Street Starting to Have Doubts

Investor’s first read – Daily edge before the open
DJIA: 20,071
S&P 500: 2,297
Nasdaq Comp.: 5,666
Russell 2000:1,377
Monday, February 6, 2017 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Trump administration is off to a rocky start in its first 14 days in office with an approval rating of 43%, lowest in70 years for any new president in office for two weeks.
Goldman Sachs (GS) is beginning to have second thoughts about a robust extension of the Obama bull market.
Progress on tax cuts and deregulation may not happen a soon as it expected, as the Trump administration is repeatedly stumbling over other priorities relating to immigration, repeal of the ACA, size of support, trade, Mexico, the “wall”, China, Australia, Iran, etc.
Clearly, these two weeks have been disruptive in face of a market that has surged in expectation of economic stimulation via tax cuts deregulation and a huge increase in infrastructure spending.
Repeal of the ACA was easy enough, replacing it is far more difficult. The same will apply to gutting Dodd-Frank.
If the perception on the Street turns from the best of all worlds for the corporate world and Wall Street to years of struggle and disappointing returns, an overvalued market will have to adjust downward to a level that discounts disappointment.
It is too early to conclude the Trump administration will continue to break its pick in a rush to appease its voter base, but a pattern has emerged to suggest we are in for a bumpy ride.
While the Trump administration has control of the Presidency, Congress, and shortly the Supreme Court, it will need support from the Democrats going forward. It won’t get it. In only two weeks, Trump has wasted no time alienating any support his administration had hoped for in addition to long standing allies.
At this rate, this could be an utter disaster, in which case the stock market will be seeking a comfort level at a much lower level.
That’s possible, and regardless of political affiliation, must be acknowledged.
Presently, the Street is hoping for all those goodies promised by this administration. Whether they happen soon enough, or at all, will be reflected in the market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:20,017; S&P 500:2,274 ; Nasdaq Comp.:5,645
RESISTANCE “today”:DJIA:20,129;S&P 500:2,302;Nasdaq Comp.:5,682
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ISSUES TO CONSIDER
– the prospect of big corporate tax cuts, deregulation, a big spend on the military and the infrastructure and the restructuring of long-standing trade agreements.
-the uncertainties of the repeal of Obamacare
-talk of privatization of Medicare and Social Security
-possible undermining of NATO and the European Union
-a trade war of sorts.
-lifting of sanctions on Russia for its incursion in the Crimea and actions in Syria, adding to questions already breached.
-continued internal polarization of America and the possible extension of such to other countries.
-intense economic stimulation by the Trump/Republican Congress stands to trigger a rebound of inflationary pressures forcing the Fed to bump interest rates sooner than expected.
-an increasing erosion of investor confidence in President Trump
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
President Trump cannot boast of his approval rating. At 43%, it is the lowest of any president for the first two weeks ever.
IMHO, this is the most hostile administration in memory, and I go back more than 60 years. Polarization of the Republican and Democrat parties has never been greater, and I believe Trump likes it that way.
In fact, I believe Trump enjoys stoking feelings of fear and anger, not unlike people who love watching dogs or chickens fight to death. I can easily see him giving a the go-ahead to a gladiator in a coliseum to finish off a fallen foe. He loves it. Problem is, he can’t take it, as evidenced by his defensive tweets to criticism and opposition.
That is a dangerous weakness to have in the office of the Presidency of the United States, and could spell trouble for everyone, especially investors.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.4% vs. a Dec.31 est. of 3.0%.. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on earnings 12 months out is 16.9 x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 27, 2017, a reasonable risk is 20,013 a more extreme risk is 19,947 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 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.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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.

Investor’s first read – Daily edge before the open
DJIA: 20,071
S&P 500: 2,297
Nasdaq Comp.: 5,666
Russell 2000:1,377
Monday, February 6, 2017 9:08 a.m.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The Trump administration is off to a rocky start in its first 14 days in office with an approval rating of 43%, lowest in70 years for any new president in office for two weeks.
