CATHARSIS NEEDED – RAISE CASH !

Investor’s first read – Daily edge before the open
DJIA: 22,024
S&P 500:2,468
Nasdaq  Comp.:6,345
Russell 2000: 1,383
Thursday,  Aug  17, 2017   9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 CATHARSIS NEEDED: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN. We will get through it !
      
As investors, people will have to decide what their tolerance for risk is and adjust  portfolios accordingly.
       Personally, I think a cash reserve of 40% is warranted, because based on what I have seen, over 50 years of writing about the market and related issues, President Trump is irrefutably unfit to be President and that spells “R-I-S-K !”
       Can the market go higher ? Yes, but only based on misguided hopes for a massive stimulus, or the removal of Trump from office. He is hopelessly narcissistic, extremely dangerous, a pathological liar, delusional and unpredictable.

       His Republican supporters are yet unaware that he is destroying their party, and a viable two party system is needed for balanced legislation.
        If he is removed from office, the risk here is vastly reduced, but I suspect Vice President Pence is tainted, as well. He did head up Trump’s campaign. As a
fall back, he is suspect.      

       Odds favor Trump will do, say, or instigate something so unacceptable, Congress will have no choice  but to impeach him.
       More than likely he will be forced from office by the findings of Special Counsel Robert Mueller’s probe revealing the biggest scandal of all-time.

       If he remains in office, worse yet runs for re-election, expect everything to hit rock bottom before an attempt to recover.

        Hopefully, one of the benefits coming out of all this is a better understanding of our U.S. Constitution, the rule of law, and a willingness of a do nothing Congress to legislate.
TODAY
     
At the close yesterday, the charts said this market can go higher, but  I think the downside risk is now much  greater than  the upside potential. Yesterday, I cited Ned Davis research that warned that five key measures of stock market value are as overbought as they were in 2000 prior to a 40% drop in the S&P 500.
      That simply means that the market is vulnerable, not that it will plunge today, but be forewarned.
      So far, all bear markets, including the big one (1932), have been followed by a recovery to new highs, but investors tend to panic at bottoms and sell out before that recovery.
      What’s more, recoveries can be slow and  racked with doubts.
      At more than 8 years (101 months) in length, this bull market is more than 3 times as long as the average of the last 15 bulls (30 months).  At 8 years (96 months) this economic recovery has exceeded the average since 1945 of 59 months by 62%.
      Talk of tax cuts, deregulation and the big spend will surface again and again, and may push stocks higher.  I suspect the BIG money is selling, as the smart money should be, as well.  Overvalued markets can get more overvalued, but market tops are easier to read in hindsight. 
       CONFIDENCE drives stock prices. I see no reason, except for the deluded, to be confident in what we are seeing in our President.

       There is an upside, though.  Resistance, across the board, is brewing among business leaders, the military, some politicians, institutions, and the public.
        It’s just that  it will take time for this to get results.  

