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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.

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Results for BZH
Daily Contracts
22 Aug 14 09:17:01
Real-Time feed of company contracts, original agreements and executive updates from Beazer Homes $BZH http://t.co/ciXZ3xjg5e
22 Aug 14 09:15:46
What about $BZH http://t.co/KqXNM4T89G
Market Updater
22 Aug 14 01:08:54
$BZH: Beazer: Back In The Bargain Bin (BZH) http://t.co/N7skUSR8Rr http://t.co/2NZtWWQs7X
Business News Watch
22 Aug 14 00:08:55
$BZH: Q3 2014 Beazer Homes USA Inc. Earnings Release - Before Market Open http://t.co/P9PmRNTz8l http://t.co/uiLnlBdwRk
21 Aug 14 23:14:05
The Top in Twitter About $BZH on 08/22/2014 http://t.co/jxSa2DgrhT
Market Int Center
21 Aug 14 10:39:48
Beazer Homes USA $BZH Trading Near $19.27 Resistance Level ( http://t.co/4xrGfcoR1S )
21 Aug 14 09:15:43
What about $BZH http://t.co/hxi7vGLz6T
21 Aug 14 08:27:55
$AAPL $BZH $DHI A roundup of the technology sector. http://t.co/4bl1WzjSVn
Market Int Center
20 Aug 14 10:22:37
Beazer Homes USA $BZH Trading Near $18.88 Resistance Level ( http://t.co/h5IWBBGE87 )
Market Updater
20 Aug 14 10:09:08
$BZH: [$$] Hit the Buy Button on Beazer Homes http://t.co/q3iuytL6Jm http://t.co/eKB1sm8aqJ
*T.N.G.#(Chel teng)*
20 Aug 14 09:17:30
RT @myrollingstocks: What about $BZH http://t.co/4Hoa5YwCcj
20 Aug 14 09:15:59
What about $BZH http://t.co/4Hoa5YwCcj
20 Aug 14 09:15:35
http://t.co/ioejVXw2Lr Zephyr: home builders continue moving up. $BZH $HOV $SPF: Zephyr http://t.co/sIak770Jx5 http://t.co/ioejVXw2Lr
OTPicks- OnTimePicks
20 Aug 14 09:15:34
http://t.co/giErdXKj9j Zephyr: home builders continue moving up. $BZH $HOV $SPF: Zephyr http://t.co/27VVuYeKHo http://t.co/giErdXKj9j
20 Aug 14 09:15:27
http://t.co/y0P0rvShXL Zephyr: home builders continue moving up. $BZH $HOV $SPF: Zephyr http://t.co/rFuDRbuThx http://t.co/y0P0rvShXL
O T P i c k s . com
20 Aug 14 09:15:24
http://t.co/awZxDQ0zpX Zephyr: home builders continue moving up. $BZH $HOV $SPF: Zephyr http://t.co/K0NyfHNfZA http://t.co/awZxDQ0zpX
20 Aug 14 08:50:24
home builders continue moving up. $BZH $HOV $SPF $ITB
20 Aug 14 05:37:34
@SpoonFedStocks Missed easy entries on all these, got distracted with other work and didn't follow up. $LEN, $TOL, $PHM, $BZH, $KBH, $TMHC
20 Aug 14 05:34:03
Missed picking up some shares on a couple of easy reads... #HomeBuilder stocks a couple weeks ago. $LEN, $TOL, $KBH, $BZH, $PHM
19 Aug 14 09:15:48
What about $BZH http://t.co/elrSbeCmVL
Business News Now
19 Aug 14 09:08:58
$BZH: Beazer Bulldozed By Weak Earnings http://t.co/eHg3vasMqj http://t.co/wOVxAxP00j
Market Int Center
19 Aug 14 07:25:25
Potential Beazer Homes USA $BZH Trade Targets 5.52% Return ( http://t.co/a2YoVyvA0Q )
19 Aug 14 07:12:38
http://t.co/ioejVXw2Lr Zephyr: Home builders strong $HOV $BZH $SPF $HD $ITB $XHB: Zephyr http://t.co/pZYBVuHaA1 http://t.co/ioejVXw2Lr
OTPicks- OnTimePicks
19 Aug 14 07:12:36
http://t.co/giErdXKj9j Zephyr: Home builders strong $HOV $BZH $SPF $HD $ITB $XHB: Zephyr http://t.co/uVtEc9yHCK http://t.co/giErdXKj9j
19 Aug 14 07:12:31
http://t.co/y0P0rvShXL Zephyr: Home builders strong $HOV $BZH $SPF $HD $ITB $XHB: Zephyr http://t.co/Kq8m5woxww http://t.co/y0P0rvShXL
O T P i c k s . com
