Get Tunnel Vision
FTD! No, not
the florist. I am talking Follow-Through Day.
I mentioned in my last
report that if last Tuesday’s action was a true low, The market would get a
strong follow-through day very soon. Friday was as good as any. Before I get
into the technicals, here is some food to chomp on.
- All the news has been bad.
Analysts are downgrading everything in sight, lowering estimates and target
prices. (Of course, after a monstrous drop.) - Companies are continually coming
out with poor numbers. - Stocks are not going down on the
bad news. This is a complete 180 from previous months. This indicates
that for the most part, sellers have dried up. - Interest-rate-sensitive stocks
continue to outperform. This tells me that rates are going to stay tame. - The Fed. The Fed. The Fed. Very
simply, this was a necessity to at least give growth stocks a chance to
rally. This is much more important than the election. - BusinessWeek. Perfect
timing. Guess what greeted me at the mailbox on Friday? The front cover was
titled: “Tech Slump.” Funny, I don’t remember that type of
cover back in March. I did see that type of headline back at the lows of the
’98 debacle.
Now, that’s all noise. My motto is
always: “It’s not the news or the noise, it’s how the market reacts to it.”
Anyone that does what Marder,
Fleckenstein and I do, possibly have the hairs on the back of their neck
sticking up after a long drought. Notwithstanding the election, (as of this
writing, the Supreme Court reversed the ruling by the Florida Court which may,
in turn, reverse the plunge in the markets at 4:05 p.m. on Friday) it’s time to
start looking.
Get tunnel vision! Stay with the best
setups possible. Most of last week’s move was stocks playing catch-up from a
major drop.
A few stocks are now V-shaped.
The best-looking names are still to be
found away from the growth complex. Financials continue to hog the “New
High List.” It will take a while before you get a bunch of good-looking
names in the growth area. If the market has legs from here, they will start
running up their right side and then hopefully, bust out.
A couple of more names to look at:
How would you like to chat
live and get Gary’s lastest thoughts about trading strategies and the current
markets? Well, you will get your chance this week as he will be a featured
speaker on AOL MarketTalk Live. Gary will appear Wednesday,
Dec. 13 at 5:00 PM Eastern time. For AOL browsers only, you can
view AOL MarketTalk produced by Sage via AOL keyword: MarketTalk. Following the
chat, anyone with any browser can access the transcript via Sageonline.com.