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”:DJIA:21,917;S&P 500:2,451; Nasdaq Comp.:6,317
RESISTANCE “today” DJIA:;S&P 500:;Nasdaq Comp.:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CORPORATE EARNINGS
(updated July 27 , 2017)
Factset
      Q2 earnings growth  is projected at +10.2%,up from 6.5% at June 30. Q3 is projected at +4.9%, and Q4 at +5.3%. For 2017 as a whole growth is projected at a plus 9.4%.  Currently, the P/E on forward  earnings is 17.4 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently. Factset.com is well worth a visit, it breaks its projections down by industry
 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 7/14/17)
      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  June 15, 2017,  a reasonable risk is 21,876 extreme risk is 21,713. Near-term upside potential is 22,476.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 
POLITICAL/STOCK MARKET
NOTE: Due to the seriousness of political developments, I find it necessary to retain the following issues here, even though it gets cumbersome, since past commentary  continues to be confirmed by unfolding events.  Prior to January, I have never injected my personal political feelings into a stock market blog.  What is happening has the potential to adversely impact stock prices.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
CATHARSIS IMMINENT: I DON’T THINK WE AS A NATION WILL GET THROUGH THIS QUICKLY OR WITHOUT A LOT OF PAIN
………………………………………………………………………………………….
THE BIGEST RISK FACING AMERICA IS:
The inability of Americans to mentally and emotionally process information accurately, objectively and without bias to arrive at logical and well balanced conclusions.
…………………………………………………………………………………………..
ALL THE SIGNS ARE THERE FOR EVERYONE TO SEE. President Trump’s narcissistic personality disorder makes him UNFIT for the Presidency. We are at risk !
………………………………………………………………………………………..
LOOOOOOOOSING IT ! 
President Trump just disbanded the Manufacturing Council and the  Strategy &Policy Forum after 11 business leaders withdrew in protest of his support for the Alt-Right’s racist views. In truth, I think it’s more than that.  These leaders of the corporate world do not want to have any association with this very unpredictable, morally bankrupt president. This Narcissism 101. They see it for what it is and are trying to send a message – “Wake up, we have a problem – a big one !”
……………………………………………………………………………………………….
ANTIFA (Anti-Fascist Action
) is a organization dedicated to confront the Alt-Right/ white supremacist movement, and has actually been around for a long time. While antifa is not limited to the United States, it has been most effective here where white supremacy, racism, anti-semitism, and fascism is more prevalent. Most of its activities are nonviolent, but physical violence is warranted to reject these groups. Their ranks include people of many professions and cultures. Its ranks have grown rapidly, especially with Trump’s inauguration.
…………………………………………………………………………………….
The 24/7 news cycle has adversely impacted the accuracy of reporting.
The scramble to get the story first does not give reporters a chance to double check accuracy and report stories in depth. This is where print media has an edge,  unfortunately the news is old before their publication hits the street.
…………………………………………………………………………………………
917 HATE  GROUPS IN USA (Southern Poverty Law Center)
Go to: splcenter.org/hate-map for to see if you have any in your backyard. BUT, not all are what you may think. Included: anti-immigrant, anti-LGBT, anti-Muslim, black separatist, Christian identity, general hate, KKK, neo-confederate, neo-nazi, racist skinhead, holocaust denial, radical traditional Catholicism, white nationalist. That should make you feel better. I hate liver, but that’s beside the point.
……………………………………………………………………………………..
TRUMP LEGITIMIZES THE ALT-RIGHT

Yesterday Trump legitimized the Nazis, racist, white supremacy, and hate groups in general, but that should not surprise, three of his top advisers are Alt-Right graduates of Breitbart. What’s more, he loves to pit one person (group) against another, he craves it, just like an ancient Roman emperor, the ultimate in divisiveness.                                                                                                                      
………………………………………………………………………………………..
White Nationalism is represented at the highest level in the White House. Steve Bannon, co-founder of Breitfart News, a supporter of Nazis, white supremacists, KKK, is Trump’s chief strategist. Stephen Miller, a nationalist playing deep in right field, is rumored to become the White House’s communications director.
     Sebastion Gorka, deputy assistant to Trump, since he worked for Bannon at Breitfart.
     Is it any wonder he sides with these extremists ?
…………………………………………………………………………………..
DONT READ THIS AT BEDTIME ! – Radical right wing broadcaster, Sinclair Broadcast Group,  is on track to reach 70% of US households in its effort to match Fox News for neo-conservative impact with its pro-Trump media fake news. (Mother Jones 8/15/17)
……………………………………………………………………………………………..
WILL CONGRESS IMPEACH TRUMP IF MUELLER’S PORBE JUSTIFIES IT ?
Only if Vice President Pence gets off scot free, giving them a fall back position.
……………………………………………………………………………………………….  
EVER WONDER WHY THE NRA AND RIGHT WING EXTREMISTS HAVE PRESSED SO HARD FOR GUNS WITHOUT LIMITS ?
      It’s called a revolution, a takeover via intimidation in the streets. 
Does anyone really want to confront them, and who are they anyhow ? – your neighbor ? The quiet one at the mall ?  Hey, why not just sit down and shut up ?
      These anarchists don’t have to use their gun, just knowing they have one does  the job.

       But the ones in the street are insignificant. What’s scary is the silent support President Trump gets with close to 80% of Republicans supporting his outlandish behavior and relentless lying.
       He has the Presidency and three of his top advisers come out of Brietbart News, a racist media organization. .  Real Republicans and genuine conservatives should reject this and insist that he distance the influence of these extremists from his decisions. Unfortunately, the extremists (constitutional anarchists), have control of the Republican Party, having gunned down all acceptable Republican candidates in the primaries.
      The path to a quasi fascist state is not impossible under these circumstances, so much depends on whether the American voter is capable of understanding the danger of  a gradual erosion of checks and balances and freedoms written into our republic.

