CRASH ! Not the Market – Our Republic !

Investor’s first read – Daily edge before the open
DJIA: 20,100
S&P 500: 2,296
Nasdaq Comp.:5,655
Russell 2000:1,375
Friday, January 27, 2017 9:03 a.m.
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Barring unexpected bad news, this is the final phase of the Obama bull market. It could last a month or a year depending on progress to slash corporate taxes, gut regulations and pass legislation for a big spend on the military and infrastructure.
This phase has the potential to get wild, so long as nothing gets in the way of the tax cuts, dereg., “spend.” With Republican control of the presidency, Congress and shortly the Supreme Court, all systems look like a “GO.”
Today, we should see another attempt to post a new high. A rally failure would indicate the market needs time to digest recent gains.
A lot depends on Republican unity. Campaigning for the mid-term elections begins in 14 months. President Trump decimated the base of the Republican Party during the primaries, en route to re-branding his own version of a Republican Party. Divisiveness is his M.O..
“If” the core of the party wants to survive, it will have to assert itself or risk losing control of the Senate in 2018 and ultimately the House as I doubt the American voter will support a radical right agenda.
This means the rump platform of huge corporate tax cuts, dereg, and big spend is not going to happen in the size Trump wants.
Failure would adversely impact stock prices.
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Support: DJIA:20,046 ;S&P 500:2,291; Nasdaq Comp.:5,640
RESISTANCE “today”:DJIA:20,146;S&P 500:2,303; Nasdaq Comp.:5,668
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ISSUES TO CONSIDER
– 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
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POLITICAL/STOCK MARKET
It is disturbing that President Trump cannot accept that he lost the popular vote by 2.9million votes. He insists three-to five million illegals gave Clinton that margin. He offers no proof, but if he claims that often enough, the public will believe it. That’s one reason why he repeats it over and over again. The other is so he can believe it himself. Even top Republicans are appalled. SCARY !
WHAT IS HAPPENING NOW IS HISTORIC. UNFORTUNATELY, OUR CONSTITUTIONAL REPUBLIC IS AT RISK IN A POWER GRAB THAT WILL HAVE ITS GREATEST IMPACT ON FREE SPEECH AND DISSENT. WHAT IS HAPPENING IS UN-AMERICAN, WHICH IS LIKELY TO TRIGGER A GROUNDSWELL OF OPPOSITION TO WHAT IS AN ATTEMPT BY THE ALT-RIGHT TO TAKE OVER EVERY ASPECT OF OUR COUNTRY. TIME TO PAY ATTENTION.
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 !
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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.
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MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 6, 2017, a reasonable risk is 19,926 a more extreme risk is 19,879 Near-term upside potential is 20,288.
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 STATUS OF MARKET: bullish
 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.
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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
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George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
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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.

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