Easy Does It !

Investor’s first read – Daily edge before the open
DJIA:18,807
S&P 500: 2,167
Nasdaq Com.:5,208
Russell 2000:1,251
Friday, November 11, 2016 9:11 a.m.
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Regardless of party affiliation or preference, when there is a change in the White House, serious investors have to step back and objectively assess positives and negatives, winners and losers without bias. Tough to do, especially when you have a change as dramatic as the present one.
President-elect Trump has an opportunity to reduce hostilities and foster unity. Tough to do. Most of the Republican Congress wants to dismantle everything President Obama achieved, much of which had to be by executive order, due of Congressional obstruction.
Yesterday, President Obama, assured Mr. Trump, he would do everything possible to help him succeed. Really ?
This is more like two fighters touching gloves before Round One.
While President Obama inherited a billion dollar deficit, and the worst meltdown since the 1930’s, Trump will be inheriting a steady economic recovery, which can serve as a platform for faster growth.
It would be great if everyone could move ahead in harmony, but realistically, it won’t happen.
POLITICS will continue to block progress. Why would the Democrats help Trump & Co. trash ACA, Dodd-Frank, efforts to save the environment, Dept. of Education, foreign policy initiatives ? Then there is the appointment to the Supreme Court.Under Obama, the Republicans refused even to hear of a court vacancy until this year’s election. Why would the Democrats do anything differently ?
Help Donald Trump ? Congress ? Not for a minute. It will be “war.” It has to be, because the Democrats will be targeting the mid-term elections for payback – for survival.
If the roles were reversed, the Republicans would be doing the same thing, in fact, they did it in 2012.
So, all this wishing the other guy/girl well is a crock. These pols hate each other.

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TIMING
Right now, the Street has forgotten it preferred Secretary Clinton and is scrambling to buy “Trump stocks,” drugs, banks, oils, infrastructure stocks, and industries that would benefit from the lifting of regulations.
Bonds are taking a pasting, since the perception is that spending on the infrastructure and the military will increase dramatically, forcing interest rates higher.
The race to capitalize on beneficiaries of a Trump presidency is premature. It will take a year for any legislation to pass on infrastructure spending. What’s more most projects are not “shovel ready,” so why the rush to buy these stocks. Reversing Obama programs won’t be accomplished quickly.
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SUPPORT “today”: DJIA:18,678; S&P 500:2,157; Nasdaq Comp.:5,161
RESISTANCE “today”:DJIA:18,907;S&P 500:2,181; Nasdaq Comp.:5,249.
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THE BEST SIX MONTHS
The six months between November 1 and May 1, tend to outperform the six months between May 1 and November 1, labelled the “Best Six Months” by the Stock Trader’s Almanac which began tracking the pattern in 1986.
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iShares 20-Year Treasury ETF down 14% in 4 months
Long-term bonds have gotten hammered in the last three months. The iShares 20-yr U.S. treasury bond ETF has lost 14.6% since July. That’s nearly 6 times the yield an investor expected over 12 months. Obviously, bonds can be risky. Let’s not forget the name of the game is to buy low and sell high, which applies to long bonds as well as stocks.
A survey of economists reported by Bloomberg yesterday calls for U.S. inflation to surpass the Fed’s target in every quarter of 2017, which if even half true should depress long-term bonds even more.
The Employment Situation report came in Friday, 161,000 jobs were added in October, the unemployment rate was 4.9%.
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MY TECHNICAL ANALYSIS of the 30 DJIA Companies:
On occasion, I technically analyze each of the 30 DJIA stocks for a reasonable risk, a more extreme risk, and an upside potential over the near-term. I add the results of each, then divide by the new DJIA “divisor” (0.14602) to get the DJIA for those levels. This gives me an internal check on the DJIA itself, especially if certain higher priced stocks are distorting the averages.
As of October 21, 2016, a reasonable risk is 18,026 a more extreme risk is 17,986 Near-term upside potential is 18,481.
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 STATUS OF MARKET: Neutral – trending to bullish
 OPPORTUNITY: RISK: Opportunity !
 CASH RESERVE: 25% – 35%.
 KEY FACTORS: Uncertainty of election to be resolved in two days, earnings slide may be over.
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Note: Source of weekly economic calendar and good recap of indicators: mam.econoday.com.
*Stock Trader’s Almanac
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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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