THE STOCK MARKET ?
So far – nothing.  There is something about risk the Street doesn’t get, spoiled by 11 years of economic expansion and bull market interrupted briefly this year for a COVOID moment.
Rigid buy-only algos have  driven stock prices far beyond realistic levels, levels not seen in a hundred years.
What will trigger a reality check ?   How about a touch of acrophobia, or FOMO – not fear of missing out on a buying opportunity, but fear of missing a selling opportunity before the big  flush.”
BOTTOM LINE:
The bear market that started in February was over in a couple months, juiced by unprecedented Fed and Congressional stimulus, which triggered a sharp rebound in the economy possibly enough to cause the  NBER to announce the recession is over in a month or two.
So much damage has been done by COVID and the necessary response to COVID, and now we are seeing a rebound in COVID infections  as Flu season begins – a double-dip recession ?
No way !     Really ?   How about recessions in Jan. 1980 – July 1980 and July 1981 – Nov. 1982.
At some point, the charade will end – no more hype by the Fed, the Administration and Street. That’s when the stock market will thumb its nose at the algos and head south for the winter.
Fed Chair Jerome Powell will present his position on the economy and trade  today.  He is mainly responsible for stock market bubble #1 Jan.2019 – Feb. 2020, and bubble #2 – March 2020 to the present.
Appointed to his prestigious office by President Trump, it can be assumed he will  attempt to inflate the bubble further.

Monday October 6, 20920 (DJIA: 27,682) “Will Covid Surge Impact a Struggling Economy”
What to do: Decide your tolerance for risk and raise the amount of cash necessary to cover it….and don’t worry about what other investors are doing, don’t listen to the boasts about their scores.– stay with your plan. The new normal is the flash crash, a swift plunge of 10%  12%.  So far, most have recovered within a reasonable amount of time – don’t count on that happening next time.

Why didn’t the market take a bigger hit Friday ?  Probably because so much of the trading is computerized (algorithms) and what happened Friday isn’t plugged into the algos’ programming – the difference between a computer and the human brain.
I expect a stimulus bill of $2.0 trillion before Nov. 3 (of course).  I think it is built into the market’s prices, but in truth, passage would confirm my belief that another wave of  unemployment, closings, bankruptcies, and another slump in business looms.
Possible, is an announcement by the NBER that the recession that started in February is over, owing to the sharp rebound in the economy from severely depressed levels earlier in the year.
Q3 GDP will be announced at  the end of October, and show a  rebound of more than 25% at an annual rate, but that is from depressed levels.  Close to 30 million Americans are on the unemployment rolls. While 857,000 jobs were added in September, that is down from 1.4 million added in August and 1.7 million in July.  Reportedly, more layoffs are planned for retail, airlines, financial services, and oil.
Consumer Confidence (current and future expectations) is rebounding sharply from severely depressed levels earlier in the year, but still below peaks hit prior to COVID-19.
But COVID is surging again in New York, California, Texas, Wisconsin, Florida and the upper mid-west, especially in states that are re-opened and students are returning to school..
Just about the time it appeared safe to step out to pre-COVID lifestyles, risk raises its ugly head.
BOTTOM LINE:
        Today’s rebound is suspect since the presidency is in question, and COVID is on the rampage again.  President Trump’s joyride-photo-op  yesterday raises questions about his stability.  Congress has not been kept in the loop on his condition, a serious risk to national security.  BIZZARE !
This kind of irresponsible, immature behavior has never been experienced with past presidents.   But like I noted above, the Street’s algos are not programmed for the dire risks such behavior poses. Maybe we won’t pay a price, however based on time-tested measures of value, stocks are historically overvalued.
        But the Street isn’t phased by outlandish domestic and international events.  That’s arrogance, and you know what that precedes.
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Near-term Resistance/support levels for the market indexes.
Resistance begins at: DJIA:27,900; S&P 500: 3,373; Nasdaq Comp.: 11,176
Support is: DJIA: 27,720; S&P 500: 3,355; Nasdaq Comp.: 11,110
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Follow up to last week’s projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/2
Facebook (FB: 263)                       251                      244       Close:     265
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,199
Apple (AAPL: 112)                         103                       103      Close:      116
Netflix: (NFLX: 483)                       437                      466       Close:      520
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,486
Tesla (TSLA: 441)                           377                       407      Close:     425
Microsoft (MSFT: 215)                 191                       196       Close:    210
Key near-term resistance:
FB:262*; AMZN:3,140; AAPL: 114*; NFLX: 507*; GOOG: 1,466*; TSLA: 420; MSFT: 207*        * Update

 

Friday October 2, 2020 (DJIA: 27,816) “Trump Has COVID – Wall Street Selling”
President Trump and First Lady Melania Trump  have tested positive for COVID-19.  Futures are down sharply.  Ironic !
This is a major uncertainty, not like the assassination of President John Kennedy, but an uncertainty of a much different kind.  Coming 31 days before the election, the question rises, does he resign, keep campaigning, or be hospitalized with the outcome uncertain.
WHAT TO EXPECT:
The assassination of President John Kennedy was final, Trump’s infection with COVID will be a lingering uncertainty with Vice President Pence taking charge temporarily or permanently depending.
With Kennedy, the market found a level that discounted the event. However, expect a probing volatility going forward this time with rallies and sell-offs in response to news of Trump’s condition. I was a broker in a small office in Pennsylvania  when Kennedy was assassinated, taking calls from panicking investors, many not even my own.  “Sell Everything, I heard”
I expect a sell off at the open, a rally around midday as the Street thinks this won’t be so bad, then a plunge into the close as we head into the weekend.
Generally, I see the DJIA  dropping to 27,140 by 10:00 a.m., rallying to 27,420 at mid-day then a sell-off to 26,700 – 26,800 at the close.
Near-term RISK is:  DJIA: 25,000; S&P 500: 3,000; Nasdaq Comp.: 9,750.
If he wasn’t so untruthful during his tenure, there wouldn’t be any question that this is a ploy to  curry favor and votes.   Callous  of me ?
        No one has been more callous over the last 5 years than Trump, and especially this year as tens of thousands of AMERICANS have died unnecessarily due to his denial that COVID-19 needed immediate attention early in 2020.
The Street is hoping for another stimulus, and I think it will get one, probably running around $2.0 trillion. Democrats were pushing for a much higher one ($3.5 T), but will settle for less. The Republicans need to appease what few real conservatives are left and clearly cannot afford not to go along with one.
What does all this say ?
IMHO, it says our economy will run out of steam without one.
While the economy had rebounded sharply in recent months, it did so from a severely depressed level and with the help of unprecedented stimulus.
Would all this stimulus be taking place if this wasn’t a presidential election year  ?
BOTTOM LINE:
The futures point to a big sell-off at the open.  That’s what  a sudden uncertainty does to the stock market, and especially one as overvalued as this one. Anyone who has heeded my warnings to raise cash will:
1) not get hurt as much as if they were fully invested.
2) will be in a position to buy in at lower prices.
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Thursday October 1, 2020 (DJIA: 27,781) “Stimulus Bill $2.0Trillion Likely – Sell the News”
The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
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Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Two More Months of This ! Raise Cash !

