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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
Seeking Alpha - All
21 Nov 14 11:47:19
October Existing Home Sales Were Driven By Flippers http://t.co/D2sXsTrYFA $BZH $DHI $KBH $LEN $PHM $RYL $TOL
Stockguy22University
21 Nov 14 09:52:23
RT @stockguy22: http://t.co/VrmydfZJGE look at some of the nice charts & recoveries on the Builders the past month $LEN $DHI $HOV $PHM $BZH…
Stockguy22University
21 Nov 14 09:52:18
RT @stockguy22: $TOL back over 200day sma today .. holding well over $35 .. #Builders have had nice action past month $LEN $HOV $PHM $BZH …
Stockguy22
21 Nov 14 09:52:11
http://t.co/VrmydfZJGE look at some of the nice charts & recoveries on the Builders the past month $LEN $DHI $HOV $PHM $BZH $TMHC etc
Stockguy22
21 Nov 14 09:50:11
$TOL back over 200day sma today .. holding well over $35 .. #Builders have had nice action past month $LEN $HOV $PHM $BZH $TMHC $DHI etc.
Kevin Lewis
21 Nov 14 09:20:05
$BZH now in the red
12Stocks.com
21 Nov 14 08:53:57
SmallCap #Stocks Trend $AGIO $JACK $MTSI $OPLK $DCT $DRH $BZH $LPX $XON $ERII $MTG $BIOL $LIOX $MGNX more@ http://t.co/GiravokQod
Media Sentiment
21 Nov 14 05:25:13
$BZH received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 99
Market Int Center
21 Nov 14 05:22:50
Beazer Homes USA $BZH Showing Bullish Technicals With Resistance At $20.87 ( http://t.co/pHXMVTKc0n )
chartguy89
20 Nov 14 20:47:58
BZH 19.95 Beazer Homes USA Stock Charts $BZH Last Updated: 11/20/14 Last price: 19.95 Total volume: 713,579 BZ http://t.co/gdjGmFR1In
chartguy89
20 Nov 14 20:47:40
$BZH BZH 19.95 Beazer Homes USA Stock Charts $BZH Last Updated: 11/20/14 Last price: 19.95 Total volume: 713,579 BZ http://t.co/nOXhoIylG3
Jake13
20 Nov 14 20:47:10
BZH Year to date has changed -18.30% percent. +12.90% in the last 30 days. $BZH Beazer Homes USA Full breakdow http://t.co/SMHWGpnAFF
Jake13
20 Nov 14 20:46:48
$BZH BZH Year to date has changed -18.30% percent. +12.90% in the last 30 days. $BZH Beazer Homes USA Full breakdow http://t.co/fNM9xH2wqI
Michael Bull, Host
20 Nov 14 17:11:52
RT @AtlBizChron: .@BeazerHomes swings to $34.4 million profit in fiscal 2014 http://t.co/72W3XhyFbj $BZH #earnings http://t.co/v3pl6K15wO
Media Sentiment
20 Nov 14 08:44:48
$BZH received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 267
Market Int Center
20 Nov 14 08:42:31
Beazer Homes USA $BZH Showing Bullish Technicals With Support At $19.06 ( http://t.co/mRihHF7uyZ )
OTPicks.com
20 Nov 14 08:36:01
http://t.co/WZ6FGvJQNb Zephyr: $BZH over $20 home builders showing strength today: Zephyr http://t.co/IimCMP19gw http://t.co/WZ6FGvJQNb
OTPicks- OnTimePicks
20 Nov 14 08:35:58
http://t.co/f15mUdD9Cd Zephyr: $BZH over $20 home builders showing strength today: Zephyr http://t.co/YJ7b64W08w http://t.co/f15mUdD9Cd
OTPicks.com
20 Nov 14 08:35:52
http://t.co/y0P0rwqW7P Zephyr: $BZH over $20 home builders showing strength today: Zephyr http://t.co/4DuWwsoVwM http://t.co/y0P0rwqW7P
O T P i c k s . com
20 Nov 14 08:35:47
http://t.co/x5EzijWmSl Zephyr: $BZH over $20 home builders showing strength today: Zephyr http://t.co/mV8jIgDI1n http://t.co/x5EzijWmSl
Zephyr
20 Nov 14 08:09:24
$BZH over $20 home builders showing strength today $HOV $SPF $ITB
Markos Kaminis
20 Nov 14 05:38:54
