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Greed/Fear Ratio, Not P/Es, Drive Stock Prices

By  +Follow June 10, 2014 2:57AM
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SUMMARY:

    I sense some nervousness in the Street about the level of stock prices. I have been uneasy for a number of days, since I felt a major upward extension of the rally that started in April needed a robust rebound in the economy this spring, not just a good one.

    I see references to historic price/earnings ratios with conclusions based on current stock prices being above an average going back they don’t say how far. Averages can be worthless, or distorted at best, it all depends on the years covered and the events that impacted them. This is the kind of stuff  money managers feed computers who make their decisions for them.

    At extremes, P/Es signal opportunity to buy or sell, but their enormous range between high and low over the years reduces the credibility of an average significantly.

    The level of P/Es is a product of human emotions, greed and fear. While stock prices have soared over the last five years, I believe the greed/fear ratio is somewhere in the middle of extreme high and low.

    This market is not yet generating the overwhelming compulsion to buy stocks and especially to buy ridiculously over-priced stocks.  Actually, the extremes of the Greed/Fear ratio is not so much quantifiable as it is a matter of opinion, a well-seasoned sense of investors’ behavior.

    While some see P/Es  as high now, I don’t see the Greed/Fear ratio as high.

    Corrections – YES.   Bear market – NO.

TODAY:  

    Odds favor a small correction at the open can reverse with a healthy gain for the day.

Support today is DJIA 16,876; S&P 500: 1,943; Nasdaq Comp.: 4,316

Resistance today is still  DJIA: 17,015; S&P 500: 1,959; Nasdaq Comp.: 4,341.

Investor’s first readDaily edge before the open

DJIA:  16,943

S&P 500:  1,951

Nasdaq  Comp.: 4,336

Russell 2000:    1,175

Tuesday,  June  10, 2014      9:15 a.m.

EUROPE:

    The European Central Bank’s cut of its benchmark interest rate and announcement to employ additional measures to stimulate European economies stands to help the U.S. economy, as well. It did little to boost stock markets abroad which are trading at six-year highs, suggesting the move was already discounted. Even so, let’s consider it a  positive.

 

TECHNICAL ANALYSIS of 30 DOW JONES INDUSTRIALS

    At key junctures, I technically analyze each of the 30 Dow industrials seeking a reasonable near-term support and short-term resistance level. By technically studying the balances of buying and selling in each stock, then converting that data back to the DJIA using the “divisor” (0.1557159) I can get a better reading on the average itself.  The DJIA is a price-weighted average and subject to distortion by higher priced issues.

    As of June 9, the support for this  calculation is 16,801 and resistance is 17,176.

Note: My daily support/resistance levels are more short-term oriented.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

HOUSING: Objective accomplished – will discontinue coverage

     I began to track the following housing stocks earlier this year, hoping to gain some insight into the strength of the economic recovery emerging from a severe winter.

    My reasoning was that a robust economic recovery cannot develop without a contribution from the housing sector.

    While the industry stats for housing lagged, the stocks rebounded in late May and to-date in June.

    Monday, PHM, KBH and DHI extended breakouts from consolidation patterns, TOL broke out of one, and BZH demonstrated strength within a consolidation pattern.          

    PARTIAL LIST :

Beazer Homes  (BZH)    $19.27

PulteCorp ($PHM) :  $20.23

Toll Brothers (TOL) :  $37.27

KB Homes  (KBH) : : $17.29

DR Horton  (DHI) : $24.61

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

THIS WEEK’s ECONOMIC REPORTS:

      For detailed analysis of both the U.S. and Foreign economies along with charts, go to www.mam.econoday.com. Also included is an explanation of each indicator. If you want to know when the next Employment report or any other key report will be released that info is also there under “event release date.”

TUESDAY:

NFIB Small Bus. Optimism Ix. (7:30): May index up to 96.6 from 95.2

ICSC Goldman Store Sales (7:45) Sales down 2.8 pct. in June 7 week from a gain of 2.9 pct. the prior week.  Year/year  now +3.0 pct. vs +3.1 pct.

JOLTS (10:00) Job Openings/Labor Turnover

WEDNESDAY:

MBA Purchase Apps (7:00)

Treasury Budget (2:00)

THURSDAY:

Jobless Claims (8:30)

Retail Sales (8:30)

Bus. Inventories (10:00)

FRIDAY:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

RECENT POSTS:

June 2    DJIA   16,717 Decision Time for Stocks ?

June 3    DJIA   16,743 Economy “Must” Accelerate,  or…

June 4    DJIA   16,722 Correction in Stocks Without Robust Economic Rebound

June 5    DJIA   16,737 Bulls Must Pick It Up, or Lose the Ball

June 6    DJIA   16,836 Easy Does It ! Dow 20,000, But Not in Straight Line

June 9    DJIA   16,924 Stock Market Breakout – Now What ?

