Everything On Hold For Now

Investor’s first read – Daily edge before the open
DJIA: 17,829
S&P 500: 2,088
Nasdaq Comp.:4,843
Russell 2000: 1,153
EARLY RELEASE TODAY (without benefit of new info released immediately prior to the open)
Wednesday, June 22, 2016 8:45 a.m.
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As I thought, yesterday was a wait and see day, in spite of what Fed Chief Yellen said in her appearance before the Senate Banking Committee, which was pretty much what she said after the FOMC meeting – maybe one increase this year. She appears again at 10 o’clock today before the House Financial Services Committee.
While odds makers expect the Brits to stay in the EU in the vote tomorrow, it really looks like it is too close to call.
The U.S. stock market has been discounting a “stay,” up sharply in four days, which suggests the possibility of an upside spike if the stays win.
That is not a spike I would buy.
Yellen’s “new normal” really indicates it won’t be raising rates unless our economy gains traction. That does not assure investors certain Fed governors won’t suggest rates will rise in the near future. A number of Governors have been at odds with Yellon.
We will get a better read after the Brexit vote.
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SUPPORT: “today”: DJIA:17,756; S&P 500:2,077 ; Nasdaq Comp.:4,821 .
RESISTANCE: “today” DJIA:17,919; S&P 500:2,097; Nasdaq Comp.:4,868.
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NEW PROJECTION:
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 June 17, 2016, a reasonable risk is 17,518 a more extreme risk is 17,388. Near-term upside potential is 17,901.Support here is being tested.
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ELECTION YEAR PATTERN BEARISH AFTER MARCH
(I will repeat this regularly to keep readers aware of the potential for an April correction)
The market is tracking a pattern for presidential election years where an administration is in its second term.* The news is bad.
Historically, these markets have declined in Jan./Feb., rallied in March then topped out in early April, plunged in May with brief rallies in June and August and a plunge into October prior to the election.
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 STATUS OF MARKET: Neutral – but very, very vulnerable. Expect volatility
 OPPORTUNITY: RISK: Risk high, Profit taking justified.
 CASH RESERVE: 45%. Consider 75% now if tolerance for risk is low.
 KEY FACTORS: Outlook for Q2, and 2016 earnings questionable. Fed has market under its spell.
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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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