Goldman Sachs (GS) is beginning to have second thoughts about a robust extension of the Obama bull market.
Progress on tax cuts and deregulation may not happen a soon as it expected, as the Trump administration is repeatedly stumbling over other priorities relating to immigration, repeal of the ACA, size of support, trade, Mexico, the “wall”, China, Australia, Iran, etc.
Clearly, these two weeks have been disruptive in face of a market that has surged in expectation of economic stimulation via tax cuts deregulation and a huge increase in infrastructure spending.
Repeal of the ACA was easy enough, replacing it is far more difficult. The same will apply to gutting Dodd-Frank.
If the perception on the Street turns from the best of all worlds for the corporate world and Wall Street to years of struggle and disappointing returns, an overvalued market will have to adjust downward to a level that discounts disappointment.
It is too early to conclude the Trump administration will continue to break its pick in a rush to appease its voter base, but a pattern has emerged to suggest we are in for a bumpy ride.
While the Trump administration has control of the Presidency, Congress, and shortly the Supreme Court, it will need support from the Democrats going forward. It won’t get it. In only two weeks, Trump has wasted no time alienating any support his administration had hoped for in addition to long standing allies.
At this rate, this could be an utter disaster, in which case the stock market will be seeking a comfort level at a much lower level.
That’s possible, and regardless of political affiliation, must be acknowledged.
Presently, the Street is hoping for all those goodies promised by this administration. Whether they happen soon enough, or at all, will be reflected in the market.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
SUPPORT “today”: DJIA:20,017; S&P 500:2,274 ; Nasdaq Comp.:5,645
RESISTANCE “today”:DJIA:20,129;S&P 500:2,302;Nasdaq Comp.:5,682
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
ISSUES TO CONSIDER
– the prospect of big corporate tax cuts, deregulation, a big spend on the military and the infrastructure and the restructuring of long-standing trade agreements.
-the uncertainties of the repeal of Obamacare
-talk of privatization of Medicare and Social Security
-possible undermining of NATO and the European Union
-a trade war of sorts.
-lifting of sanctions on Russia for its incursion in the Crimea and actions in Syria, adding to questions already breached.
-continued internal polarization of America and the possible extension of such to other countries.
-intense economic stimulation by the Trump/Republican Congress stands to trigger a rebound of inflationary pressures forcing the Fed to bump interest rates sooner than expected.
-an increasing erosion of investor confidence in President Trump
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
POLITICAL/STOCK MARKET
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
President Trump cannot boast of his approval rating. At 43%, it is the lowest of any president for the first two weeks ever.
IMHO, this is the most hostile administration in memory, and I go back more than 60 years. Polarization of the Republican and Democrat parties has never been greater, and I believe Trump likes it that way.
In fact, I believe Trump enjoys stoking feelings of fear and anger, not unlike people who love watching dogs or chickens fight to death. I can easily see him giving a the go-ahead to a gladiator in a coliseum to finish off a fallen foe. He loves it. Problem is, he can’t take it, as evidenced by his defensive tweets to criticism and opposition.
That is a dangerous weakness to have in the office of the Presidency of the United States, and could spell trouble for everyone, especially investors.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Corporate earnings (update)
Factset now sees Q4 earnings for the S&P 500 up 3.4% vs. a Dec.31 est. of 3.0%.. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on earnings 12 months out is 16.9 x, which compares with a 10-year average P/E of 14.4 and a 5-year P/E of 15.1.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.
MY TECHNICAL ANALYSIS of the 30 DJIA Companies: (UPDATE)
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 January 27, 2017, a reasonable risk is 20,013 a more extreme risk is 19,947 Near-term upside potential is 20,288.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
 STATUS OF MARKET: bullish
 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.
…………………………………………………………………….
George Brooks
Investor’s first read
A Game-On Analysis, LLC publication
Brooks007read@aol.com
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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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