I’m Bullish On Stocks In These 2 Sectors — Here’s How You Enter
Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show “Investors Edge” on over 50 radio stations. If you would like a free trial to Gary’s Daily Market Alerts click here.
I told you on
August 4th that RETAILERS appeared to have topped. The nail
may have just been put into the coffin.
WMT beat earnings by .02, but it lowered guidance due in part to high
gasoline
prices. Of course, high gas prices are meaningless. Right? That’s what I
keep hearing. I keep hearing that inflation adjusted, prices are lower than
where they were 20 years ago. Are you kidding? Last I looked, I am paying
50% more for gas than last year.. This is a huge tax on the consumer,
business and the economy as a whole…but don’t worry The government says
not to worry. When they come out with their inflation numbers, they want you
to believe the number should EXCLUDE food and energy. Methinks some in the
government are smoking the same stuff Willie Nelson is famous for.
Other RETAILERS went along for the ride. RETAILERS have topped as a whole
and should be avoided. Do not underestimate their importance as they have
been a leading group in the latest leg up in the market. Leading names like
ANF, AEOS, BEBE, DKS, JWN and others have been absolutely mauled. Do keep in
mind that there are many RETAILERS reporting this week…so some playing
fields may change…but as a whole, the market is speaking loud and clear.
That leads me into the market. Up one day…down the next…seems like we
are getting into that pattern again. The NASDAQ has had its third
distribution day in the past week. I told you the NASDAQ had a date with the
lower 2100’s and that’s exactly what is happening. Time to look at support
levels again. The S&P broke below near-term support at 1222. It now lies
right at its recent breakout at 1219. I don’t need to tell you what a failed
breakout in the S&P can mean. The DOW is a smidge below near term
support…which was 10524. It now sits on its converging moving averages.
This is do or croak time for the lagging DOW. Smaller cap indices like the
RUSSELL and the MID CAP 400 are now tracing out short term tops. Any further
drop will break them down off of inverted cup and handle patterns. Need I
say more.
Sector notes:Â
I continue to believe OIL STOCKS are going to pull back…just like they
have the past couple of days. I suspect there is another 3-5% to go in the
near-term as they remain extended. OIL stocks are still buyable into the
pullback.
I believe COMMODITY stocks are now about to start pulling back. They had
become a wee bit too extended also. They are still bullish…just need
better entries.
The SOX is now approaching ITS major breakout level of 450. Many
SEMICONDUCTOR names have already broken down. Some of the bigger caps that
have a major influence are still hanging in there…namely TXN, NSM and a few
others. Bulls do not want 450 to be violated.
Gary Kaltbaum