If This Happens, The Market Has A Reason To Rally
"U couldn’t find a bull sector if U had a
shovel + quart of BBQ sauce!!!"
Yes, that’s the email I received just yesterday. I am not 100% sure but I do
believe there is some sarcasm to the email. Hey, I just interpret the
markets…don’t blame me. I have absolutely no control of what happens.
The fact is, FOR THIS SECOND, I am not finding much…even with a shovel and
some BBQ sauce. Many sectors have put in near-term tops…simple as that. My job
was to be one step ahead…which I believe has been done well. So at the risk of
not being the biggest bull in town, here are some short thoughts.
I believe "the market" is at an important juncture…at least for the near-term.
Every major index is either at support or at shorter-term moving averages. For
the DOW
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DJX |
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levels.
For the S&P
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SPX |
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1219 breakout and its 50 day average.
For the NASDAQ
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COMP |
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smidge away from its shorter-term 50 day moving average at approximately 2130.
Very simply, an ability to hold these levels will
give "the market" the impetus to rally from here.
As far as sectors go, I am expecting the OILS to now bounce after their recent
pullback. As you know, I was in front of the latest move. But I noticed
something on the way down. Too many pundits are already calling for an end to
higher OIL prices…after just a small pullback. I also say this because I saw
some reversals to the upside yesterday in the group. I will be able to gauge
things better by the tone of any bounce in the group.
RETAILERS are still splat. The best thing I can say is that they are oversold
and due for a bounce. At this juncture, bounces are to be sold as I believe the
tide has turned. The damage has been too strong to turn right back up. At best,
weeks of technical damage need to be repaired before a big move up again.
There are still plenty of leadership names out there…and I did not need a
shovel and BBQ sauce to find them. It is important to keep this list because
they have held up in the face of a defensive market recently. Names like
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AMGN |
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BOBJ |
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BRCM |
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FLSH |
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AAPL |
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WFMI |
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GNSS |
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TXN |
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AMD |
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MFE |
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COF |
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names gag, it will be a big sign that there is another leg down coming. So far,
they are rocks. You can find these stocks on the new high list or on any screens
of stocks within 5-10% of new highs.