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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
Media Sentiment
3 May 15 12:59:52
$BZH received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 91
US Banking News
3 May 15 12:57:46
Beazer Homes USA’s Strong Sell Rating Reaffirmed at Zacks $BZH http://t.co/l9S2BtVxze
Sleek Money
3 May 15 07:37:28
Beazer Homes USA Earns “Strong Sell” Rating from Zacks $BZH http://t.co/aMhc9enJg1
2 May 15 20:35:42
Beazer Homes USA Receives “Strong Sell” Rating from Zacks $BZH http://t.co/Xr7r8azSDP
DeSota Wilson
2 May 15 18:45:18
Houston housing market holds up http://t.co/c6VzNOyyoJ #RealEstate #oil #builders #residential #construction $BZH $PHM $MTH
2 May 15 08:57:02
$BZH: Beazer Homes USA Raised to "Hold" at TheStreet (BZH): http://t.co/oDVZx9QWdE
2 May 15 08:38:26
Beazer Homes USA Stock Rating Upgraded by TheStreet $BZH http://t.co/Lz2N5CtzNU
2 May 15 08:37:04
$BZH: Beazer Homes USA Upgraded by TheStreet to Hold (BZH): http://t.co/pwMMooraUr
2 May 15 07:12:01
$BZH: Compass Point Reaffirms Neutral Rating for Beazer Homes USA ...: http://t.co/8hs0HYJMEw
Sleek Money
2 May 15 07:04:36
Compass Point Reaffirms Neutral Rating for Beazer Homes USA $BZH http://t.co/yc2jhVQd1W
2 May 15 06:03:55
@cvpayne $BZH... can you believe I bought it at 17.23 and it roun-tripped on me...and even went down a bit. Entire portfolio is no man land.
2 May 15 00:10:11
Beazer Homes USA Inc. Reiterated Rating by Zacks (Ranked 85th) to Strong Sell $BZH #BZH http://t.co/bWeSnJeUAu
Ticker Report
1 May 15 17:56:45
Beazer Homes USA Upgraded by TheStreet to “Hold” $BZH http://t.co/JzG5YQMEXE
Sleek Money
1 May 15 17:50:16
Beazer Homes USA Upgraded by TheStreet to “Hold” $BZH http://t.co/LmLl6hm6m6
US Consumer News
1 May 15 17:45:31
Beazer Homes USA upgraded by TheStreet to hold. http://t.co/L2TD9n5CiQ $BZH #BZH
Media Sentiment
1 May 15 17:44:55
$BZH received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 643
Analyst Ratings
1 May 15 17:40:19
Beazer Homes USA upgraded by TheStreet to hold. http://t.co/x2LleTPra8 $BZH #BZH
Ticker Report
1 May 15 16:57:23
Beazer Homes USA Given Strong Sell Rating at Zacks $BZH http://t.co/bKSTRZB2rR
1 May 15 16:51:09
$BZH - Beazer Homes USA Given Strong Sell Rating at Zacks (BZH) http://t.co/1Yfuuvio2l
1 May 15 14:42:02
$SPWR $BZH: Construction falls: http://t.co/ykj9UXFaD5
The Legacy News
1 May 15 14:12:24
Beazer Homes USA’s “Neutral” Rating Reaffirmed at Compass Point $BZH http://t.co/2q4mimyPCL
Breaking News Now
1 May 15 13:59:02
$BZH: Houston Housing Market Holds Up: http://t.co/9VGoMWoW9Q
Kris Hudson
1 May 15 13:55:24
That #Houston #Housing Hangover Hasn't Surfaced Yet http://t.co/ApSp1TUSFp via @wsjrealestate $DHI $PHM $RYL $MTH $BZH
Peter Bardens
1 May 15 11:31:25
$BZH Beazer reports 2Q loss http://t.co/Mr7k2fElOa
1 May 15 07:09:41
Beazer Homes USA $BZH Announces Earnings Results http://t.co/siLRlAaDjd
Matthew Goldstein
1 May 15 06:19:29
RT @rickrothacker: Judge on Beazer: "Illegality became the norm in this company." http://t.co/c53szmJhQY $BZH http://t.co/SzNtRq8Jjr
Rick Rothacker
1 May 15 06:17:20
Judge on Beazer: "Illegality became the norm in this company." http://t.co/c53szmJhQY $BZH http://t.co/SzNtRq8Jjr