       The United States is the gem of all gems, the biggest of all enchiladas, why wouldn’t an ideology want to gain control of it ?
        In my opinion, that is just what is happening, and it’s scary.
……………………………………………………………………..
     CLOSET BIGOTS

Back from a week in Maine without my computer. Charlottesville was not the bombshell I warned about before leaving, however investors must be aware one or more are hovering.
    If white supremacists, Nazis, KKK, anti-semites, and haters of people of color think their ideas have a chance of developing a meaningful  following, let them watch people at the Newark airport for two hours. 
    My rough count put two-thirds of the people as people of color.  The terminal was packed, but everyone got along. Maybe all the trouble makers were in Charlottesville.
    What concerns me more than those out demonstrating are the
closet bigots. They talk equality and profess tolerance, but inwardly condone the behavior we saw in Virginia.
     Why should anyone be surprised if President Trump was slow to take on the white nationalists ? 
      He craves conflict between others, the kind of mentality that watches cock fights, dog fights. Yet he was too cowardly to serve in the military, getting 5 deferments during the Vietnam War.
……………………………………………………………………….
ALT-RIGHT (Investor’s first read Jan. 27, 2017)       

     The Alt-Right has been associated with nationalism, racism, xenophobia, which may well be true for some of its followers, but basically they are  well to the right of  neocons, and America does not want to go there, it isn’t who most of us are. 

        Some will call the current trend in our government fascist or totalitarianism, autocracy, even corporatocracy, kratocracy, or plutocracy, however, I see it simply as a rush to secure total control through rigging voting districts (gerrymandering) and voter suppression, repeatedly disseminating lies and misinformation often enough so people accept it as the truth, the manipulation of people’s priorities and simply taking advantage of their lack of information and inability to understand what is best for them. 

        Through these means, elements of  the extremist Republican party (Alt-Right) is now capitalizing on President Trump’s out-of-control ego and  his preoccupation with legitimacy as President, to quietly lock up control.

      One of the keystones of  fascism is to discredit, intimidate  and ultimately eliminate the effectiveness of the press, excepting that which falls in behind it  like FOX News.

       Trump’s chief advisor, Stephen Bannon was quoted Thursday as accusing the media of not understanding this country, adding  it should keep its mouth shut. 

        What ? They want to eliminate the 1st Amendment of the U.S. Constitution ……freedom of speech, and the press….and go straight to the 2nd Amendment… right to bear arms…?

        Whoa !

…………………………………………………………………………………………..
TAX REFORM

An August 4 – 9  Bloomberg poll of economists reveals 28 of 39 polled expect Congress to pass tax cut legislation by November 2018. Unfortunately this action is not expected to add more than  0.2 percentage points to the GDP, and that growth is forecast  to only slightly exceed  that this year’s 2.1 percent, this forecast coming from 71 economists.  Worse yet, 2019 is projected to fall back to the 2 percent level.
     Right now, it is any one’s guess.
…………………………………………………………………………………………….
DEBT CEILING SHOWDOWN IN SEPTEMBER ? Expect brinkmanship –
a real cliff hanger and lots of scary press about the risk of default. Actually the debt ceiling was reached in March, bills are being paid using accounting tricks (used many times in the past). The bills that would come due and at risk of not being paid if we defaulted are ones already incurred.

……………………………………………………………………………………………...
WAR – North Korea
      Sen. Lindsey Graham says a U.S. military strike of N. Korea is possible
,* that we cannot allow “this madman [Kim Jong-un] to have a missile to hit America.” His Tuesday, Aug 1, interview on the Today Show, follows N. Korea’s ICBM test days ago. Graham also said the Chinese  can stop such an attack. While such a war would take place on North Korean soil, South Korea  would incur huge casualties from N. Korean artillery.
OBSERVATION: Since January, I have warned Trump would put the U.S. on a war footing (see below) for political reasons, namely the mid-terms. Now I am convinced it is front burner because the Meuller investigations are  closing in.  
      Nuclear deterrence has been effective since the 1950s, for the obvious reasons.  The countries with the largest nuclear arsenals  and estimated warheads include United States (7,500), Russia (7,200), France (300), China (250), UK (215), Pakistan (110), India (100),Israel (80).
       The uncertainty of war would JOLT the market, especially if it disrupted  trade alliances. Reportedly, it would only take 33 minutes for a ballistic missile to reach the U.S.. If detonated high over the center of the U.S., it would cause an electromagnetic pulse (EMP) which would shut down “everything”  A-to-Z indefinitely.
………………………………………………………………………………………
WILL TRUMP MOVE SESSIONS to Dept. of Homeland Security *to appease conservatives, and open up the slot of Attorney General for him to pick his replacement who may be able to  and possibly impede Special Counsel Robert Mueller’s investigation, worse yet fire him ?  But Mueller, can only be fired for cause (dereliction of duty, incapacity, conflict of interest, good cause ?(?), violation of Department policy).
       If Trump fires Mueller, it may trigger  the revival of the US Office of the Independent Counsel, which reports to Congress.
       I THINK TRUMP WILL TRY AND WORRY ABOUT THE REPURCUSSIONS LATER.
       When Rosenstein appointed Mueller, he gave him plenty of leeway to investigate ”any links and/or coordination between the Russian government and individuals associated” with Trump’s campaign, but also to examine “any matters that arose or may arise directly from the investigation, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses”
       Wall Street and Congress clearly cannot ignore that, since it really smacks of “consciousness of guilt,”  small wonder why Trump is exploring the possibility of  PARDONING HIMSELF AND FAMILY.  Holy smoke, is this really happening ?
       Portions of this were provided by Businessinsider.com.
………………………………………………………………………………………
GENERAL JOHN KELLY is Trump’s new chief of staff, replacing Reince Priebus, the goal being to establish some stability and discipline in the White House. 
     
