Trump – a Human Wrecking Ball ?

Investor’s first read – Daily edge before the open
DJIA: 19,762
S&P 500: 2,238
Nasdaq Com.: 5,363
Russell 2000:1,357
Tuesday, January 3, 2017 9:06 a.m.
To a great extent, buy/sell/hold decisions on Wall Street are made by computers programmed with what analysts and quants believe will produce investment gains under all circumstances.
I’m one of the few writer/analysts left in this business (55years), so I may be slow to surrender my brain to an algorithm, but I still believe the human brain is the world’s greatest computer – slower, but used right, better able to factor in all the variables that go into setting values for the stock market as a whole.
I expect the computer to view a Trump presidency as a big positive – lower taxes, less regulation and big spending.
Well that makes sense, and I can see higher prices “if” this do nothing Congress goes along with his wishes.
I don’t think the algos are aware of the danger of a Trump presidency.
Any one who is able to mentally and emotionally process information objectively, accurately and without bias has to conclude Trump is the most dangerous person to ever hold the office of our presidency.
The establishment, maddening, skewed, and unfair as it can be, is what it is for a reason, it is what the majority gravitate to in search of a comfort zone.
Tweak it, jostle it, but DO NOT dismantle it, or chaos and dysfunction far worse than anything we have seen will result, you simply can’t put humpty dumpty back together again after this kind of fall.
I would not be concerned with a Kasich, Bush, Rubio, or Paul presidency, but Trump is a mistake, as so many leading economists, pols, educators, military leaders, Christians, scientists and world leaders will attest.
I cannot believe the really, really BIG money will want to risk losing their very comfortable, safe position in life, to risk the same for their families, children, grandchildren to have this human wrecking ball destroy what they have, have built in their lifetime.
I don’t think he will be in office two years from now. Congress will have to remove him.
Republicans can’t claim victory, he has destroyed their core. The Democrats are totally shut out, and independents never really had a seat at the table.
That is what we are dealing with. This is what the quants can’t program in their computers. They can create their own gains with persistent buying, but will get crushed in the end.
There is room to run until the BIG money decides to pull the plug. That can be at a much, mush higher level or it could be within a day or two.
Bear in mind, the Street is envisioning a feast, a smorgasbord of investment opportunities driven by tax cuts, dereg. and an untethered spending spree.
The Street can push stocks to levels not seen since the dot-com days, well beyond time tested yardsticks of value seen today that indicate the market is as overvalued as it was in 2007.
A bear market will follow. How big depends what hits it as it is trying to rebound.
When ? Sorry, I don’t know. I will probably ease toward the exit well ahead of the peak. Always leave some scraps on the table for someone else.
If I am wrong, then I pay a price for being wrong. If right, hopefully I save readers from financial ruin, even from the pain a tactless that an egomaniac will bring.
The market looks higher at the open. Be aware the buying here will have to offset the selling by investors putting gains into 2017 in hopes of getting a tax break.
There is a 40% chance the market will peak within several days. Common sense says, the euphoria will persist until Congress shows its hand. Republican controlled is no guarantee it will rubber stamp everything Trump wants. He destroyed their core and is intent on forming his own party, a private party.
SUPPORT “today”: DJIA:19,661;S&P 500:2,228; Nasdaq Comp.:5,356
RESISTANCE “today”:DJIA:20,117;S&P 500:2,278; Nasdaq Comp.:5,392.
Corporate earnings.
Factset now sees Q3 earnings for the S&P 500 up 3.0%. On Sept. 30, its projection was for a decline of 2.2%. Q4 is projected at a gain of 5.2%, the year projected to come in at plus 0.1%. Earnings for 2017 are expected to increase 11.4%. Currently, the P/E based on 12 months out is 17.1x, which compares with a 10-year average P/E of 14.3x.
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 December 14, a reasonable risk is 19,713 a more extreme risk is 19,657 Near-term upside potential is 20,123
 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:
*The Fiscal Times – 12/22/16 – Eric Pianin
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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