A Game-On Analysis,  LLC publication

George  Brooks

“Investor’s first read – a daily edge before the open”

This email address is being protected from spambots. You need JavaScript enabled to view it.

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 investment advice or 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 decisions in keeping with their tolerance for risk.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for BZH
Eric
31 Jan 15 21:12:30
$bzh $grub $sfly $five--> small cap stocks with a bearish look
Financial Skeptic
31 Jan 15 11:53:16
Beazer Homes USA announces earnings. ($0.68) EPS. Misses estimates. $265.80m revenue. http://t.co/u3BfTFnQJ9 $BZH #BZH via @RatingsNetwork
$Stocknewsalerts
31 Jan 15 05:02:39
$BZH Beazer Homes Hosts 'Welcome Home' National Sales Event February 1st-February 15th, 2015 From our Stock News Alerts App
NASDAQ
31 Jan 15 05:00:25
$BZH - Beazer Homes Hosts ‘Welcome Home’ National Sales Event February 1st-February 15th, 2015 http://t.co/iua87GfvHK
Stocks News&Markets
31 Jan 15 05:00:24
$BZH - Beazer Homes Hosts ‘Welcome Home’ National Sales Event February 1st-February 15th, 2015 http://t.co/yn0Phh9q75
InterCooler
30 Jan 15 22:33:17
Beazer Homes USA Trading Down 8.8% After Earnings Miss $BZH http://t.co/LleD6otbYR
ProTradersNews
30 Jan 15 22:31:03
$BZH: Beazer Homes USA Trading Down 8.8% After Earnings Miss (BZH): http://t.co/8F38bHnn3V
361 Capital
30 Jan 15 14:48:05
Mixed earnings day. Earnings Stocks ↑: $AMZN $MAN $SYNA $BIIB $GOOG $EMN $V. ↓: $GDOT $DECK $BZH $PCAR $ABBV $BCR
Breaking News
30 Jan 15 13:52:08
$BZH: New SEC Filing for BZH: Form 10-Q, No. 0000915840-15-000006 http://t.co/yQJKfTkjCp http://t.co/2sYBx3qbZj
BV Industrial
30 Jan 15 13:52:03
$BZH Beazer Homes Usa Inc files Form 10-Q (Quarterly Reports) SEC Filing.. http://t.co/hbXp4FVPFQ
$Stocknewsalerts
30 Jan 15 13:51:21
$BZH ALERT: New Beazer Homes USA Inc. SEC Filing From our Stock News Alerts App
Stocks News&Markets
30 Jan 15 13:50:44
$BZH - Quarterly Report (10-q) http://t.co/Hq4kcGWCsq
Analyst Ratings
30 Jan 15 13:22:27
Beazer Homes Receives a Buy from Compass Point $BZH http://t.co/zm1i8ln1ks
ProVesting
30 Jan 15 12:41:03
$BZH: Beazer Homes USA Price Target Cut to $19.00 by Analysts at ...: http://t.co/UdUQH41Uhz
US Banking News
30 Jan 15 12:33:29
Beazer Homes USA PT Lowered to $19.00 $BZH http://t.co/moDZ4mb2SU
ProVesting
30 Jan 15 12:21:04
$BZH: Compass Point Trims Beazer Homes USA Target Price to $19.00 ...: http://t.co/zd6LNqQGN3
Ticker Report
30 Jan 15 12:17:00
Compass Point Trims Beazer Homes USA Target Price to $19.00 $BZH http://t.co/LPhYkzOhZh
US Consumer News
30 Jan 15 12:14:33
Beazer Homes USA's PT cut by Compass Point to $19.00. buy rating. http://t.co/TKxn0tEnSX $BZH #BZH
Analyst Ratings
30 Jan 15 12:14:30
Beazer Homes USA's PT cut by Compass Point to $19.00. buy rating. http://t.co/Q357ps2yLA $BZH #BZH
Phil Brown
30 Jan 15 12:04:29
@KeithMcCullough Make that $BZH.
Ticker Report
30 Jan 15 11:56:11
Beazer Homes USA Shares Down 8.8% After Earnings Miss $BZH http://t.co/BPt6JaxZN6
Market Int Center
30 Jan 15 11:55:08
Beazer Homes USA $BZH Trading Near $16.34 Support Level ( http://t.co/5nQC3TojTO )
Grant Dossetto
30 Jan 15 11:49:01
@alsabogal $BZH is heading for bankruptcy next year. Bleeding cash and all but admitted that the market won't let them refinance. Ugly.
Al Sabogal
30 Jan 15 11:45:21
$BZH earnings and $PHM downgrade raining on the homebuilders parade after monster day yesterday
ProTradersNews
30 Jan 15 10:51:06
