Continue To Overweight This Sector
Let’s tinker a bit with
our thoughts as I am seeing some short-term changes you need to
know about…just short-term.
I believe the Nasdaq/Semis could bounce from here.
I say this for 2 reasons. The first being that they have already dropped a
decent amount in a short period of time and sellers seem to be less
aggressive. Secondly, they are sitting on their 200-day averages. I believe
this is the place they put up a good fight and a normal place to bounce off
of.
That leads me to the rest of the market. I do believe the
Dow/NYSE-types could still lag as I am not
seeing any let-up in the selling…just yet. I do not like the fact that the
Brokers broke support in the past couple of days, even
though good earning’s news was reported.
^next^
But…something to consider is the latest trashing
in the Oil complex. I would definitely lay off this area as this group is
getting bludgeoned and feels lower. This in itself is a positive because it
may be a harbinger of lower OIL PRICES. Have you seen the pump lately?
That all said, I will know a lot more about the
market on how it bounces. It is easier for me to measure the market on how
strong it bounces after a drop. Let’s first see the bounce. I will be
looking for signs of a low…which will include an up day…and then a strong-volume follow-through day to embolden me to go long. So far, we haven’t even
started the count.
Lastly, my thesis on Japan is still playing out
well as many names continue to pop as well as the Japan market itself. You can
continue to overweight in the JEQ/EWJ or a Japanese ADR as they are all moving
hand in hand.
Gary Kaltbaum