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,772
S&P 500: 3,360
Nasdaq Comp.:11,154
Russell: 1,577
Wednesday October 7, 2020    8:55 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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A human wrecking ball !
     Trump must go before he wrecks the whole store.  Too much is at stake. The do-nothing Senate must show up. The U.S. House has passed 395 bills that Republican Senate Majority Leader, Mitch McConnell, refuses to even bring to the floor.
This is unparalleled  dysfunction. This is what brings nations down.
Unthinkable as it may be in the Hamptons, this political blundering is what brings stock markets down.
This senseless mayhem at the top levels of our government cuts to the core of the foundation of  stability across the board.  Undermine the core and it all goes south, including the stock market.
As so many people and businesses suffer, the stock market is the last man standing.  As soon  a few big hitters stop buying, it all crumbles.
In a speech to the NABE yesterday, Fed Chair Powell urged Congress to pass another stimulus bill, saying the economic recovery faces a “longer than expected slog back to full recovery.
Trump’s response was to tweet to his team to stop negotiating with congressional Democrats on a stimulus until after the election, when he planned a “major stimulus bill” ……if he wins the election.
       The stock market plunged in response.
The message is obvious, vote for me, and you’ll get your stimulus.               Is this happening in our country ?    Is this the SELL signal that has threatened to take the market down 35%-45%, because we have a deranged president who will be in office for three more months, God forbid another four years ?
It shouldn’t  matter what one’s politics are.  This is just another indication  that the strongest person in the whole world is delusional.
People are hurting, businesses on the edge, and their president can only tweet nonsense.
BOTTOM LINE:
      It means, as a nation, the economy and Stock market is  on the edge. It means at any time, we could see BIG money STOP BUYING and create a vacuum that no one is willing to fill – 2020 Flash Crash #2.
Algos are in there buying this morning, as if nothing is happening to our country.
Resistance starts:
DJIA: 28,125
S&P 500:3,398
Nasdaq Comp.: 11,265
QQQ: 279
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RECENT POSTS:
Tuesday  October 7, 2020 (DJIA:28,148)  “Street Now Favors Biden ?”

This has become such a news sensitive market jerking one way, than another like a drunk line dancer.
      Are shorts being chased once again, if so, is it because the Street is worried that Trump will  lose re-election, or is it worried he will win ?
      After four years, the Street may opt for sanity, an end to the rape and pillage of our democratic republic and the daily effort to divide us as Americans.
       Never has the value of  the “rule of law”  been more evident, the importance of truthfulness vs. daily lying and optics.
WHAT DOES THIS MEAN FOR THE STOCK MARKET ?
So far – nothing.  There is something about risk the Street doesn’t get, spoiled by 11 years of economic expansion and bull market interrupted briefly this year for a COVOID moment.
Rigid buy-only algos have  driven stock prices far beyond realistic levels, levels not seen in a hundred years.
What will trigger a reality check ?   How about a touch of acrophobia, or FOMO – not fear of missing out on a buying opportunity, but fear of missing a selling opportunity before the big  flush.”
BOTTOM LINE:
The bear market that started in February was over in a couple months, juiced by unprecedented Fed and Congressional stimulus, which triggered a sharp rebound in the economy possibly enough to cause the  NBER to announce the recession is over in a month or two.
So much damage has been done by COVID and the necessary response to COVID, and now we are seeing a rebound in COVID infections  as Flu season begins – a double-dip recession ?
No way !     Really ?   How about recessions in Jan. 1980 – July 1980 and July 1981 – Nov. 1982.
At some point, the charade will end – no more hype by the Fed, the Administration and Street. That’s when the stock market will thumb its nose at the algos and head south for the winter.
Fed Chair Jerome Powell will present his position on the economy and trade  today.  He is mainly responsible for stock market bubble #1 Jan.2019 – Feb. 2020, and bubble #2 – March 2020 to the present.
Appointed to his prestigious office by President Trump, it can be assumed he will  attempt to inflate the bubble further.

Monday October 6, 20920 (DJIA: 27,682) “Will Covid Surge Impact a Struggling Economy”
What to do: Decide your tolerance for risk and raise the amount of cash necessary to cover it….and don’t worry about what other investors are doing, don’t listen to the boasts about their scores.– stay with your plan. The new normal is the flash crash, a swift plunge of 10%  12%.  So far, most have recovered within a reasonable amount of time – don’t count on that happening next time.

