Oil Stock Bear To Be An Opportunity

Investor’s first read – Daily edge before the open
DJIA: 21,410
S&P 500:2,435
Nasdaq  Comp.:6,233
Russell 2000: 1,399
Thursday, June 22, 2017    9:08 a.m.
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         The Senate’s bill to repeal and replace ACA will be released today, though there will be little time for Democrats and Republicans to debate its clauses. It could go to a vote next week.

         Why the rush ?
         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 then proceed to push for tax reform legislation with less pressure to cancel their August recess.
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        Nasdaq’s high fliers, Facebook (FB), Amazon (AMZN), Apple (AAPL), Microsoft (MFST), Alphabet (GOOG) got slammed two Fridays ago, as hot money suddenly decided to lock in profits. This could signal the beginning of a correction (5% – 8%), except the same thing happened in May and March only to be followed by a rebound to new highs.         
        Facebook and Amazon  have recouped most of their loss. Apple’s rebound has  stalled, and Microsoft and Alphabet must hurdle resistance at 71 and 961 respectively to have a shot at new highs.
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         Meanwhile oil stocks are getting hammered. US crude and OECD inventories are high Iran’s production is increasing.
       This group tends to run to extremes on the upside and downside, probably due to wide swings in the price of oil and the press it gets. They should be watched for one of those wipeouts like in January 2016.  Projections for doom can reach unthinkable levels for this group.
TODAY
       The blue chip Dow and S&P 500 gave ground yesterday, but the Nasdaq Comp. held its ground. This has been the hot money’s sandbox, but that may be changing.  Renewed selling in the high fliers along with weakness in oil stocks could trigger a 5% – 8% correction in the market.
      If Congress passes a healthcare bill, regardless of how ugly it is compared to ACA, tax reform and the big spend on the infrastructure are suddenly back  on the table.  That would surely pull buyers back into the market.
       So far, delays in the Trump stimulus have not discouraged buyers – yet.
        While everyone,except  President Trump, was aware of  Russia’s tampering with the 2016 election, it is still unnerving to hear it coming out of official sources.  This is just the beginning.

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SUPPORT “today”:DJIA:21,358;S&P 500:2,427; Nasdaq Comp.:6,217
RESISTANCE “today” DJIA:21,457;S&P 500:2,441;Nasdaq Comp.:6,240

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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
TRIVIA: Donald Trump’s net worth is estimated at $2.9 billion. Vladimir Putin’s net worth is estimated at north of $40 billion, most of it in oil investments.
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 Russian hackers targeted at least 21 US state election-related systems
last year and planted online propaganda in an effort to discredit Democratic candidate, Hillary Clinton.
      Reportedly, there is no evidence of any votes being manipulated.  I don’t believe that, Senator Angus King (I-Maine) has doubts, as well.
      NPR Politics reports Alex Halderman, a computer scientist form the University of Michigan, told the Senate Intelligence Committee Wednesday that our computerized election infrastructure is vulnerable to sabotage  and cyber attacks that could change votes.
       
Official sources would never admit machines can be hacked to flip enough votes from one candidate to another, the best was to rig an election, since one flipped vote has the impact of two votes.
       The election is what it is. If it was rigged in favor of Trump, there is nothing that can be done except prevent a repeat performance.
        Where this gets ugly, or downright dangerous to our constitutional representative republic is, Donald Trump, a narcissist in every sense of the word, is president.
         His dominate MO is divisiveness. He loves to pit one person against another. You are witnessing the dismantling of so many things we have held dear, and so many people gave their life to defend.
         His election was a big mistake, and when you make a big mistake, you will pay a big price.
          Everything this Congress will do will divide the country further – American against American, unless voters show up in November 2018 to stop the carnage.

        According to  a 50-metric survey conducted by U.S.-based, nonprofit “Social Progress Imperative,” the United States leads the  world in access to higher education but lags 17 other countries in health, environmental protection, anti-discrimination.
         What in the Hell are people thinking ?  Feeling ?
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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