Street Still Hopeful ???

Investor’s first read Daily edge before the open

DJIA: 20,701
S&P 500: 2,358
Nasdaq  Comp.:5,875
Russell 2000:1,367

Wednesday,  March 29, 2017    9:12 a.m.


      The Street is beginning to get nervous about a bombshell announcement about collusion between Trump’s team and Russia to influence the November presidential election in Trump’s favor.

      That, or possibly about the release of information about undisclosed investments in Russia or by Russian investors in Trump properties.

      Nevertheless, hopes of huge tax breaks for corporations and high income individuals continues to drive the Street’s bullishness, even with warnings that the issue is thorny and will take time to pass.   

      As a senior member of the Senate Appropriations committee, Senator Roy Blunt, announced Tuesday that a funding request for Trump’s wall would be put off until later this year, yet another delay in Trump’s massive stimulus.

      The U.K. triggered to Article 50 (Brexit) today officially opting to exit  the European Union.  The process will take more than a year.  While the Brits will hope to have their cake and eat it too, the EU cannot let it go well for them, since France and Italy are considering the same thing.  Brexit was a blunder, just like Trump was a blunder. Both decisions were not thought through logically based on facts.


      A massive stimulus based on tax cuts, deregulation and a big spend on the military and infrastructure  is the drumbeat the Street marches to at this time, as evidenced by the sharp rebound in stock prices Monday and Tuesday.

      Smarting from a defeat on the repeal and replacement of Obamacare last week, and mounting evidence of wrongdoing in Russia, the Trump administration is floundering, suggesting  the stimulus won’t happen on time and may not be as big a deal as hoped for.

      That spells lower prices eventually, but it may take a while to sink in on Wall Street.  Easy does it !  When this market breaks, it will be ugly.               


SUPPORT “today”:DJIA:20,640 ;S&P 500:2,351;Nasdaq Comp.:5,853
RESISTANCE:”today”:DJIA:20,777;S&P500:2,373; NASDAQ Comp.:5,896


CORPORATE EARNINGS (updated  March 3, 2014)


Q1 earnings are projected to increase 9.0%.  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 17.7 x. That compares with a 10-year average P/E of 13.9. 


MY TECHNICAL ANALYSIS  of the 30 DJIA Companies:  (UPDATED 2/13/17)

 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  March 2, 2017,  a reasonable risk is 21,040 a more extreme risk is 20,938 Near-term upside potential is 21,367 .



      Trump tweets, “The failing NY Times would do much better if it were honest.”  Right !   

       It’s called projection.  That’s when a person accuses someone else of that which they are guilty of.  In this case a pathological liar is accusing the NY Times (and everyone else) of being dishonest.

       It astounds me, angers me, when Trump lies.  My first thought is, can’t everyone see the truth, his lies are so obvious ?  But, in reality, Trump supporters really don’t care if he lies, he’s their guy right or wrong, good or bad, honest or dishonest, good guy or jackass.

       How so ?  Didn’t we learn as kids to always tell the truth ? Undoubtedly, Trump supporters learned that, as well, but over time became captive to confirmation bias, where they see only what they want to see, in spite of irrefutable evidence to the contrary.

       So forget about any conversion for most of them, it is not going to happen.  They’re going to stick with him, even vote against their own best interest. Don’t most still think Obama is a Muslim born outside the United States.

       As a country, we have been lucky since the birth of our republic. When asked what kind of government we have, Ben Franklin replied. “A Republic, if you can keep it.”

       We cannot afford confirmation bias, and we cannot afford a blatant liar as our president.  He has no credibility. As a nation, we have no credibility.

        While his base won’t concede, Trump may be brought down by his own ego, as the “Russia situation” seems to worsen daily for President Trump and his chief strategist, Stephen Bannon. Reportedly, the FBI has expanded its investigation of collaboration to Alt-Right Breitbart News, which Bannon used to head up.

      According to Business, Jared Kushner failed to disclose meeting with the CEO, Sergey N. Gorkov, of Vnesheconoombank in December 2016. The bank is Russia’sbank for “Development and Foreign Economic Affairs.  Reportedly, the bank was struggling in face of Russia’s economic woes.  Kushner was seeking investors for a Fifth Avenue office building that is reportedly set to be financed through Anbang Insurance Group, a company with ties to the Chinese government. A White House spokesman denied the New York office project was discussed.

      What then was discussed ?

      What’s worse, CNN’s national security analyst, Juliett Kayyem,  speculates that the FBI has been talking with Mike Flynn, formerly close advisor to Trump.  Flynn was forced to resign when it became apparent he was lying about dealings with Russia.

      The FBI wants to know if Breitbart and INFO Wars, another far right wing site, had a role in  Russian cyber attacks and the spread of fake news, where automated computer commands called “bots” distributed stories to the social media that were pro-Trump and anti-Clinton.

      Generally, a “bot” is designed to automate tasks, bypassing the need to do them manually.    

     The stench of the prospects of a Trump/Russia collusion increases with each disclosure and attempt to change the focus and cover the trail. 

    I still believe Paul Manafort  and Roger Stone hold the key to the puzzle, though Flynn is now in the running.  I think they know whether there was collusion or whether Trump has financial ties to Russia or Russian billionaires, direct or indirect.  Properties somewhere ?  Indirect ownership in oil properties ?  Access to money ? 

      I don’t think this gang expected to win, and as a result got careless and made some bad decisions when Russia came on the scene.



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.

3-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.     


      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.                                                                


Note: Source of weekly economic calendar and good recap of  indicators:


George Brooks
Investor’s first read
A Game-On Analysis, LLC publication


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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