They Called In The A-Team
When the market takes one of its biggest hits in history,
brokerages have to scramble to muster up buyers. And one of the ways they drum
up buying support for stocks is by calling in the “A” Team —
financial houses’ best analysts — to make buy recommendations.
One of the best known in this cadre is Goldman Sachs
Chief Strategist Abby Joseph Cohen. In a bold statement, the perennial bull
did not mix words when she said, “stand up and buy stocks.” Cohen
also increased the weighting in her “model” portfolio from 70% to
75%. Cohen reasoned that stocks are “overvalued.” (Please note
that entities who followed Cohen’s recent buy recommendations have been
hammered in one of the worst bear markets on record.)
The major European stock markets set the upside in
motion, rallying between 4% and 8% each. US stocks gapped open to levels
that put curbs on program trading.
Six up arrows from
the Market
Bias Indicators Page told you that the indices were deeply oversold. The Dow
is up 331 at 8566, the Nasdaq Composite is up 73.44 at 1496.63, and the
S&P 500 up 36.78 at 1002.58.
Some of the most beaten-down blue chips are making
good headway this morning. After tumbling over 10 last week, 3M
(
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coming back from a one-year low and is up 4.58 at 91.56.
General Electric
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loss last week and is rebounding today with a gain of 3.98 to 35.25.
In tech, JDS Uniphase
(
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over one year ago had the second heaviest weighting on the Nasdaq 100
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is having its biggest single-day up-move since July, tacking on 16%, or
.89, to 6.25.
Other once more influential Nasdaq 100
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components are also rallying with big percentage gains. Oracle
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is up 1.56, or 14.5%, to 12.32 and Sun Microsystems
(
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9.5%, to 8.72.
Despite the A-Team clanging the buy bell, it is
generally better to listen to the market than to analysts. If you’re going
to go long, follow the best stocks in the best performing groups. The aero
defense and insurance broker groups were among the few areas of the market
to rally last week, showing a surge in their group momentum.
Stocks from the aerospace area continuing higher
today include Engineered Support Services
(
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PowerRating), a firm that provides services and products that support military operations. Today, EASI
announced additional orders from the army for its Chemical Biological
Protected Shelter, contamination-free work areas that can be used as mobile
medical aid stations or field command posts in chemically or biologically
contaminated areas. The Air Force ordered similar additional units last
week. EASI is up 2.95 at 54.55 and has already done two-thirds of its
average daily volume. EASI has a top, top three-, and six-month RS ranking
of 98 and 99, respectively, from the Stock
Scanner and was mentioned repeatedly here last week in the Insights
From The War Room. EASI is up 10% since Wednesday.
L-3 Holdings
(
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also up .93 at 86.48.
Among the insurance brokers, Marsch
Mclellan
(
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from a double bottom on its third-best accumulating volume of the year
Friday. The stock rallied as many as 6.50 before pulling back and is up 3.99
at 86.02. Willis Group
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PowerRating) also hit two new all-time highs last week (the stock just IPOed in
June), and is up .20 at 21.00 in a second inside day and potentially bullish
pennant formation.