Why didn’t the market take a bigger hit Friday ?  Probably because so much of the trading is computerized (algorithms) and what happened Friday isn’t plugged into the algos’ programming – the difference between a computer and the human brain.
I expect a stimulus bill of $2.0 trillion before Nov. 3 (of course).  I think it is built into the market’s prices, but in truth, passage would confirm my belief that another wave of  unemployment, closings, bankruptcies, and another slump in business looms.
Possible, is an announcement by the NBER that the recession that started in February is over, owing to the sharp rebound in the economy from severely depressed levels earlier in the year.
Q3 GDP will be announced at  the end of October, and show a  rebound of more than 25% at an annual rate, but that is from depressed levels.  Close to 30 million Americans are on the unemployment rolls. While 857,000 jobs were added in September, that is down from 1.4 million added in August and 1.7 million in July.  Reportedly, more layoffs are planned for retail, airlines, financial services, and oil.
Consumer Confidence (current and future expectations) is rebounding sharply from severely depressed levels earlier in the year, but still below peaks hit prior to COVID-19.
But COVID is surging again in New York, California, Texas, Wisconsin, Florida and the upper mid-west, especially in states that are re-opened and students are returning to school..
Just about the time it appeared safe to step out to pre-COVID lifestyles, risk raises its ugly head.
BOTTOM LINE:
        Today’s rebound is suspect since the presidency is in question, and COVID is on the rampage again.  President Trump’s joyride-photo-op  yesterday raises questions about his stability.  Congress has not been kept in the loop on his condition, a serious risk to national security.  BIZZARE !
This kind of irresponsible, immature behavior has never been experienced with past presidents.   But like I noted above, the Street’s algos are not programmed for the dire risks such behavior poses. Maybe we won’t pay a price, however based on time-tested measures of value, stocks are historically overvalued.
        But the Street isn’t phased by outlandish domestic and international events.  That’s arrogance, and you know what that precedes.
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Near-term Resistance/support levels for the market indexes.
Resistance begins at: DJIA:27,900; S&P 500: 3,373; Nasdaq Comp.: 11,176
Support is: DJIA: 27,720; S&P 500: 3,355; Nasdaq Comp.: 11,110
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Follow up to last week’s projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/2
Facebook (FB: 263)                       251                      244       Close:     265
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,199
Apple (AAPL: 112)                         103                       103      Close:      116
Netflix: (NFLX: 483)                       437                      466       Close:      520
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,486
Tesla (TSLA: 441)                           377                       407      Close:     425
Microsoft (MSFT: 215)                 191                       196       Close:    210
Key near-term resistance:
FB:262*; AMZN:3,140; AAPL: 114*; NFLX: 507*; GOOG: 1,466*; TSLA: 420; MSFT: 207*        * Update

 

Friday October 2, 2020 (DJIA: 27,816) “Trump Has COVID – Wall Street Selling”
President Trump and First Lady Melania Trump  have tested positive for COVID-19.  Futures are down sharply.  Ironic !
This is a major uncertainty, not like the assassination of President John Kennedy, but an uncertainty of a much different kind.  Coming 31 days before the election, the question rises, does he resign, keep campaigning, or be hospitalized with the outcome uncertain.
WHAT TO EXPECT:
The assassination of President John Kennedy was final, Trump’s infection with COVID will be a lingering uncertainty with Vice President Pence taking charge temporarily or permanently depending.
With Kennedy, the market found a level that discounted the event. However, expect a probing volatility going forward this time with rallies and sell-offs in response to news of Trump’s condition. I was a broker in a small office in Pennsylvania  when Kennedy was assassinated, taking calls from panicking investors, many not even my own.  “Sell Everything, I heard”
I expect a sell off at the open, a rally around midday as the Street thinks this won’t be so bad, then a plunge into the close as we head into the weekend.
Generally, I see the DJIA  dropping to 27,140 by 10:00 a.m., rallying to 27,420 at mid-day then a sell-off to 26,700 – 26,800 at the close.
Near-term RISK is:  DJIA: 25,000; S&P 500: 3,000; Nasdaq Comp.: 9,750.
If he wasn’t so untruthful during his tenure, there wouldn’t be any question that this is a ploy to  curry favor and votes.   Callous  of me ?
        No one has been more callous over the last 5 years than Trump, and especially this year as tens of thousands of AMERICANS have died unnecessarily due to his denial that COVID-19 needed immediate attention early in 2020.
The Street is hoping for another stimulus, and I think it will get one, probably running around $2.0 trillion. Democrats were pushing for a much higher one ($3.5 T), but will settle for less. The Republicans need to appease what few real conservatives are left and clearly cannot afford not to go along with one.
What does all this say ?
IMHO, it says our economy will run out of steam without one.
While the economy had rebounded sharply in recent months, it did so from a severely depressed level and with the help of unprecedented stimulus.
Would all this stimulus be taking place if this wasn’t a presidential election year  ?
BOTTOM LINE:
The futures point to a big sell-off at the open.  That’s what  a sudden uncertainty does to the stock market, and especially one as overvalued as this one. Anyone who has heeded my warnings to raise cash will:
1) not get hurt as much as if they were fully invested.
2) will be in a position to buy in at lower prices.
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Thursday October 1, 2020 (DJIA: 27,781) “Stimulus Bill $2.0Trillion Likely – Sell the News”
The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
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Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
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Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Street Now Favors Biden ?

INVESTOR’S first read.com – Daily edge before the open
DJIA:28,148
S&P 500: 3.408
Nasdaq Comp.:11,332
Russell: 1,581
Tuesday October 6, 2020    8:57 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
This has become such a news sensitive market jerking one way, than another like a drunk line dancer.
      Are shorts being chased once again, if so, is it because the Street is worried that Trump will  lose re-election, or is it worried he will win ?
      After four years, the Street may opt for sanity, an end to the rape and pillage of our democratic republic and the daily effort to divide us as Americans.
       Never has the value of  the “rule of law”  been more evident, the importance of truthfulness vs. daily lying and optics.
WHAT DOES THIS MEAN FOR THE STOCK MARKET ?
So far – nothing.  There is something about risk the Street doesn’t get, spoiled by 11 years of economic expansion and bull market interrupted briefly this year for a COVOID moment.
Rigid buy-only algos have  driven stock prices far beyond realistic levels, levels not seen in a hundred years.
What will trigger a reality check ?   How about a touch of acrophobia, or FOMO – not fear of missing out on a buying opportunity, but fear of missing a selling opportunity before the big  flush.”
BOTTOM LINE:
The bear market that started in February was over in a couple months, juiced by unprecedented Fed and Congressional stimulus, which triggered a sharp rebound in the economy possibly enough to cause the  NBER to announce the recession is over in a month or two.
So much damage has been done by COVID and the necessary response to COVID, and now we are seeing a rebound in COVID infections  as Flu season begins – a double-dip recession ?
No way !     Really ?   How about recessions in Jan. 1980 – July 1980 and July 1981 – Nov. 1982.
At some point, the charade will end – no more hype by the Fed, the Administration and Street. That’s when the stock market will thumb its nose at the algos and head south for the winter.
Fed Chair Jerome Powell will present his position on the economy and trade  today.  He is mainly responsible for stock market bubble #1 Jan.2019 – Feb. 2020, and bubble #2 – March 2020 to the present.
Appointed to his prestigious office by President Trump, it can be assumed he will  attempt to inflate the bubble further.    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Monday October 6, 20920 (DJIA: 27,682) “Will Covid Surge Impact a Struggling Economy”
What to do: Decide your tolerance for risk and raise the amount of cash necessary to cover it….and don’t worry about what other investors are doing, don’t listen to the boasts about their scores.– stay with your plan. The new normal is the flash crash, a swift plunge of 10%  12%.  So far, most have recovered within a reasonable amount of time – don’t count on that happening next time.

