Everyone Is Bullish ????????????????????????????

Investor’s first read – Daily edge before the open
DJIA: 19,833
S&P 500: 2,249
Nasdaq Com.: 5,438
Russell 2000:1,360
Thursday, December 29, 2016 9:06 a.m.
Only one bull market in 56 years has risen more, the 1990 – 1998 dot- com bull with an S&P 500 gain of 304%. So far, this one has logged in a gain of 241%, a gain of 304% would take the S&P 500 to 2,690 (DJIA: 25,820).
That can happen if Congress lets President Trump have his way, AND divisiveness within the U.S. and the U.S. and other nations does not adversely impact consumer confidence (trade war China).
This corporate windfall looks like a slam-dunk. How can it miss ? The Republicans control 4 key areas of the government – the presidency, both houses of Congress, and shortly, the Supreme Court. Cabinet heads support a complete makeover of all departments they control.
How can they miss ?
At times my contrary thinking instincts lead me astray, but investors must entertain the possibility, as remote as it appears, that a lot can go wrong over the next 12 to 18 months. Bad stuff can happen.
The Mid-East came apart at the seams with the invasion of Iraq. Our European and Asian alliances can do the same if mishandled.
A trade war means that a $9 polo shirt can suddenly cost $12, a $550 computer cost $750.
There is a chance the journey from here to a windfall for corporations through tax cuts, deregulation and large expense appropriations could hit obstacles.
Too much overreach carries risk for Republican control of the U.S. Senate in 2018.
The economy is stable with the potential to heat up, which is what logic says it will do as taxes are slashed and big money spent. That can drive the stock market into the stratosphere, an unprecedented orgy of greedy investors chasing stocks worth a fraction of their real value.
The last thing anyone in the Street expects now another Great Recession, meltdown and bear market. Pick ‘em.

Yes, this is year-end activity, a mishmash that makes little sense, since the buying and selling is more a matter of dressing up portfolios and balancing out option/future positions and gains and losses for tax purposes.
A year ago (December 14), I headlined that odds favor a market top in the first week of January and an 8% – 12% correction. The S&P 500 dropped 13% to January 20.
There can be selling pressure in 2016’s big winners in early January as investors defer taking gains until 2017, but it does not look like a wipeout is likely, unless the BIG money is anticipating trouble for Trump’s plans to cut taxes, lift recs. and dump a lot of money into defense and infrastructure projects.
SUPPORT “today”: DJIA:19,771;S&P 500:2,236; Nasdaq Comp.:5,423
RESISTANCE “today”:DJIA:19,936;S&P 500:2,261; Nasdaq Comp.:5.461 ;
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
 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.
*The Fiscal Times – 12/22/16 – Eric Pianin
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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