Don’t Worry About News
The most
important point I want to make today is that I believe the wind is in
your face. The major indices are acting like they are running uphill near-term.
There are several things standing out.
The Nasdaq
(
$COMP.X |
Quote |
Chart |
News |
PowerRating) and specifically big-cap Techs
look awful. It is not going to take much to tip them over. One only has to look
at charts of Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating), Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating), Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating) to
see what I am talking about.
Second-tier names like
(
VRTS |
Quote |
Chart |
News |
PowerRating),
(
CHKP |
Quote |
Chart |
News |
PowerRating),
(
BRCD |
Quote |
Chart |
News |
PowerRating),
(
CCMP |
Quote |
Chart |
News |
PowerRating)… do not help the situation. I think there is a good
chance of February’s lows being hit. The 1770 Nasdaq level looks like it can be
breached quite easily.
The S&P
500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) is now below the 50-day MA. A break below 1119
and see you at February’s lows. (Please notice that both levels are a stone’s
throw away.) There remains many good-looking charts. While the major indices
could gag, small and mid-cap names are still in fine shape. You can find many of
these names on the New High List. Just keep in mind
that the list is littered with a ton of low-priced, low-volume stocks.
Areas that are showing the strongest
charts are Newspapers (lots of good charts), Defense,Â
S&Ls, REITS and
Insurance. Not very exciting but it’s about what’s
working.
Go slow. It’s earnings season. Don’t
worry about the news. Worry about how the market reacts to the news.