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

By  +Follow June 10, 2014 2:57AM
Tickers Mentioned:


    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.


    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.


    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.



    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.          


Beazer Homes  (BZH)    $19.27

PulteCorp ($PHM) :  $20.23

Toll Brothers (TOL) :  $37.27

KB Homes  (KBH) : : $17.29

DR Horton  (DHI) : $24.61



      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.”


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


MBA Purchase Apps (7:00)

Treasury Budget (2:00)


Jobless Claims (8:30)

Retail Sales (8:30)

Bus. Inventories (10:00)




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. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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Results for BZH
4 Oct 15 05:22:01
$BZH: Wall Street analysts bullish on BZH's earnings growth: http://t.co/m5egeSwGaO http://t.co/kYBKjDc9DE
Large Void Bot
2 Oct 15 07:28:17
10:28 New 52wk Lows: $BZH $FORR $KAMN $LORL
Sleek Money
1 Oct 15 19:36:24
Beazer Homes USA Trading Up 1.7% $BZH http://t.co/MVnS4SLS39
1 Oct 15 19:35:08
$BZH: Beazer Homes USA Trading Up 1.7% (BZH): http://t.co/wjpAfJ3Jd8
Quick Stock Ideas
1 Oct 15 08:17:11
Low P/E Stock Of The Day No. 40: Beazer Homes USA, Inc. http://t.co/TZ8OsgCpr7 $BZH
Seeking Alpha
1 Oct 15 08:17:10
Low P/E Stock Of The Day No. 40: Beazer Homes USA, Inc. http://t.co/YIIZa9jonC $BZH
Sleek Money
1 Oct 15 06:27:17
Beazer Homes USA Sees Strong Trading Volume $BZH http://t.co/ebV2B9gK23
Analyst Actions
30 Sep 15 10:04:01
$BZH: Analyst action by UBS on Beazer Homes USA: http://t.co/mjfywdXrMx http://t.co/56AMfdXeQh
Jack Trader
30 Sep 15 08:19:29
$BZH Beazer Homes USA, Inc. (NYSE:BZH) Analyst Rating Update http://t.co/K0jz5KyC9u
Large Void Bot
30 Sep 15 07:17:16
10:17 New 52wk Lows: $BZH
Top Moving Stocks
30 Sep 15 02:36:29
Zacks Short Term Rating on Beazer Homes USA, Inc. $BZH
John Ablemann
29 Sep 15 10:35:20
$BZH Company Shares of Beazer Homes USA, Inc. (NYSE:BZH) Drops by -6.32% http://t.co/BMfOK60vjY
29 Sep 15 08:33:03
$BZH: Quarterly Earnings Watch: Beazer Homes USA, Inc. (NYSE:BZH): http://t.co/lNgcPSXQYj
29 Sep 15 08:20:18
BZH Stock 13.71 Beazer Homes USA $BZH Hit a 52 week low of 13.30 Closing the day 10:44 at 13.71 -0.10 -0.72% W http://t.co/YnFozMtxC1
Large Void Bot
29 Sep 15 06:41:16
09:41 New 52wk Lows: $BZH $DPG $NRG $TAL $TDW
Thomas Collins
29 Sep 15 06:06:05
$BZH Company Shares of Beazer Homes USA, Inc. (NYSE:BZH) Drops by -6.32% http://t.co/91WQxl3IGN
Peter Bardens
29 Sep 15 06:05:59
$BZH Beazer Homes USA Inc. (BZH) Drops 9.62% on September 28 http://t.co/VkIHoXZt6G
Consumer News
29 Sep 15 05:26:25
Beazer Homes USA Sets New 1-Year Low at $14.05 $BZH http://t.co/5omzGWEizO #acn
Analyst Actions
28 Sep 15 20:07:02
$BZH: Analyst action by UBS on Beazer Homes USA: http://t.co/mjfywdXrMx http://t.co/Y0kNyNaLtw
28 Sep 15 20:07:02
