If you’re a buyer, focus on these 7 sectors

  • November 14, 2005
  • Gary Kaltbaum


Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of href=”https://tradingmarkets.comtmu/store.site/swingtrading/Books/6026/”
>The Investor’s Edge. Mr. Kaltbaum is also the host of the nationally
syndicated radio show “Investor’s Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts


href=”https://tradingmarkets.comsubscriptions/details.cfm?item=5736&subcat=st”>
click here
or call 888-484-8220 ext. 1.


Lots of things on my mind this week.

 

My New York Giants give up 100 or so yards and lose the game
against the Boatboys…I mean the Vikings…to an interception, kickoff and
punt return for a touchdown. For a minute, I thought Joe Pisarchik was going
to show up.

 

My New York Knicks are @#%&#&#@!  I hear Latrell Sprewell has
not been picked up yet.

 

Martha Stewart on the front cover of Fortune Magazine…saying
“I cannot be destroyed.” Well, maybe she will not be destroyed but has she
seen her stock lately? I love CEOs who tell you how well their company is
doing despite the fact that the last I looked, her company had a $50 million
loss in the past 4 quarters on $185 million in revenues. For such a crappy
company, she sure gets a lot of press.  

 

 

Uh oh! The Barron’s front cover is entitled “TECHNOLOGY REVIVAL!”
Just when the NASDAQ is attempting to break out of a 2 year trading range, Barron’s may have put the kibbosh on things. Hopefully, the front cover
indicator does not work this time.

 

Nice call by me for a short-term pullback on Thursday. It
lasted about 20 minutes.

 

 

The charts of the major indices look fine right now. For
instance:

 

The TRANSPORTS broke out to all time highs and have shown no
distribution as of yet.

 

The NASDAQ 100 has broken out above yearly highs.

 

The NASDAQ, S&P and other major indices are back above major
moving averages.

 

The DOW is on the verge of finally breaking out above the
10,700 area that has held it back.

 

As far as the major indices go, as long as we continue to see a
lack of distribution days, I am good…but…

 

Shorter-term, things are extended. Stocks that have been
leading this move like the TRANSPORTS and miscellaneous FINANCIALS, have gone
a wee bit parabolic. I will not be a doofus and call for a pullback
again…but I will say I would not be surprised if we get one.

 

I have not been thrilled with the Advance/decline figures or
the up/down volume on a daily basis. In fact, they have not been even close to
keeping up with the market. Simply put, the market has gone big-cap. Big-caps
have much more influence on the major indices…thus the recent move.

 

I have not been thrilled that NEW HIGHS are much much lower
today than the last time we hit these levels. This simply indicates that fewer
and fewer stocks continue to participate.

 

All of this could eventually come back to haunt the market but
until the major indices give way or distribution show up, continue to
concentrate on the sectors that have been leading. They include AIRLINES,
BANKING, BIOTECH, INSURANCE, BROKERAGE, RAILROADS and selective
TECHNOLOGY.

 

OILS – I would continue to stay away from new commitments to
OILS and most ENERGY as a top looks to be in place at least for the near-term.
As I  have told you, the group is still very over-owned.

 

HOUSING – Not much new to say. TOLL BROTHERS put a stop to any
attempted rally in the group.

 

GOLD – I think GOLD stocks are finally coming out of the
somewhat ugly correction they have been in. I suspect we are going to see some
upside testing here.

 

BONDS – I think BONDS feel like they are sold out here. As of
this second, any bounce would be just that…an oversold bounce.

Gary Kaltbaum