Why didn’t the market take a bigger hit Friday ?  Probably because so much of the trading is computerized (algorithms) and what happened Friday isn’t plugged into the algos’ programming – the difference between a computer and the human brain.
I expect a stimulus bill of $2.0 trillion before Nov. 3 (of course).  I think it is built into the market’s prices, but in truth, passage would confirm my belief that another wave of  unemployment, closings, bankruptcies, and another slump in business looms.
Possible, is an announcement by the NBER that the recession that started in February is over, owing to the sharp rebound in the economy from severely depressed levels earlier in the year.
Q3 GDP will be announced at  the end of October, and show a  rebound of more than 25% at an annual rate, but that is from depressed levels.  Close to 30 million Americans are on the unemployment rolls. While 857,000 jobs were added in September, that is down from 1.4 million added in August and 1.7 million in July.  Reportedly, more layoffs are planned for retail, airlines, financial services, and oil.
Consumer Confidence (current and future expectations) is rebounding sharply from severely depressed levels earlier in the year, but still below peaks hit prior to COVID-19.
But COVID is surging again in New York, California, Texas, Wisconsin, Florida and the upper mid-west, especially in states that are re-opened and students are returning to school..
Just about the time it appeared safe to step out to pre-COVID lifestyles, risk raises its ugly head.
BOTTOM LINE:
        Today’s rebound is suspect since the presidency is in question, and COVID is on the rampage again.  President Trump’s joyride-photo-op  yesterday raises questions about his stability.  Congress has not been kept in the loop on his condition, a serious risk to national security.  BIZZARE !
This kind of irresponsible, immature behavior has never been experienced with past presidents.   But like I noted above, the Street’s algos are not programmed for the dire risks such behavior poses. Maybe we won’t pay a price, however based on time-tested measures of value, stocks are historically overvalued.
        But the Street isn’t phased by outlandish domestic and international events.  That’s arrogance, and you know what that precedes.
…………………………………………………………………………
Near-term Resistance/support levels for the market indexes.
Resistance begins at: DJIA:27,900; S&P 500: 3,373; Nasdaq Comp.: 11,176
Support is: DJIA: 27,720; S&P 500: 3,355; Nasdaq Comp.: 11,110
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/2
Facebook (FB: 263)                       251                      244       Close:     265
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,199
Apple (AAPL: 112)                         103                       103      Close:      116
Netflix: (NFLX: 483)                       437                      466       Close:      520
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,486
Tesla (TSLA: 441)                           377                       407      Close:     425
Microsoft (MSFT: 215)                 191                       196       Close:    210
Key near-term resistance:
 

FB:262*; AMZN:3,140; AAPL: 114*; NFLX: 507*; GOOG: 1,466*; TSLA: 420; MSFT: 207*        * Update

 

Friday October 2, 2020 (DJIA: 27,816) “Trump Has COVID – Wall Street Selling”
President Trump and First Lady Melania Trump  have tested positive for COVID-19.  Futures are down sharply.  Ironic !
This is a major uncertainty, not like the assassination of President John Kennedy, but an uncertainty of a much different kind.  Coming 31 days before the election, the question rises, does he resign, keep campaigning, or be hospitalized with the outcome uncertain.
WHAT TO EXPECT:
The assassination of President John Kennedy was final, Trump’s infection with COVID will be a lingering uncertainty with Vice President Pence taking charge temporarily or permanently depending.
With Kennedy, the market found a level that discounted the event. However, expect a probing volatility going forward this time with rallies and sell-offs in response to news of Trump’s condition. I was a broker in a small office in Pennsylvania  when Kennedy was assassinated, taking calls from panicking investors, many not even my own.  “Sell Everything, I heard”
I expect a sell off at the open, a rally around midday as the Street thinks this won’t be so bad, then a plunge into the close as we head into the weekend.
Generally, I see the DJIA  dropping to 27,140 by 10:00 a.m., rallying to 27,420 at mid-day then a sell-off to 26,700 – 26,800 at the close.
Near-term RISK is:  DJIA: 25,000; S&P 500: 3,000; Nasdaq Comp.: 9,750.
If he wasn’t so untruthful during his tenure, there wouldn’t be any question that this is a ploy to  curry favor and votes.   Callous  of me ?
        No one has been more callous over the last 5 years than Trump, and especially this year as tens of thousands of AMERICANS have died unnecessarily due to his denial that COVID-19 needed immediate attention early in 2020.
The Street is hoping for another stimulus, and I think it will get one, probably running around $2.0 trillion. Democrats were pushing for a much higher one ($3.5 T), but will settle for less. The Republicans need to appease what few real conservatives are left and clearly cannot afford not to go along with one.
What does all this say ?
IMHO, it says our economy will run out of steam without one.
While the economy had rebounded sharply in recent months, it did so from a severely depressed level and with the help of unprecedented stimulus.
Would all this stimulus be taking place if this wasn’t a presidential election year  ?
BOTTOM LINE:
The futures point to a big sell-off at the open.  That’s what  a sudden uncertainty does to the stock market, and especially one as overvalued as this one. Anyone who has heeded my warnings to raise cash will:
1) not get hurt as much as if they were fully invested.
2) will be in a position to buy in at lower prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Thursday October 1, 2020 (DJIA: 27,781) “Stimulus Bill $2.0Trillion Likely – Sell the News”
The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
…………………………………………………………………………………………..
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
                                               
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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Will COVID Surge Impact A Struggling Economy ?

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,682
S&P 500: 3,348
Nasdaq Comp.:11,075
Russell: 1,539
Monday  October 5, 2020    8:57 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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
What to do: Decide your tolerance for risk and raise the amount of cash necessary to cover it….and don’t worry about what other investors are doing, don’t listen to the boasts about their scores.– stay with your plan. The new normal is the flash crash, a swift plunge of 10%  12%.  So far, most have recovered within a reasonable amount of time – don’t count on that happening next time.