$BZH: Wall Street analysts bullish on BZH's earnings growth: http://t.co/m5egeSwGaO http://t.co/DOyDlTk8It
Chet Malhotra
28 Sep 15 12:31:09
@GrantDossetto @DividendMaster @DougKass @thirdgenwidget Builder CDS Blowing Out...$ITB $XHB $BZH $KBH $LEN $TOL http://t.co/v85YSrm1kN
Grant Dossetto
28 Sep 15 11:29:26
@chet1970 And $BZH was talking about refinancing their junk bonds. Good luck with that now. Should be a penny stock.
Stock Tips
28 Sep 15 10:36:44
mikehowell gave $BZH a STRONG SELL rating - #Overvalued http://t.co/PKlVS7b5Qv
28 Sep 15 10:36:40
mikehowell gave $BZH a STRONG SELL rating & has a 61% success rate w/ a 2.43% return per tip on 812 tips. https://t.co/9pc36srw6D
Chet Malhotra
28 Sep 15 10:13:41
@GrantDossetto ur $BZH in total free fall. http://t.co/dGKFJFto6K
John Ablemann
28 Sep 15 10:05:47
$BZH Company Shares of Beazer Homes USA, Inc. (NYSE:BZH) Drops by -6.32% http://t.co/hMS26KhgA2
Large Void Bot
28 Sep 15 09:47:15
12:47 New 52wk Lows: $BZH
Clair Voight
28 Sep 15 09:46:57
$BZH Beazer Homes USA, Inc. Short Interest Update http://t.co/hOetgFBebd
Jack Trader
28 Sep 15 09:46:48
$BZH Company Shares of Beazer Homes USA, Inc. (NYSE:BZH) Drops by -6.32% http://t.co/fJ3icVrTJq
Market Int Center
28 Sep 15 07:43:37
Beazer Homes USA $BZH Showing Support Near $14.99 ( http://t.co/bIELESMogw )
27 Sep 15 19:30:46
Yesterday We Made $54,000 In Just One Trade More Info Here http://t.co/8WvnrVmkBS .. $BYM $BZH $BZT
Breaking News Now
27 Sep 15 15:09:03
$BZH: Company Shares of Beazer Homes USA, Inc. (NYSE:BZH) Drops by …: http://t.co/yEB2s9hKEK
25 Sep 15 22:12:03
$BZH is rated BUY, 31.5% upside by Wall Street analysts based on average ratings/targets http://t.co/NVNHXgUyEJ http://t.co/NB85OLZspi
Samuel Brown
25 Sep 15 15:37:10
$BZH Zacks Short Term Rating on Beazer Homes USA, Inc. http://t.co/9Agfa3ofXZ
Media Sentiment
25 Sep 15 09:44:59
$BZH received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 286
Market Int Center
25 Sep 15 09:41:41
Beazer Homes USA $BZH Showing Bearish Technicals ( http://t.co/cinPw7Bjbt )
Analyst Actions
25 Sep 15 05:59:03
$BZH: Analyst action by UBS on Beazer Homes USA: http://t.co/mjfywdXrMx http://t.co/zMVI4g11Ni
Penny Stocks Tips
25 Sep 15 02:56:38
Zacks Rating on Beazer Homes USA, Inc. $BZH
Penny Stocks Tips
25 Sep 15 02:56:08
Company Shares of Beazer Homes USA, Inc. $BZH Drops by -1.17%
Penny Stocks Tips
25 Sep 15 02:55:12
Beazer Homes USA, Inc. $BZH Price Target Update
Today Penny Stock
25 Sep 15 02:50:50
Beazer Homes USA, Inc. $BZH Short Interest Update
Today Penny Stock
25 Sep 15 02:50:48
Company Shares of Beazer Homes USA, Inc. $BZH Rally 2.15%
Today Penny Stock
25 Sep 15 02:49:11
Beazer Homes USA Inc $BZH Q3 Results
Today Penny Stock
25 Sep 15 02:46:52
Beazer Homes USA Inc $BZH Q3 Results
Penny Stocks Buzz
25 Sep 15 02:18:10
Will Beazer Homes USA, Inc. $BZH Meet Analyst Targets
Penny Stock Picks
25 Sep 15 01:59:01
Ratings Watch: Beazer Homes USA, Inc. $BZH
24 Sep 15 21:28:02
$BZH: Beazer Homes USA, Inc. Short Interest Update: http://t.co/d6uQIgYegq
By  +Follow June 10, 2014 2:57AM



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