Follow The Money – The “HOT” Money

Investor’s first read – Daily edge before the open
DJIA: 21,467
S&P 500:2,437
Nasdaq  Comp.:6,188
Russell 2000: 1,402
Wednesday, June 21, 2017    9:08 a.m.
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      Yesterday, Senate Majority Leader, Mitch McConnell (R:KY)  announced that a draft of the Senate healthcare reform bill would be available for everyone to see on Thursday.  McConnell plans to move a bill to the floor next week (week of 26th) after getting a cost estimate from the Congressional Budget Office (CBO).
        McConnell is caving to intense pressure by Democrats, some Republicans and the press after attempting to ram it through without the traditional review process. What would we do without  Americans  like this ?
        It is uncertain whether time permits any changes that Democrats or Republicans wish to make.

        Failure to pass a healthcare bill has been a stumbling block to pursuing  the GOP agenda of tax cuts, deregulation and a big spend on infrastructure and/or the military.
         If passed, Congress may proceed to push for tax reform legislation with less pressure to cancel their August recess.

TODAY

        Nasdaq’s high fliers, Facebook (FB), Amazon (AMZN), Apple (AAPL), Microsoft (MAST), Alphabet (GOOG) got crocked two Fridays ago. Two attempts to rebound ran into resistance, raising the possibility that the hot money was exiting the market.
        We have had so many bear market head fakes over the years, that the Street dismisses them as a blip in a never-ending bull market.
         However, when hot money hits the silk, it is a good idea to step out of one’s bull market bubble for a moment, look up and down the street to for trouble.
          The Fed is raising rates even in face of a soft economy, the Street thinks oil has entered a bear market, and this bull market is aging, buoyed by hopes for massive tax cuts, deregulation and a lot of spending on the infrastructure and military.
           Regardless of what the Fed is doing, whether the economy has softened (again), or the behavior of the hot money, it is hopes for a massive stimulus that drives this market.  If that stimulus is delayed too much or becomes a ho-hummer, the Street will bail out, looking to return at a lower level, maybe a much lower level.
       So far, the stimulus is a “GO,” but so often the stock market anticipates major changes, moving up or down to adjust for risk or opportunity.  That’s why it is so important  to watch it closely at this time.

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SUPPORT “today”:DJIA:21,426;S&P 500:2,436; Nasdaq Comp.:6,173
RESISTANCE “today” DJIA:21,503;S&P 500:2,443;Nasdaq Comp.:6,201

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CORPORATE EARNINGS
(updated June 17, 2017)
Factset
      Q1 earnings are projected to increase 14.0%.      Q2 growth  is projected at +6.5 %, Q3 at +7.5%, and Q4 at +12.4%. For 2017 as a whole growth is projected at a plus 9.9%.  Currently, the P/E on forward  earnings is 17.7 x. That compares with a 10-year average P/E of 14.0.
Note: These numbers change frequently.
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MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 6/13/17)
      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 21,951 a more extreme risk is 20,703.Near-term upside potential is 21,418.
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POLITICAL/STOCK MARKET
ROSENSTEIN OUT ?
      Who Takes Over ?
     Expect Rod Rosenstein, Deputy Attorney General – DOJ will  likely be fired or have to recuse himself possibly as soon as this week, odds favor the latter. The real target here would be special counsel, Robert Mueller, who would be fired as a desperation stalling tactic by President Trump ‘if’” Trump can find an attorney general who would fire Mueller.  Trump cannot fire Mueller directly.
      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.

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 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.
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      Yielding to intense pressure from Democrats, some Republicans and the press, Senate Majority Leader, Mitch McConnell (R:KY)  announced yesterday, everyone would see a draft of the Senate healthcare reform bill on Thursday.  The bill will move to the floor next week (week of 26th) after getting a cost estimate from the Congressional Budget Office (CBO).