Commented on: "Homebuilders Are Feeling Lucky For Good Reason" http://t.co/rTWoZMpdRK $XHB $BAC $BZH $DHI
Seeking Alpha - All
19 Nov 14 23:00:18
Housing Market Data This Week: False Flag Reports http://t.co/82VoRiTfMq $BZH $DHI $KBH $LEN $PHM $RYL $TOL $XHB
Market Int Center
19 Nov 14 08:33:00
Beazer Homes USA $BZH Trading Near $19.11 Support Level ( http://t.co/1TY9CpJ2hK )
Seeking Alpha - All
19 Nov 14 00:54:19
Homebuilders Are Feeling Lucky For Good Reason http://t.co/8gS87zGGdZ $XHB $BAC $BZH $DHI $KBH $LEN $PHM $TOL
Jake13
18 Nov 14 21:54:22
BZH Year to date has changed -19.33% percent. +11.24% in the last 30 days. $BZH Beazer Homes USA Full breakdow http://t.co/uyb4hwmz5l
Jake13
18 Nov 14 21:54:00
$BZH BZH Year to date has changed -19.33% percent. +11.24% in the last 30 days. $BZH Beazer Homes USA Full breakdow http://t.co/A031WyG7WZ
Penny Stock Secret
18 Nov 14 20:45:18
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/SVqoMlijqL .. $BYM $BZH $BZT
$Stocknewsalerts
18 Nov 14 12:01:49
$BZH ALERT: New Beazer Homes USA Inc. SEC Filing From our Stock News Alerts App
Stocks News&Markets
18 Nov 14 12:01:14
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/iGOCsLAPV0
Stocks News&Markets
18 Nov 14 12:01:13
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/cdaIANd42f
Stocks News&Markets
18 Nov 14 12:01:12
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/3FwsVgbVOc
NASDAQ
18 Nov 14 12:01:08
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/tq9hNIsHiH
NASDAQ
18 Nov 14 12:01:06
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/4Q7HWaWc0W
NASDAQ
18 Nov 14 12:01:05
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/SMaqQflUnF
NASDAQ
18 Nov 14 11:58:21
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/YvtjP4pW3u
NASDAQ
18 Nov 14 11:58:19
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/853q4vJjpX
NASDAQ
18 Nov 14 11:58:18
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/q5UHU3omdV
NASDAQ
18 Nov 14 11:58:17
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/qFiqXn32UO
NASDAQ
18 Nov 14 11:58:15
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/8um5g9krAN
NASDAQ
18 Nov 14 11:58:14
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/q2EbPtWeGW
NASDAQ
18 Nov 14 11:58:13
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/6un4Wt1lPf
Stocks News&Markets
18 Nov 14 11:58:11
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/U5gN6oP3Y5
Stocks News&Markets
18 Nov 14 11:58:10
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/wJ1FtP0Zp3
Stocks News&Markets
18 Nov 14 11:58:09
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/0uMftnx4KR
Stocks News&Markets
18 Nov 14 11:58:07
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/yV1GGHstFy
Stocks News&Markets
18 Nov 14 11:58:06
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/OdkGmncp6U
Stocks News&Markets
18 Nov 14 11:58:05
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/aiL0YbG3J1
Stocks News&Markets
18 Nov 14 11:58:03
$BZH - Statement of Changes in Beneficial Ownership (4) http://t.co/T3Fzrr1R7G
12Stocks.com
18 Nov 14 08:53:38
SmallCap #Stocks Trend $OFLX $SCMP $BODY $LEAF $NGVC $ACW $PERY $WIFI $BZH $RUTH $HALL $PEI $PSEM more@ http://t.co/GiravokQod
				
				
By  +Follow June 10, 2014 2:57AM
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