Bulls in Panic Mode

Investor’s first read – Daily edge before the open
DJIA: 20,172
S&P 500: 2,307
Nasdaq Comp.:5,715
Russell 2000:1,378
Friday, February 10, 2017 9:08 a.m.
The Street is not paying any attention to political developments beyond the promise of tax cuts, deregulation and lots of spending.
Set everything else aside – Trump tweets, the dismantling of social services, civil rights, and equality achieved in the last 60 years.
These issues garner media headlines, but have little impact on the stock market.
Right now the Street sees tax breaks and deregulation as a boom for corporations in spite of pundits whom say it won’t happen soon, and in terms of tax breaks won’t be that big a deal.
We have to acknowledge that computers are calling the shots, and they may not be programmed for breaking news or opinions.
Worth mentioning again, is my belief that the Trump administration will put the United States on a war footing as the mid-term elections approach to put voters in a position where they don’t want to change Congressional control in face of a crisis.
It worked for George W. Bush in 2002 prior to the U.S. invasion of Iraq in March 2003.
It is reasonably safe to say, the next four years will feature unparalleled upheaval in the Unites States here and abroad with one constitutional crisis after another, testing the very existence of our constitutional (representative) republic.
What will the stock market do in face of such uncertainty ? My best guess is “BUMPY, but a great traders market with the potential for a dramatic blow off, as the unfettered greed replaces reason, even though the market is historically overpriced now.
At some point, the BIG money will quietly work its way out the exit before the crowd.
We are approaching my target of Dow 20,288 set on January 27 (see below: “My technical analysis of the 30 Dow…,” which was developed by technically analyzing each of the 30 Dow industrials separately then converting the results to the DJIA.
SUPPORT “today”: DJIA:20,141; S&P 500:2,306; Nasdaq Comp.:5,710
RESISTANCE “today”:DJIA:20,223;S&P 500:2,316;Nasdaq Comp.:5,726
– the prospect of big corporate tax cuts, deregulation, a big spend on the military and the infrastructure and the restructuring of long-standing trade agreements.
-the uncertainties of the repeal of Obamacare
-talk of privatization of Medicare and Social Security
-possible undermining of NATO and the European Union
-a trade war of sorts.
-lifting of sanctions on Russia for its incursion in the Crimea and actions in Syria, adding to questions already breached.
-continued internal polarization of America and the possible extension of such to other countries.
-intense economic stimulation by the Trump/Republican Congress stands to trigger a rebound of inflationary pressures forcing the Fed to bump interest rates sooner than expected.
-an increasing erosion of investor confidence in President Trump
I have never seen, or imagined, anything as bizarre as the behavior of this administration in more than 60 years of voting. IMHO, the Trump presidency is a BIG mistake, and when you make big mistakes, you pay a big price.
Narcissist : People who are excessively vain, paranoid, egotistic, selfish, stubborn, manipulative, boastful, incapable of criticism or resistance, ruthless, feel superior, defensive, shameless, arrogant, entitled, remorseless, abusive, vindictive, untruthful, and deny reality. It is estimated that 1% of all people have this personality disorder, and unfortunately America has one of those for its president.
He is a human wrecking ball and will further divide America at a time it needs to be united – that’s UN-AMERICAN !
It’s time for Americans to step up and say, “ENOUGH !” Trump has a disapproval rating in excess of 53% and that has to include people who voted for him.
Unchecked, Trump will set the United States back a hundred years. Not only will he instigate the dismantling of the European Community, but possibly but possibly the same for NATO.
At some point his plundering ego will adversely impact the stock market. If the BIG money gets spooked, that will happen soon and the correction will be swift and severe.
The sad point here is so many Americans possess many of the personality disorders that comprise a narcissistic personality if not outwardly, then inwardly where they endorse these flaws though pretend not to.
It seems that America “visits” a social conscience from time to time, then abandons it retracing much of the progress that has been made over the years.
America First, is really “Me First.” That’s understandable, but it hardly is the commitment that is necessary to fulfill the unmatched system our founding fathers gave us.
Polls show people believe Trump over the media. That says little about the public, which has unlimited access to the truth. Unfortunately, it cherry picks the source of its information, selecting only those it agrees with (confirmation bias).
One only has to look back on how long it took the general public to acknowledge that the Cheney/Bush lie about weapons of mass destruction was a lie to invade Iraq, a decision that destabilized the Mid-East – look at what we have now. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.4% vs. a Dec.31 est. of 3.0%.. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on earnings 12 months out is 16.9 x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of January 27, 2017, a reasonable risk is 20,013 a more extreme risk is 19,947 Near-term upside potential is 20,288.
 OPPORTUNITY: RISK: Selective opportunity ! Risk is reality at some point
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Speculative fever driven by expectations of tax cuts, lifting of regs., and lots of money dumped on economy.
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Trump’s Dodd-Frank Do-Over Diverted to Slow Lane With Obamacare, Steven T. Dennis and Elizabeth Dexheimer (2/7/2017) and “Trump’s Dodd-Frank Do-Over Diverted to Slow Lane With Obamacare.
George Brooks
Investor’s first read
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.

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