     Senator McConnell had started the secret  process known as Rule 14, enabling the Senate to bypass standard procedures, including committee hearings and markups, in a desperate attempt to ram a bill  on the replacement of ACA through before the July 4th recess.  Yielding to pressure, McConnell, will release a draft of the bill.
      After eight years and more than 55 attempts to skewer ACA, the Republicans now own the nation’s healthcare bill.
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BREAKING NEWS: TRUMP – OBSTRUCTION OF JUSTICE
       Special counsel, Robert S. Mueller III, has entered into a criminal investigation of President Trump for obstruction of Justice
with Director of National Intelligence, Daniel Coats, NSA head, Mike Rodgers, and his recently departed deputy, Richard Ledgett agreeing to be interviewed last week.
      Reportedly, In March, Trump asked Coats to intervene with FBI director James Comey to curtail its  Russia probe of  former national security adviser Michael Flynn.
       Shortly after, Trump  contacted Coats and Rogers separately, asking them to issue public statements denying collusion between Trump’s campaign and the Russian government. Neither would comply.
       I think collusion regarding influencing the election is only part of something much bigger, like major league money transfers for options on oil investments, real estate holdings, and land deals. That’s why it is taking so much time.
       The investigation is now examining Jared Kushner’s international financial dealings.
      Vice President Pence has retained legal counsel.  Why not ?  He was there in the catbird’s seat during the campaign and afterwards.
      There are so many people who know so much, and they are going to be watching out for number ONE, and that is not Donald Trump.
      HOWEVER, Trump will stop at nothing to preserve his self image – Expect firings, scapegoating,  delaying tactics, and  unscrupulous lawyering.
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“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 and Eric Trump – Wilbur Ross – Jill Stein – Michael Cohen – Ezra Cohen Watnick – Flynn – JD Gordon  –  Christopher Steele – Michael Caputo -Breitbart – Roger Stone – Julian Assange – Paul Manafort – Rick Gates – Russia’s Felix Sater – Sergey Gorkov –  Sergey Kislak, ambassador to the U.S..all connect directly or indirectly to the Trump/Russia investigation and 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.
      Additionally,  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 has 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. 
       WHY SO MANY RUSSIANS ? WHY ALL THESE RUSSIAN CONNECTIONS ?  THIS IS GETTING BIGGER – IMHO THIS WILL BE THE BIGGEST SCANDAL “EVER” AND MAY TAKE YEARS TO FULLY UNWIND.
          Was there a GLOBAL POWER PLAY here ?  Britain, United States, France, Netherlands, Sweden, Italy ?   Who was the puppeteer who were the puppets ?
        The new kid on the FBI “person of interest” block in its US counter-intelligence investigation is Nigel Farage, a Brit, former UK Independence Party (UKIP)  leader and tactician for Brexit. He may be positioned to have a lot of pertinent information about 2016 election tampering. Reportedly, he has had direct or indirect contact with all of the above.  …………………………………………………………………………………..
      President Trump’s budget is obviously DOA, with lots of blowback by Republicans looking to their prospects of re-election in 2018. The budget is a disgrace to who we are as Americans, as it skewers a portion of our society with little ability to defend itself, much less survive.     
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PREUTERS WORLD NEWS APRIL 19, 4:20 PM
“A Russian government think tank controlled by Vladimir Putin developed a plan to swing the 2016 U.S. presidential election to Donald Trump and undermine voters’ faith in the American electoral system, three current and four former U.S. officials told Reuters.
      Russian documents appear to confirm what U.S. intelligence agencies have believed  all along that Russia influenced the outcome of our presidential election. 
      It recommended that a, “propaganda campaign on social media and Russian backed global news outlets to encourage U.S. voters to elect a president who would take a softer line toward Russia than the administration of then-President Barach Obama.
     Additionally, a second institute document recommended Russia end its pro-Trump propaganda and intensify messaging about voter fraud to undermine the U.S. electoral system’s legitimacy and damage Clinton’s reputation.
      So far, investigations by U.S. institutions and Congress have not concluded collusion between Trump’s team and Russian operatives occurred.

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TRUMP TO PUT US  ON  A WAR FOOTING !
      
Expect the Trump administration to put the United States on a war footing within one year, probably regarding North Korea.  For one, it would justify its big military spend. For another, it would facilitate a mid-term election victory, since voters are reluctant to change  Congress significantly when the nation is gearing up for war.. It worked for George Bush in 2003.  Finally, it would deflect attention away from the Trump/Russia issue, that could sink the administration.
ALL OF THE ABOVE HAS THE POTENTIAL TO ADVERSELY IMPACT THE STOCK MARKET  AND   MERITS CONSIDERATION.
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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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