I think, “someone” wanted a strong person between  our irrational and unpredictable President and the ability to initiate a nuclear attack on another nation. Reportedly, Trump would not press a red button on  desk (that’s for a diet coke) and it’s not the “football” that follows him everywhere, which a device used to confirm his identity via a “challenge code” with the National Military Command (Pentagon). Reportedly, the launch process involves more than pressing a button, takes several minutes, and  involves consultation with civilian and military officials, but the decision is the president’s. If under attack, the President can respond in seconds.  That’s the REAL REASON for Kelly – in my opinion.

…………………………………………………………………..
TRUMP A DRAFT DODGER ?  General Kelly
was emphatic with his feelings about duty to country recently telling NPR, “Back in my neighborhood in Boston, a working class neighborhood, when you got your draft notice, you went down, and got your draft physical,…if you passed it, you joined the Marine Corps.” 
      President Trump,
Kelly’s boss, responded to the “call” in the 1960’s as the Vietnam War heated up, with 5 deferments from military service.  Yikes !
…………………………………………………………………………………………..
TRUMP – EARLY STAGE DEMENTIA ?  
Don’t know. Clearly he has personality disorder (Narcissism), but the question is being asked more and more with references to speech, use of words, disorientation, irritability, memory loss, late night tweets, confusion, paranoia.

……………………………………………………………………………………
Trump, Bannon Gone By 2019  (my blog 3/21/2017)

………………………………………………………………………..

TRUMP looking for a “Get Out Of Jail Free Card if the Feds close in?”
    Why not, he dodged military service with 5 deferments  during the Vietnam era (1964 – 1970).
     Reportedly, he has asked advisers about his power to pardon family members and himself  relating to Mueller’s investigation.
………………………………………………………………………..

W HAT HAPPENS WHEN THE INVESTIGATION IS COMPLETED ? If the Special Counselor  concludes it is “necessary and appropriate” he is authorized to prosecute federal crimes arising out of the investigation, which he does after submitting a report to the attorney general explaining his reasons.

REASONS NEEDED TO FIRE MUELLER:  Misconduct,  dereliction of duty, incapacity, conflict of interest, good cause (??), violation of Department policies.
WOULD MUELLER BE REPLACED ? Unclear. If the Democrats controlled Congress they could appoint another Special Counselor
…………………………………………………………………………….
  “Connect the Dots.” This investigation is open-ended
       Nigel Farage – President Trump- Jeffrey Sessions – Robert Mercer – Cambridge Analytics – Bannon- Carter Page – Kushner (Jared and Ivanka) – Eric Prince – Donald, Jr.  and Eric Trump – Wilbur Ross –  Michael Cohen – Ezra Cohen Watnick – Michael Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart News – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Jill Stein – Sam Clovis –  Kellyanne and George Conway –Dana Rohrabacher – Bill Browder – Peter W. Smith (deceased: suicide), Paul Behrends – Boris Epshteyn, Ike Kaveladze, and  Russia’s alfa Group – Felix Sater – Rob Goldstone – alfa Group – Emin Agalarov – Sergey Gorkov –  Sergey Kislyak, ambassador to the U.S., Natalia Veselnitskaya all connect directly or indirectly to the Trump/Russia investigation and some have a connection to Brexit, as well.
      According to the “Observer,” Mercer’s Cambridge Analytica was connected with Canada’s AggregateIQ through an intellectual property agreement and worked together on the Brexit referendum. Aggregate is also a data mining company. While Mercer was a big supporter of Trump, there is no known connection between AggregateIQ and Trump’s campaign staff.