$BZH: Beazer Homes USA Trading Down 8.8% on Disappointing Earnings ...: http://t.co/O7SEJbptpC
unrealTAKEDA
30 Jan 15 10:06:29
$BZH puking camel formation lol
Joseph Lizyness
30 Jan 15 09:21:58
RT @T3TradingMiami: Stocks Open Down In Weak Trade; Biogen, Visa Soar On Q4 Results http://t.co/RX1VIF0Gb7 $AMZN $GOOGL $BRCM $XRX $BIIB $V…
John Gavin
30 Jan 15 08:52:50
Beazer Homes misses earnings but stays silent on a confirmed & undisclosed SEC investigation in the background. http://t.co/D8wZRCCzma $BZH
Kris Hudson
30 Jan 15 08:46:30
#Beazer Homes loss widens amid warranty charge $BZH http://t.co/flyacrPNlH via @WSJ
iStockAnalyst
30 Jan 15 08:26:58
The Only Homebuilders To Own Right Now $BZH $DHI $LEN $MDC $PHM: Now is the time to invest in the housing mark... http://t.co/DsxC6P05ZU
T3TradingMiami
30 Jan 15 08:20:21
Stocks Open Down In Weak Trade; Biogen, Visa Soar On Q4 Results http://t.co/RX1VIF0Gb7 $AMZN $GOOGL $BRCM $XRX $BIIB $V $GSPC $DJI $BZH $SPY
ProVesting
30 Jan 15 08:06:06
$BZH: Update: Beazer Homes USA, Inc. Short Interest Disclosure: http://t.co/uP341ZVmK7
The Legacy News
30 Jan 15 07:42:11
Beazer Homes USA $BZH Issues Quarterly Earnings Results http://t.co/b9CgcjVRKI
ProVesting
30 Jan 15 07:41:06
$BZH: Beazer Homes USA (BZH) Issues Quarterly Earnings Results: http://t.co/lr91mUdBVz
wilma miles
30 Jan 15 07:13:51
RT @probesreporter: Any connection between the earnings miss and that on-going - and undisclosed - SEC probe we recently confirmed? $BZH ht…
John Gavin
30 Jan 15 06:42:16
RT @probesreporter: Any connection between the earnings miss and that on-going - and undisclosed - SEC probe we recently confirmed? $BZH ht…
Probes Reporter™
30 Jan 15 06:40:20
Any connection between the earnings miss and that on-going - and undisclosed - SEC probe we recently confirmed? $BZH http://t.co/ecWxrGwzEH
Large Void Bot
30 Jan 15 06:30:02
Conference call: (09:30): $BZH -- Beazer Homes USA Inc Earnings (Q1 2015)
Seeking Alpha
30 Jan 15 06:25:08
Beazer Homes USA (BZH) Q1 2015 Results - Earnings Call Webcast http://t.co/g5mtmSBahk $BZH
EarningsCast
30 Jan 15 06:24:47
Listen to $BZH Q1 2015 earnings call - live at 09:30 AM, ondemand after - http://t.co/l7uuR0zg08
US Banking News
30 Jan 15 06:11:13
Beazer Homes USA $BZH Announces Quarterly Earnings Results, Misses Expectations By $0.52 EPS http://t.co/AP8lRvRGPH
Instrumental Data
30 Jan 15 05:51:10
BEAZER HOMES USA INC $BZH 8-K now available
$Stocknewsalerts
30 Jan 15 05:43:48
$BZH ALERT: New Beazer Homes USA Inc. SEC Filing From our Stock News Alerts App
NASDAQ
30 Jan 15 05:43:06
$BZH - Current Report Filing (8-k) http://t.co/9Y1SbuYrBF
Stocks News&Markets
30 Jan 15 05:43:05
$BZH - Current Report Filing (8-k) http://t.co/LUSmXX6SdZ
BV Industrial
30 Jan 15 05:41:10
$BZH Beazer Homes Usa Inc files Form 8-K (Events or Changes Between Quarterly Reports) SEC Filing.. http://t.co/QJFKTYh3zf
OMAR  STOCKTRADER
30 Jan 15 05:40:46
$BZH: Beazer Homes misses Q1 estimates; on track to meet 2016 goals http://t.co/tIwUBu7frb”
Breaking News Now
30 Jan 15 05:40:03
$BZH: New SEC Filing for BZH: Form 8-K, No. 0000915840-15-000003 http://t.co/YUPGHUUfGk http://t.co/fss495Wimz
Briefing.com
30 Jan 15 05:39:15
$BZH: Beazer Homes misses Q1 estimates; on track to meet 2016 goals http://t.co/E7tUa3f1FK
Kris Hudson
30 Jan 15 05:36:09
.@BeazerHomes Q4 orders 966, up 7.9% frm yr ago; closings 885, down 14.7%; rev $261,6M, down 9.8%; avg close price $295.6K, up 5.8%. $BZH
				
				
By  +Follow June 10, 2014 2:57AM
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