What If the Supreme Court Rules Against ACA Subsidies ?

Investor’s first readDaily edge before the open

DJIA: 17,935
S&P 500: 2,100
Nasdaq  Comp.: 5,064:
Russell 2000: 1,269

Thursday, June 18, 2015   9:03 a.m.

SUMMARY

      A consideration which may not be  factored into the present psyc of the market is what happens if the Supreme Court decides people in 34 states cannot continue to receive Obamacare healthcare  insurance subsidies ?

      Better google this one, but not at bedtime if you live in one of the 34 states and are signed up for ACA insurance.

      The negative consequences of  a ruling against subsidies stands to be significant and so hard to gauge that the market could take a beating.

      Congress and affected states would have to scramble to lighten the impact maybe even set up their own exchanges.

 THE FED

      Not much was gained by bulls or bears yesterday as Fed Chief Janet Yellen outlined the Fed’s current  position without saying anything in particular.

        I think the Street became addicted the Fed teet a long time ago, and doesn’t know anything else.  It’s so confused, it no longer knows whether good economic news is good or is bad.   It awaits these Fed news conferences, like a 5 year-old waiting for Santa.

GREECE

     While Greece’s woes have been a drag, a settlement would remove lift a lid of uncertainty over the market. Default would roil international markets.
TODAY

The intense volatility over the last four months with abrupt surges and plunges in the market has served as  a corrective process, but more so it represents the potential for  a “top” formation or  a “base” formation for a big move one way or the other..

RESISTANCE today is:  DJIA: 18,026; S&P 500: 2,109 ; Nasdaq Comp.:5,086 

MINOR SUPPORT today is:  DJIA: 17,886 ; S&P 500:2,097; Nasdaq Comp.:5,056.

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QUESTION:   Will people be able to think independently 20 years from now, or will they have to ask a hand-held computer for the answer ?  Then too, who posts the info they are accessing ? Final question:  If a tree falls in the forest, does a hand held computer hear it ?

    I am far from the smartest person in the country, city, on my block, or in my home, but don’t take over my ability to think things through.

    Think about it (if you haven’t already surrendered that option), where is this going ?

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TRADING RANGE

     The four month trading range intact since February is (DJIA: 17,600 to 18,300; S&P 500: 2,040 to 2,130; Nasdaq Comp.: 4,856 to 5,100).

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ALERTALERTALERT, etc.

     The six months period between Nov. 1 and May 1 has historically been the best six months for the stock market.* The six months between May 1 and Nov. 1 has underperformed. Consistent as this seasonal pattern has been, it must be noted that opportunities to trade against these trends have occurred often.  Analysts and the press will make a lot of noise about this phenom in coming months –  be careful.

     The DJIA and S&P 500 are unchanged since April 30.
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My Technical Analysis of the 30 DJIA Companies:  

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 DJIA “divisor” (0.1498588) to get the DJIA for those levels.
     As of  June 5, a reasonable risk is 17,763; a more extreme risk is 17,556 The upside potential is has dropped with the market’s inability to follow through last week and is now 18,160.

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RECOMMENDATION:  InvesTech Research is the finest advisory I have tracked in more than 30 years.  Plain talk, but solidly based indicators, great historical data to back positions.  Monthly, 8 pages, $295/year, worth every penny. Ask for copy (406)862-7777

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KEY EXTERNAL FACTORS: 

-Stock market bubble – China
Q2 earnings for some companies will suffer from U.S. dollar’s strength and plunge in oil prices.
-Market still keyed on the Fed and it’s first bump up in interest rates, which with a slight softening in recent economic reports looks like it may happen later rather than sooner.
Recent strength in employment and housing industry shifting concern from a weakening in the U.S. economy to enough strength to prompt an early bump up in interest rates.

-Greece

Note: Source of economic data

For a weekly economic calendar and good recap of  indicators, go to mam.econoday.com.

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*Stock Trader’s Almanac

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

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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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