Why didn’t the market take a bigger hit Friday ?  Probably because so much of the trading is computerized (algorithms) and what happened Friday isn’t plugged into the algos’ programming – the difference between a computer and the human brain.
I expect a stimulus bill of $2.0 trillion before Nov. 3 (of course).  I think it is built into the market’s prices, but in truth, passage would confirm my belief that another wave of  unemployment, closings, bankruptcies, and another slump in business looms.
Possible, is an announcement by the NBER that the recession that started in February is over, owing to the sharp rebound in the economy from severely depressed levels earlier in the year.
Q3 GDP will be announced at  the end of October, and show a  rebound of more than 25% at an annual rate, but that is from depressed levels.  Close to 30 million Americans are on the unemployment rolls. While 857,000 jobs were added in September, that is down from 1.4 million added in August and 1.7 million in July.  Reportedly, more layoffs are planned for retail, airlines, financial services, and oil.
Consumer Confidence (current and future expectations) is rebounding sharply from severely depressed levels earlier in the year, but still below peaks hit prior to COVID-19.
But COVID is surging again in New York, California, Texas, Wisconsin, Florida and the upper mid-west, especially in states that are re-opened and students are returning to school..
Just about the time it appeared safe to step out to pre-COVID lifestyles, risk raises its ugly head.
BOTTOM LINE:
        Today’s rebound is suspect since the presidency is in question, and COVID is on the rampage again.  President Trump’s joyride-photo-op  yesterday raises questions about his stability.  Congress has not been kept in the loop on his condition, a serious risk to national security.  BIZZARE !
This kind of irresponsible, immature behavior has never been experienced with past presidents.   But like I noted above, the Street’s algos are not programmed for the dire risks such behavior poses. Maybe we won’t pay a price, however based on time-tested measures of value, stocks are historically overvalued.
        But the Street isn’t phased by outlandish domestic and international events.  That’s arrogance, and you know what that precedes.
…………………………………………………………………………
Near-term Resistance/support levels for the market indexes.
Resistance begins at: DJIA:27,900; S&P 500: 3,373; Nasdaq Comp.: 11,176
Support is: DJIA: 27,720; S&P 500: 3,355; Nasdaq Comp.: 11,110
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/2
Facebook (FB: 263)                       251                      244       Close:     259
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,125
Apple (AAPL: 112)                         103                       103      Close:      113
Netflix: (NFLX: 483)                       437                      466       Close:      503
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,458
Tesla (TSLA: 441)                           377                       407      Close:     415
Microsoft (MSFT: 215)                 191                       196       Close:    206
Key near-term resistance: FB:262*; AMZN:3,140; AAPL: 114*; NFLX: 507*; GOOG: 1,466*; TSLA: 420; MSFT: 207*        * Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
RECENT POSTS:
Friday October 2, 2020 (DJIA: 27,816) “Trump Has COVID – Wall Street Selling”
President Trump and First Lady Melania Trump  have tested positive for COVID-19.  Futures are down sharply.  Ironic !
This is a major uncertainty, not like the assassination of President John Kennedy, but an uncertainty of a much different kind.  Coming 31 days before the election, the question rises, does he resign, keep campaigning, or be hospitalized with the outcome uncertain.
WHAT TO EXPECT:
The assassination of President John Kennedy was final, Trump’s infection with COVID will be a lingering uncertainty with Vice President Pence taking charge temporarily or permanently depending.
With Kennedy, the market found a level that discounted the event. However, expect a probing volatility going forward this time with rallies and sell-offs in response to news of Trump’s condition. I was a broker in a small office in Pennsylvania  when Kennedy was assassinated, taking calls from panicking investors, many not even my own.  “Sell Everything, I heard”
I expect a sell off at the open, a rally around midday as the Street thinks this won’t be so bad, then a plunge into the close as we head into the weekend.
Generally, I see the DJIA  dropping to 27,140 by 10:00 a.m., rallying to 27,420 at mid-day then a sell-off to 26,700 – 26,800 at the close.
Near-term RISK is:  DJIA: 25,000; S&P 500: 3,000; Nasdaq Comp.: 9,750.
If he wasn’t so untruthful during his tenure, there wouldn’t be any question that this is a ploy to  curry favor and votes.   Callous  of me ?
        No one has been more callous over the last 5 years than Trump, and especially this year as tens of thousands of AMERICANS have died unnecessarily due to his denial that COVID-19 needed immediate attention early in 2020.
The Street is hoping for another stimulus, and I think it will get one, probably running around $2.0 trillion. Democrats were pushing for a much higher one ($3.5 T), but will settle for less. The Republicans need to appease what few real conservatives are left and clearly cannot afford not to go along with one.
What does all this say ?
IMHO, it says our economy will run out of steam without one.
While the economy had rebounded sharply in recent months, it did so from a severely depressed level and with the help of unprecedented stimulus.
Would all this stimulus be taking place if this wasn’t a presidential election year  ?
BOTTOM LINE:
The futures point to a big sell-off at the open.  That’s what  a sudden uncertainty does to the stock market, and especially one as overvalued as this one. Anyone who has heeded my warnings to raise cash will:
1) not get hurt as much as if they were fully invested.
2) will be in a position to buy in at lower prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Thursday October 1, 2020 (DJIA: 27,781) “Stimulus Bill $2.0Trillion Likely – Sell the News”
The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
…………………………………………………………………………………………..
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
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Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trump Has COVID – Selling on Wall Street

