Both Sides Now
First off, I
appreciate all the positive feedback from Friday’s
report. It tells me I need to do more just like it.
As far as the market’s go, no surprises that it had a pullback last week. My
sentiment indicators flashed red lights several
weeks ago. Sometimes there is a lag. In any case, a pullback was definitely
wanted. It puts a little fear back in and takes a little froth off. So far, the
pullback is normal and is acting as it should.
The Nasdaq is the strongest of the major indices right now…so keep a close eye
on it. The first support lies at 1935 which is exactly at the 200 day average.
And not coincidentally, that is exactly what the Nasdaq bounced off of on
Friday. A break below 1935 would ring some near-term alarm bells. The next
support is at 1900. You also need to keep watching the Semiconductors.
The market seems to be on a leash…following its every move.
The last point I want to make is to continue to watch the major indices but to
pay more attention to individual sectors. There are bull and bear markets
happening at the same time. Sectors on the bearish side are Alternative
Energy, Drugs, Retail-Supermarkets and Utilities.
You also need to watch the Biotechs. It has not
cracked yet, but is showing some bearish signs with more and more names breaking
down.
On the bullish side and mentioned in previous reports are Homebuilders
and Restaurants.
It is just not about buying up the market right now. You must buy right.Â