Charles V Payne
1 May 15 04:36:56
@Softcrush thanks...what's cost on $BZH? I'm probably going to skip $VALE but like the recent tape action
Ticker Report
30 Apr 15 13:26:19
Beazer Homes USA Rating Reiterated by Compass Point $BZH http://t.co/VVytrXITAH
Binyamin Appelbaum
30 Apr 15 13:24:49
RT @rickrothacker: Former Beazer executive sentenced to 10 years http://t.co/k7iNkU5PlR $BZH
30 Apr 15 13:24:19
RT @rickrothacker: Former Beazer executive sentenced to 10 years http://t.co/k7iNkU5PlR $BZH
Charlotte Observer
30 Apr 15 13:23:05
RT @rickrothacker: Former Beazer executive sentenced to 10 years http://t.co/k7iNkU5PlR $BZH
Rick Rothacker
30 Apr 15 13:22:53
Former Beazer executive sentenced to 10 years http://t.co/k7iNkU5PlR $BZH
US Banking News
30 Apr 15 13:22:29
Beazer Homes USA Receives “Neutral” Rating from Compass Point $BZH http://t.co/LyfEDwgEnK
Instrumental Data
30 Apr 15 13:21:35
BEAZER HOMES USA INC $BZH 10-Q now available
30 Apr 15 13:20:46
$BZH ALERT: New Beazer Homes USA Inc. SEC Filing From our Stock News Alerts App
US Consumer News
30 Apr 15 13:14:34
Beazer Homes USA's neutral rating reiterated at Compass Point. http://t.co/pYhrrWxCKf $BZH #BZH
Penny Stock Don
30 Apr 15 13:13:51
$XOM $COP $IMX $BZH $V Nasdaq plunges 1.5%; Dow slides triple digits, clings to gains for 2015 http://t.co/lYvzaWV5yx #Nasdaq #DowJones
Analyst Ratings
30 Apr 15 13:09:29
Beazer Homes USA's neutral rating reiterated at Compass Point. http://t.co/W3YAc9gsvR $BZH #BZH
Richard Saintvilus
30 Apr 15 12:13:08
Beazer Homes Demolishes Revenue And Earnings Targets, Shares Heading To $22 http://t.co/9TO3im3z3n via @salphatrending $BZH
30 Apr 15 11:54:21
Compass Point Maintains Neutral Rating on Beazer Homes $BZH http://t.co/ld3lhYIRpl
Media Sentiment
30 Apr 15 08:11:07
$BZH received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 397
Market Int Center
30 Apr 15 08:10:36
Beazer Homes USA $BZH Showing Bearish Technicals With Support At $17.18 ( http://t.co/BWXYrBnvhl )
30 Apr 15 07:37:04
$DHI $BZH: Beazer Homes Demolishes Revenue And Earnings Targets, Shares ...: http://t.co/jgJhLGeOX9
Long & Short Ideas
30 Apr 15 07:34:49
Beazer Homes Demolishes Revenue And Earnings Targets, Shares Heading To $22 http://t.co/TJs6WTJrGl $BZH
Seeking Alpha
30 Apr 15 07:34:48
Beazer Homes Demolishes Revenue And Earnings Targets, Shares Heading To $22 http://t.co/ttpJF8hfm3 $BZH
Kris Hudson
30 Apr 15 07:07:10
.@BeazerHomes 2 pull out of New Jersey, blames lack of profitability. Will finish projects in progress, but won't start new ones. $BZH
Social Alpha Inc
30 Apr 15 06:30:30
Stocks trending on social media now: $CKSW $FCN $BZH $WX $PBF $DSPG $ABAX Trade social sentiment @ http://t.co/JXotpHpS8Z #tradeSentiment
The Legacy News
30 Apr 15 06:27:17
Beazer Homes USA $BZH Releases Quarterly Earnings Results, Beats Estimates By $0.06 EPS http://t.co/YdijDzY1Mx
Clark Joseph Kent
30 Apr 15 06:24:08
Early movers $VIAB $CI $HST $TWC $GNRC $BZH $PBI $CAH $AVP $NOK-FI $AAPL $YELP $SAM $FLEX $MAR $SFLY $BIDU $CRM http://t.co/EhdJs8OskQ
By  +Follow June 10, 2014 2:57AM



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