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,816
S&P 500: 3,380
Nasdaq Comp.:11,326
Russell: 1,531
Friday   October 2, 2020    8:07 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.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
President Trump and First Lady Melania Trump  have tested positive for COVID-19.  Futures are down sharply.  Ironic !
This is a major uncertainty, not like the assassination of President John Kennedy, but an uncertainty of a much different kind.  Coming 31 days before the election, the question rises, does he resign, keep campaigning, or be hospitalized with the outcome uncertain.
WHAT TO EXPECT:
The assassination of President John Kennedy was final, Trump’s infection with COVID will be a lingering uncertainty with Vice President Pence taking charge temporarily or permanently depending.
With Kennedy, the market found a level that discounted the event. However, expect a probing volatility going forward this time with rallies and sell-offs in response to news of Trump’s condition. I was a broker in a small office in Pennsylvania  when Kennedy was assassinated, taking calls from panicking investors, many not even my own.  “Sell Everything, I heard”
I expect a sell off at the open, a rally around midday as the Street thinks this won’t be so bad, then a plunge into the close as we head into the weekend.
Generally, I see the DJIA  dropping to 27,140 by 10:00 a.m., rallying to 27,420 at mid-day then a sell-off to 26,700 – 26,800 at the close.
Near-term RISK is:  DJIA: 25,000; S&P 500: 3,000; Nasdaq Comp.: 9,750.
If he wasn’t so untruthful during his tenure, there wouldn’t be any question that this is a ploy to  curry favor and votes.   Callous  of me ?
        No one has been more callous over the last 5 years than Trump, and especially this year as tens of thousands of AMERICANS have died unnecessarily due to his denial that COVID-19 needed immediate attention early in 2020.
The Street is hoping for another stimulus, and I think it will get one, probably running around $2.0 trillion. Democrats were pushing for a much higher one ($3.5 T), but will settle for less. The Republicans need to appease what few real conservatives are left and clearly cannot afford not to go along with one.
What does all this say ?
IMHO, it says our economy will run out of steam without one.
While the economy had rebounded sharply in recent months, it did so from a severely depressed level and with the help of unprecedented stimulus.
Would all this stimulus be taking place if this wasn’t a presidential election year  ?
BOTTOM LINE:
The futures point to a big sell-off at the open.  That’s what  a sudden uncertainty does to the stock market, and especially one as overvalued as this one. Anyone who has heeded my warnings to raise cash will:
1) not get hurt as much as if they were fully invested.
2) will be in a position to buy in at lower prices.
……………………………………………………………………………
Near-term Resistance/support levels for the market indexes.
Resistance begins at: DJIA:27,889; S&P 500: 3,387; Nasdaq Comp.: 11,417
Support is: DJIA: 27,527; S&P 500: 3,349; Nasdaq Comp.: 11,300
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:   RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good trading opportunities.
Price: Close 9/16
          Proj. Support       Low       10/2
Facebook (FB: 263)                       251                      244       Close:     266
Amazon (AMZN:3,078)             2,907                    2,871      Close:  3,221
Apple (AAPL: 112)                         103                       103      Close:      116
Netflix: (NFLX: 483)                       437                      466       Close:      527
Google (GOOG: 1,520)              1,451                   1,406       Close:   1,490
Tesla (TSLA: 441)                           377                       407      Close:     448
Microsoft (MSFT: 215)                 191                       196       Close:    212
Key near-term resistance: FB:272*; AMZN:3,251; AAPL: 119*; NFLX: 537*; GOOG: 1,516*; MSFT: 217*    Growth stocks had a big day yesterday far outperforming industrials.        * Update
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RECENT POSTS:
Thursday October 1, 2020 (DJIA: 27,781) “Stimulus Bill $2.0Trillion Likely – Sell the News”
The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
…………………………………………………………………………………………..
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stimulus Bill $2.0 Trillion Likely – Sell the News

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,781
S&P 500: 3,363
Nasdaq Comp.:11,167
Russell: 1,507
Thursday   October 1, 2020    8:32 a.m.
……………………………………..
brooksie01@aol.com
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November 15, 2019 (DJIA – 28,004)   I Called for a bear market to start in January, that the initial plunge would be 12%-18% – “straight down.” It started mid-February, dropped 16.3%, rallied then  plunged another 32.8%.
…………………………………………………..
January 20, 2020 (DJIA:29,348) My blog,  “INSANITY,” projected a bear market decline of  30% – 45%. The DJIA plunged 38.4% in 21 days.
………………………………………………….
With the DJIA at 18,591on March 24, I wrote that , while I see lower prices later in the year, I expect a big rally with the upside potential of DJIA 22,037 (S&P 500 : 2,617) – it went higher.
With the DJIA at 23,942 (S&P 500) on April 15, I
called for  an end to  rally, up 29% but well short of  today.   how far the rally extended.  On May 18, I began to warn of  Bubble #2
August 6, I headline “SELL” with DJIA at 27,201 (S&P 500:3,327). Another “Fed” bubble.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
     The economy is still rebounding from a severely depressed Q2.  This is expected, the key will be Q4 and beyond, since COVID-19 is spiking again after crushing the economy.   Damage will take a long time to repair.
The market was up yesterday mostly in response to improving economic numbers. ADP Employment: 749,000 jobs added vs. 650,000 projected; Chicago Business Activity index at 62.4, better than expected; Q2 GDP down 31.4% (ann.rate) an improvement from the last est. of -31.7%.  Q3 expected to be a plus 25 – 30% and reported in late October; Pending Home Sales up 8.8%.
I expect  a $2.0 trillion stimulus bill will be passed within two weeks. It’s a two-edged sword.  The Administration wants credit for it, but does not want to help the Democrats who will likely take over the White House, possibly the Senate.
Most likely, the stimulus bill is already built  into stock prices and a sell-off would follow its announcement.
     I personally believe Vice President Biden thrashed President Trump in the Tuesday debate.  Confirmation bias will influence some voters to conclude otherwise.
So far, I am wrong about the Street’s wish list. Maybe yesterday’s solid jump was a relief that Biden will win and the dangerously  unpredictable  President is on his way out.  Afterall, what else can the Street and corporate America get after a huge, unjustified tax cut and the gutting of regs, many of which were originally designed to protect individuals and improve quality of life.
Maybe they will throw Trump under the bus now that they have what they want.
BOTTOM LINE:
    The market indexes will press higher today, but are challenged to  recover all that has been lost since their peak on September 2 at DJIA: 29,199; S&P 500: 3,588; Nasdaq Comp.: 10,913.
Resistance begins at:  DJIA: 28,077; S&P 500: 3,401; Nasdaq Comp.: 11,317
Support begins at        DJIA: 27,677; S&P 500: 3,349; Nasdaq Comp.: 11,147
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,148
Apple (AAPL: 112)                         103         103    Close:      116
Netflix: (NFLX: 483)                       437         466     Close:     500
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     429
Microsoft (MSFT: 215)                 191          196     Close:    210
Key near-term resistance: FB:262; AMZN:3,251; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 435; MSFT: 214. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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RECENT POSTS:
Wednesday  September 30, 2020 (DJIA: 27,542) “Trump Got His Fat Ass Kicked – Now That’s Bullish !”
Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
…………………………………………………………………………………………..