19 Aug 14 07:12:27
http://t.co/awZxDQ0zpX Zephyr: Home builders strong $HOV $BZH $SPF $HD $ITB $XHB: Zephyr http://t.co/tsjsscdekF http://t.co/awZxDQ0zpX
Companies in News
19 Aug 14 07:09:00
$BZH: Today's Market: New Regulations To Hurt The Housing Market? http://t.co/q40V9JY0js http://t.co/5MhUFXd48e
19 Aug 14 07:05:22
$APT blasting off again, $HOV up 17c, $BZH tearing higher - leaves $CHCI as last one to rip
19 Aug 14 06:52:59
Home builders strong $HOV $BZH $SPF $HD $ITB $XHB
19 Aug 14 06:42:40
$BZH and $HOV ripping again today, sector hot and low floater and peer $CHCI coiled at bottom
Ticker Report
19 Aug 14 03:51:41
Beazer Homes USA Upgraded to “Neutral” by Citigroup Inc. $BZH http://t.co/Q37hY23kep
18 Aug 14 13:09:31
$BZH / @JCapellaCampo http://t.co/NH45NoyCnz
Biz News Pioneer
18 Aug 14 12:08:56
$BZH: Beazer Homes USA Stock Rating Upgraded by Citigroup Inc. (BZH) http://t.co/QRWmUJHetP http://t.co/Apqcw8mWYv
18 Aug 14 11:35:02
Monday Sector Leaders: Vehicle Manufacturers, General Contractors & Builders http://t.co/MvxUMUuckl $WGO $TPH $BZH
18 Aug 14 10:05:33
$ACRX $AMBA $BZH $HK $SGMS autocharts @ http://t.co/kn4mViMgNq
18 Aug 14 09:19:55
RT @SmCapStrategist: Most searched small-cap stocks, Thur Aug 14th - $TOPS $VAPE $SEAS $FREE $AIRM $BZH $DANG $PLUG - More: http://t.co/XBU…
Zubeyr Kamil Açıksar
18 Aug 14 07:50:59
RT @KristenScholer: Housing-related stocks $BZH $HOV $LL $USG among best performers after stronger-than-expected NAHB survey. $ITB +6% from…
Kristen Scholer
18 Aug 14 07:46:13
Housing-related stocks $BZH $HOV $LL $USG among best performers after stronger-than-expected NAHB survey. $ITB +6% from Aug. 1 low.
18 Aug 14 07:04:16
Beazer Homes USA Stock Rating Upgraded by Citigroup Inc. $BZH http://t.co/l72pWYNEjL
18 Aug 14 05:11:51
Will Randow at Citi Upgrades $BZH to a NEUTRAL http://t.co/WQik0FGN9p ...
Financial Headlines
17 Aug 14 18:08:53
$BZH: Q3 2014 Beazer Homes USA Inc. Earnings Release - Before Market Open http://t.co/abW887jMY2 http://t.co/pMtzk9ZfWo
Jacqui hodge
17 Aug 14 17:14:22
@CubbieBears nice! $JAZZ too but more of a long shot off the 50day. What do U think about $HOV, $BZH, $TOL $PHM $LEN-like 2 see them bounce
Tr3ndy Jon
17 Aug 14 12:56:03
RT @SmCapStrategist: Most searched small-cap stocks, Thur Aug 14th - $TOPS $VAPE $SEAS $FREE $AIRM $BZH $DANG $PLUG - More: http://t.co/XBU…
17 Aug 14 06:41:31
Beazer Homes USA Stock Rating Upgraded by Citigroup Inc. $BZH http://t.co/0YoEsZ5fEC
O T P i c k s . com
15 Aug 14 16:03:48
http://t.co/awZxDQ0zpX Zephyr: $BZH Beazer Homes upgraded to Neutral from Sell: Zephyr http://t.co/NkhckEqN4F http://t.co/awZxDQ0zpX
Market Int Center
15 Aug 14 10:37:46
Potential Beazer Homes USA $BZH Trade Targets 10.03% Return ( http://t.co/cTVXQgEbpy )
Bidness Etc
15 Aug 14 08:50:15
Beazer Homes USA stock shows unusual movement http://t.co/sIy7QVQ6Vu $BZH
Market News
15 Aug 14 07:09:03
$BZH: Today's 52-Week Low Club http://t.co/jRxBLvzKxn http://t.co/qWEQyb61pk
US Banking News
15 Aug 14 07:05:38
Citigroup Inc. Upgrades Beazer Homes USA to Neutral $BZH http://t.co/hyAN1kUa7j
US Consumer News
15 Aug 14 06:57:47
Beazer Homes USA upgraded by Citigroup Inc. to neutral. http://t.co/W7D7MhjQct $BZH #BZH
By  +Follow June 10, 2014 2:57AM



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