       The Palmer Report.com  recently reported that Peter W. Smith (recent suicide) sought to collude with Russian hackers stealing emails from Trump’s opposition while claiming to be working with Michael Flynn.

      The Wall Street Journal  released two articles, one documenting Smith had some kind of recruiting connection with Steve Bannon and Kellyanne Conway. Unfortunately, Smith cannot be contacted to further confirm the story as he died of unknown causes shortly after his disclosure to the Journal.
            Additionally, IMHO, Vice President Mike Pence simply had to be aware of what was happening in the campaign, but is being shielded because he is the second in command if  President Trump is impeached and convicted  or forced to resign. Stephen Miller, Joseph E. Schmitz may be of interest to the FBI for information they possess relating to the FBI investigation.
      According to CNN Politics,  Marc Kasowitz  represented Trump for personal and business matters for years. Worth noting, Kasowitz is defending Russian bank, OJSC Sberbank in U.S. court, as well as a Russian billionaire, Oleg Deripaska, who has close ties with the Kremlin.
       As of July 21, Kasowitz’s is no longer Trump’s personal attorney   
……………………………………………………………………………………………

ROSENSTEIN and MUELLER OUT ?      Who Takes Over ?
       Will President Trump  fire special counsel Robert Mueller Donald Trump, Jr. to impede criminal charges against his son Donald Jr. and stall the investigation of he and his team ?
       As I understand it, he would first have to fire  Rod Rosenstein, Deputy Attorney General –
      
Obviously,  firing Mueller would smack of  “consciousness of guilt,” and could lead to impeachment proceedings by the House, and/or increase pressure for Trump to resign..

      With Rosenstein out of the way,  associate attorney general, Rachel Brand, would take over.  If she resigns, or is fired, Dana Boente, U.S. attorney general for the Eastern District of Virginia would take over.
       I believe this scandal reaches far beyond collusion with Russia to get Trump elected.
…………………………………………………………………..
     REMOVING TRUMP FROM  OFFICE

Can Section 4 of the 25th Amendment, U.S. Constitution – Remove Trump ?
      It’s a stretch. 
The key for his removal is ”that he is unable to discharge the powers and duties of his office.”  Section 4 mentions nothing  that he is unfit, delusional, unbalanced, crazy,  impulsive, irrational, impaired, sociopathic, psychopathic, narcissistic.
      That would be the threshold that would have to be crossed if Trump is removed from office via Section 4 of the 25th Amendment of the U.S. Constitution. There is no precedent

      It isn’t just Democrats, liberals, moderates and reasonable people who find Trump caustic, and dangerous, conservatives like George Will, David Brooks and Ross Douthart are also urging his removal.
      First, there are four ways to get rid of Trump – death, resignation, impeachment and Section 4 of the 25th Amendment.
      The procedure employing the 25th Amendment requires the Vice President and the majority of the cabinet of 15 (8) to vote to remove the president. They would submit their declaration in writing to the President pro tempore ( Sen. Orrin Hatch) and Speaker of the House (Paul Ryan) that the president is unable to discharge the powers and duties of his office, and the Vice President will immediately assume to office as acting president.
      However, the president may contend the move by submitting his own letter to the President pro tempore and Speaker of the House, that he believes he is capable of performing his duties, in which case he will resume the office of presidency.
       The Vice President and Cabinet members may then resubmit their declaration at which point Congress would vote within 48 hours if in session. If not, Congress  will act within 21 days where a two-thirds vote would be required to remove  him.  
………………………………………………………………………
IMPEACHMENT
      A  Consult/Politico poll shows 43% of Americans want Congress to begin procedures for the impeachment of President Trump.

      The U.S. Constitution  enables Congress to remove a president for “treason, bribery, or other high crimes and misdemeanors.” Intitially, the House votes on one or more articles of impeachment- if a majority vote is reached, he is impeached.  BUT, impeachment only means indictment. The Senate holds a trial overseen by the chief justice and Supreme Court. A group of House members serve as prosecutors and the Senate as jurors. If two-thirds of the senators find the president guilty, he is removed from office and the vice president takes over.
…………………………………………………………………………….
 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.

………………………………………………………………………………

George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 
Investor’s first read, is a Game-On Analysis, LLC publication for which George Brooks is sole owner, manager and writer.  Neither Game-On Analysis, LLC, nor George  Brooks  is  registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. References to specific securities should not be construed  as particularized or as investment advice as recommendations that you or any investors purchase or sell these securities on their own account. Readers are expected to assume full responsibility for conducting their own research pursuant to investment in keeping with their tolerance for risk.

 

 

 

 

 

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.