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

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

 

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

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

 

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

INVESTOR’S first read.com – Daily edge before the open
DJIA:27,412
S&P 500: 3,335
Nasdaq Comp.:11,055
Russell: 1,504
Wednesday   September 30, 2020    8:12 a.m.
……………………………………..
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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Looks like a lower market at the open, after Vice President Joe Biden was a far better debater of issues last night than President Trump who did a pretty good job of reminding viewers how rude and uninformed he is.
Anyone paying attention will accept the country (world) cannot afford four more years of blundering. As noted below, the stock market is up as a result of Fed Chair Jerome Powell’s  actions in 2019 and this year.  A Trump appointee to the prestigious job, Powell has assured Trump the stock market was strong, or at least so far.
Actually a Biden win would be bullish if it weren’t for the fact the stock market is so overvalued to begin with.  Decency, truthfulness and respect for the office of President of the United States would be restored, our global defenses would  be fortified, rioting curtailed, healthcare expanded, and the playing field across the board leveled.
Most important, our democratic republic would no longer be under siege here and abroad as the rule of law becomes priority one.
Powell, a Trump Toady
      I have ranked on Fed Chair Jerome Powell as a Trump “Toady,” since January 2019, when he very subtly began hyping the market following Q4’s 20% plunge and near miss on a recession, clearly not something Republicans wanted prior to a key election year. Less subtle were interest three rate cuts in 2019, two in 2020  and a pledge in June for zero rates going forward  indefinitely.
Axios Markets’ Dion Rabouin confirmed my feelings yesterday, noting “the man behind booming U.S. asset prices is really Jerome Powell.  Rabouin goes on to say, “Powell’s decision to roll interest rates back to zero and provide markets with $3 trillion in liquidity has kept indexes hitting  record highs even as close to 30 million Americans collect unemployment benefits.”  According to some, Powell has violated the Fed’s founding charter, the Federal Reserve Act effectively nationalizing the market  for  government and corporate bonds.
Prior to the 21-day, 35% plunge in stock prices in February/March, Powell’s rhetoric and interest rate cuts triggered Bubble #1 (January 2019 – 2020, and since that flash crash has created Bubble #2 from February 2020 to September 3, 2020.
BOTTOM LINE:
One of  the Fed’s key responsibilities is to contain inflation. Since  there hasn’t been meaningful inflation for 38 years, it appears the Fed must justify its existence by managing stock and bond prices.
However, by doing so, it is artificially creating levels that are unjustified, which sets up a flash crash when something happens or the reality of overvalued prices triggers a sudden adjustment to levels that more realistically represent real values.
     Everyone is best served if the Fed finds something else to do that doesn’t set markets up for plunges that devastate investors.
I have said on a number of occasions, This is a phony economy, a phony stock market and a phony Administration. What is really bullish is, we have a chance to change that on November 3rd  with a Biden victory.
      Intitially, the stock market will need to find a more realistic level, valuewise.
It will be “roll up your sleeves time,” as competent people will be appointed to unfilled key positions, steps to address climate change and fortify our international business and defense relationships renewed, and  the country united  between people and a common goal.
That would be “BULLISH,” that’s a policy that would have legs well into the future.
…………………………………………………………………………………………..

Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     262
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,144
Apple (AAPL: 112)                         103         103    Close:      114
Netflix: (NFLX: 483)                       437         466     Close:     493
Google (GOOG: 1,520)              1,451       1,406   Close:  1,469
Tesla (TSLA: 441)                           377          407    Close:     419
Microsoft (MSFT: 215)                 191          196     Close:    207
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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RECENT POSTS:
Tuesday September 29, 2020 (DJIA: 27,584) “Extreme Volatility Ahead”
The three-day  rebound in the market is running into resistance, an area that produced more sellers than buyers  going back to September 3 when the DJIA peaked at 29,199, the S&P 500 at 3,588, and the Nasdaq Comp. at 12,074.
It took  a 9.1% drop in the DJIA, a 10.6% drop in the S&P 500, and a 12.9% drop in the Nasdaq Comp. to draw investors back into the market.
W are faced with the first of three presidential debates tonight. I am not sure what Wall Street wants at this point. They, and corporate America, got their
tax cuts and de-regulation of a number of industries,  a stacked Supreme Court, and the termination of long-standing international alliances, but what else can they hope for unless they think a country dangerously divided more than at any time since the Civil War, an out of control pandemic, the 10th Republican recession out of the last 11 recessions, and the most corrupt, poorly staffed administration in memory does it for them.  Careful what you wish for !
A Biden win would result in a temporary slide in stock prices from the most overvalued stock market  in history as governance returns to respectability, international relationships are mended, COVID-19 is addressed with an effective plan, and this is BIG – the lying at the top STOPS !
I don’t care what value the Street puts on that, but the gutting of our democratic republic has to STOP.
BOTTOM LINE:
Uncertainty about the outcome of the election will generate a lot of volatility up to and beyond  November 3.  Concern for an undecided outcome due to Republican legal challenges in a number of key states could trigger a free-fall in stock prices.
This is a nation of laws.  Erode that any further, and you have a banana republic  – chaos, conflict, further division, a economic depression – EVERYTHING OUR FOREIGN ADVERSARIES WANT.  Are these people agents of a foreign country, or do they just act ones ?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/27
Facebook (FB: 263)                       251         244     Close:     256
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,174
Apple (AAPL: 112)                         103         103    Close:      115
Netflix: (NFLX: 483)                       437         466     Close:     490
Google (GOOG: 1,520)              1,451       1,406   Close:  1,464
Tesla (TSLA: 441)                           377          407    Close:     421
Microsoft (MSFT: 215)                 191          196     Close:    209
Key near-term resistance: FB:262; AMZN:3,251*; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold.* Update
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Monday September 28, 2020 (DJIA 27,173)  “Rally Needs: Stimulus, Covid, Recession”
Richmond Fed President Tom Barkin said last Thursday the U.S. recession is over, and St. Louis Fed President James Bullard agrees, saying the economy could fully recover by year-end.
       However, it won’t be official until the National Bureau of Economic Research’s (NBER) business cycle dating committee says so, and that could come Days before the November 3 elections, or not for months.
       All this with 30 million Americans on unemployment, entire industries on life support, and COVID infections on the rise going into flu season.
       As expected, the rebound from a severely depressed economy has been surprisingly sharp, but that is normal, especially since the economy was juiced by an unprecedented stimulus by the Fed and Congress.
Unless Congress approves another stimulus,  the economy will now be off the government teet and we will then get a better idea of how good it is running.
 Democrats in the U.S. house plan to pass a $2.4 trillion stimulus package shortly which will extend the economic rebound. Without it, it looks like an extension of the recession that started in March or we slide into a second recession, a “W”  rebound, not an “L”.
       Bubble # 2 may have  been pricked on September 3. It’s too early to tell.
A technical rally is justified after the sharp plunges in the market averages of DJIA (-9%, S&P 500: 11%, Nasdaq Comp.: 14%).
Was it something more than technical ?
Guess we’ll see.
I would be surprised if we didn’t get a stimulus package before Nov. 3. I also expect an announcement of a treatment  and/or vaccine for COVID though availability won’t be for many months.  It could be the  real McCoy, or Administration hype.
GOOD news !  Fortune 100 companies are pledging $3.3 Billion to reverse inequality  after the death of George Floyd,  including housing, health care and community change.  Credit due for people’s outrage and mostly peaceful demonstrations.
BOTTOM LINE:
     Big rally at the open.  The key will be if it can hold. A one-day rally failure with the market giving up all its gain would suggest a test of recent lows or another leg down.
I expect the market to encounter  major resistance starting at:
DJIA: 27,615; S&P 500: 3,347; Nasdaq Comp.: 11,091.
That would be technical. News on a stimulus, COVID, recession could pump it higher.
Just bear in mind, based on historical precedent, this market was   seriously overvalued before COVID struck in Q1, and is even more overvalued now with corporate earnings in a tailspin.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>….
Follow up to last week’s projection for leading growth stocks:
INITIAL RISK For A DECLINE POSTED WED: SEPT. 16
My supports held up very nicely, even produced good quick-hit trading opportunities, but they won’t hold next time down without stimulus.
Price: Close 9/16
                    RISK  Low  Mon. 9/24
Facebook (FB: 263)                       251         244     Close:     255
Amazon (AMZN:3,078)             2,907       2,871    Close:  3,095
Apple (AAPL: 112)                         103         103    Close:      112
Netflix: (NFLX: 483)                       437         466     Close:     483
Google (GOOG: 1,520)              1,451       1,406   Close:  1,445
Tesla (TSLA: 441)                           377          407    Close:     407
Microsoft (MSFT: 215)                 191          196     Close:    208
Key near-term resistance: FB:262; AMZN:3,158; AAPL: 118; NFLX: 497; GOOG: 1,486; TSLA: 424; MSFT: 213. Without a breakthrough on COVID or a stimulus, these levels won’t hold
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Friday September 25, 2020 Without Big News on COVID or Stimulus….Flash Crash #2”
The Democrats are prepping to pass a $2.4 trillion stimulus bill, down from May’s $3.4 trillion bill that the Republicans rejected.
    If passed by the House, Senate and Signed by Trump, it will do two things.
1) help some Americans who are on the edge
2) trigger a brief rally
3) warn investors that our economy is in a lot of trouble.
The technical chart patterns of leading stocks, and especially the technology sector, have flashed warning signals indicating the potential for yet another flash crash with risks listed below under Wednesday Sept 23rd.
But with 40 days before the most critical presidential election in our time, the Fed, Administration and Street will do everything legal, illegal, reasonable, unreasonable, ethical, non-ethical to prevent another huge hit to stocks.
With stocks more overvalued than at any time in modern history, a major crunch is justified.   The mega-cap tech stocks have run the market up from its COVID crash March 23 lows, but these stocks have broken their bullish chart patterns, and desperately need something big tur prevent a plunge to test the 2020 lows of DJIA: 18,213, S&P 500: 2,346, Nasdaq Comp.: 6,190, NDX: 6,771.

