Important Technical Juncture

Investor’s first read Daily edge before the open
DJIA: 20,656
S&P 500: 2,355
Nasdaq  Comp.5,877:
Russell 2000:1,364
Monday, April  10, 2017    9:13 a.m.
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Just about the time it seemed safe to feel the economy was ready for acceleration, we get reasons to have second thoughts.  While the March Employment Situation Report plunged to 78,000 new jobs added, it would have been significantly better without major storms in the northeast.
      One troubling report was motor vehicles, down three straight months. As usual, a rising trade deficit not helped by a strong U.S. Dollar. Monthly trade deficits of $60 billion haven been driven by imports of consumer goods  and oil and a slump in exports of machinery, aircraft and electronics. On a positive note, international demand for U.S. technical and managerial services has been strong.
      So far, only the stock market has reflected optimism for a Trump bump in the economy. 
      Fed talk of unwinding the debt in its portfolio and continuing its plan for two more increases in its benchmark interest rate this year and three in 2018, now seem to give the Street reason to think twice of getting even more aggressive.

      Then too, there are increasing doubts about the effectiveness of the Trump administration in face of a major shakeup at the highest levels and the failure of it to adequately staff secondary levels, primarily in the State Department where only half  the vacancies have been filled after most individuals were forced out when Trump took over.
      Congressional investigations and that by the FBI into possible collusion between the Trump team and Russia to get Trump elected cast a pall over the administration’s credibility.
TODAY
      Looks like a mixed open.  This market lost its momentum in February when it began tracking down. The trend is orderly so far, since the Street still is banking on Trump’s promises of a tax cut, deregulation and a big spend on the military and infrastructure.
       This downtrend could accelerate if doubts rise that this massive stimulus will be seriously delayed, or will fall short of expectations.
The Bulls must bring it now.
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SUPPORT “today”:DJIA:20,601;S&P 500:2,351; Nasdaq Comp.:5,863
RESISTANCE: “today”:DJIA:20,731;S&P500:2,362;NASDAQ Comp.:5,891

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POLITICAL/STOCK MARKET

WHO, ARE WE SEEING A MAJOR CHANG IN THEPOWER STRUCTURE – ALT-RIGHT OUT – GENERALS IN ?
     
The Trump administration is undergoing a major shakeup, with national security adviser General H.R. McMaster and  Secretary of Defense James Mattis stepping in to stabilize an out of control bunch of inexperienced people in high places. Some speculate Trump shifting to a more centrist strategy.
      Steve Bannon’s demotion set a new tone, away from the isolationist, nationalism mindset and possibly back to maintaining military and economic balance, cultivating global strategic relationships to deter China from filling vacuums we would create under the Alt-Right, Ayn Rand approach to self-destruction. 
      Get rid of the Alt-Right influence and we have only to deal with Trump’s arrogance, warped ego and immeasurable lack of qualifications for the job.

Syria Attack Was All About Trump’s 35% Approval Rating          
      It worked ! His approval rating is 40, up from 35. I Have continually warned that Trump would put the U.S. on a war footing to boost patriotic support and his approval rating.  We now have a double-header – Syria last week and now a U.S. Naval strike group is headed toward the Korean peninsula.
       Last week,  Syrian airfield strike with 59 Tomahawk missiles launched from two Destroyers in the Mediterranean Sea was in retaliation for Asaad’s use of Sarin gas on April 4 that killed more than 70 civilians.
      For Trump, this is an about face on intervention in the Mid-East, and the only reason I can see is he expects it to boost his approval ratings.
      In 2013 he urged President Obama not to retaliate against Asaad for his use of nerve agent sarin in 2013 tweeting “Again to our very foolish leader do not attack Syria –If you do many bad things will happen & from that fight the U.S.gets nothing.”  – “The only reason President Obama wants to attack Syria is to save face over his very dumb RED LINE statement. DO NOT attack Syria.” (Sept. 5, 2017).

HOUSE INTELLIGENCE COMMITTEE
       What happened to the hearings ?  Looks like Syria  was yet another distraction, perhaps this one unplanned. Chairman of the House Intelligence Committee, Devin Nunes has temporarily ceded control of  the investigation of pre-election collusion between Russia and the Trump team to Mike Conway of Texas, whining charges by “several left-wing activists” that he made unauthorized disclosures of classified information relative to the investigation.

TRUMP SQUIRMS BUT A WAR FOOTING MAY BAIL HIM OUT
      The more Trump squirms to find a way to divert attention from the main issue demanding resolution, the guiltier he looks.
      The current diversion is Susan Rice who Trump accused of being politically motivated when certain Trump associate were included in a sweep of foreign officials last year by U.S. intelligence agencies. Their identities are usually not revealed, but may be if national security is an issue. To everyone’s surprise, Trump claims in a tweet that Rice committed a crime when certain individuals were “unmasked”. Rice was National Security Advisor to President Obama from 2013 to 2017.

WHY TRUMP WOULD PUT US  ON  A WAR FOOTING !
       THE STAGE IS BEING SET NOW !
      
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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CORPORATE EARNINGS (updated  March 31, 2017)
Factset
      Q1 earnings are projected to increase 8.9%. That compares with a Q1 est. on Dec. 31 of +12.5%.  2017 as a whole are projected at a plus 9.8% down from Dec. 31 estimates of 11.6%.  Currently, the P/E on trailing 12-month earnings is 19.8 x, and based on earnings 12 months out is 17.5 x. That compares with a 10-year average P/E of 14.0. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
MY TECHNICAL ANALYSIS  of the 30 DJIA Companies
:  (UPDATED 3/29/17 and )
      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  March 29, 2017,  a reasonable risk is 20,413 a more extreme risk is 20,196.Near-term upside potential is 21,113
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ODDS FAVOR
1-Trump’s presidency will implode within three years, Bannon will be gone, along with Breitbart News and Alt-Right’ influence.
2-Trump will put the United States on a war footing with North Korea in coming months with or without China’s cooperation.
3-Expect major domestic violence this summer as alt-Right groups confront protestors against tax reform and Congress’ gutting of a host of popular government programs.
4-Seeds of a recession will be planted as Congress guts programs needed and used by millions.  Stock market has its final run.
5-Social Security and Medicare will be targeted for drastic changes if the Republicans hold control of both houses in 2018 and Congress is successful in gutting most of social service programs and the EPA per Trump’s wish list.     
WHY TRUMP WOULD PUT US  ON  A WAR FOOTING !
       THE STAGE IS BEING SET NOW !
      
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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