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

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

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

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

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.com
A Game-On Analysis, LLC publication
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Extreme Volatility Ahead

INVESTOR’S first read.com – Daily edge before the open
DJIA: 27,584
S&P 500: 3,351
Nasdaq Comp.:11,117
Russell: 1,510
Tuesday   September 29, 2020    8:21 a.m.
……………………………………..
brooksie01@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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

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

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

 

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

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

 

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

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

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

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

With Powell’s hype, expect the DJIA to find support at 27,150; the  S&P 500 from 3,240; and Nasdaq Comp. from 10, 525.
 FLASH CRASH ?
       Possible, but with Powell before Congress, hype from the Administration, and desperation from the powers on Wall Street, it may be justified, but a stretch.
       There should be some kind of rotation out of the growth stocks and into less overvalued industrials.
There is nothing good for stocks heading into the November 3 election.
Clearly there is no justification for  the S&P 500 to be this overvalued with the damage to the economy that COVID-19 has done, and the fact stocks were vastly overvalued before COVID struck.
But bubbles burst and when they do, the damage can be significant.
My support levels noted above do not assume a flash crash. I will deal with that in coming days.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.com
A Game-On Analysis, LLC publication
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rally Needs News: Stimulus, COVID, Recession

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

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

 

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

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

 

 

 

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

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

 

 

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

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

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

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

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

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

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

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

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

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

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>                                                    
George Brooks
Investor’s first read.com
brooksie01@aol.com
A Game-On Analysis, LLC publication
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

That’s not what makes America great, that’s what erodes all the things we hold dear to us, all the things that pave the way for a safe and prosperous future for those who follow us.
A Biden/Harris government with total control of Congress would have a lot of pieces to pick up. The first being to solidify the security of our democratic republic versus the Trump alternative of a quasi fascist state.
Real Republicans, should go for it, in fact, they are seriously missed today.  At least they understood the rule of law and the value of the “great experiment” gifted to us 244 years ago.
Biden has worked both sides of the aisle, which must be done going forward.
Our need for diversity is not limited to differences of color, religion and preferences, but political positions the blending of which produce results.
 So, what about the stock market ?
Ten out of the last 11 recessions have been with a Republican in the White House. Re-election of Trump would make it 11 out of 12, because the current  economic “bounce” will yield to another recession in face of economic, domestic and international policies that benefit  only a tiny percent of our populace.
There have been bear markets without recessions, but never recessions without a bear market.  The 21-day 35% bear market this year  was over before any pain was dealt out.
The stock market is bubbling out of control, but can bubble further. The Street is spoiled rotten by an 11-year old economic expansion and bull market.
Last call came a long time ago, maybe 12 Bud lights or six Martinis ago.
The next bear market will be the BIG one, down 55% to 60%.
      Why ?
      Because we are living a lie, bigger than Trump’s 20,000 in 4 years. This is a phony economy, phony stock market and phony administration.
Is there any better reason to raise cash and sit close to the exits prior to that “pop” that’s heard around the world          George Brooks
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George Brooks
Investor’s first read.com
brooksie01@aol.com
A Game-On Analysis, LLC publication
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Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.