Keep Your Eye On The Ball
Personally, I
think we are going to go a lot lower in the major averages, BUT
DON’T LET MY THOUGHTS SCARE YOU because I may very well be wrong in my
opinion! I thought the same thing all of October 1998, and that is why I follow
a sound set of rules that have proven themselves many times in the past. Let me
mention that even though I had a massive bearish opinion of the market in
October of 1998, I somehow managed to execute the same rules and buy a good
chunk of America Online
(
AOL |
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PowerRating) as it broke out. My opinion on the market
quickly changed as AOL began to fly, then the Yahoo!
(
YHOO |
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and the rest is history.
The major averages don’t look too
healthy after the recent action. Nonetheless, yesterday was the first
opportunity for any of the indices to follow through on Monday’s rally. (They
always come when you least expect it.)
What looks good right now? The medical
sector and security firms. These two groups are trying to step up and show
themselves. Either one is capable of providing the necessary leadership for a
bull market. Unfortunately, there are very few stocks with the right
qualifications within these two groups that are ready to move.
A few names that pop into my head are
all interesting stocks, but they have their work cut out for them in order to
set up as viable investment candidates:
(
CACI |
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PowerRating),
(
EASI |
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PowerRating),
(
GTNR |
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PowerRating),
Amer Home Mortgage
(
AHMH |
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PowerRating), Dianon Systems
(
DIAN |
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PowerRating), L3 Communications
(
LLL |
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PowerRating),
to mention a few.
Even though there are few stocks to go
after if the market does confirm the latest rally, sentiment indicators are also
very negative. Their negativity points to the fact that good things may happen
sooner rather than later.
- Investors
Intelligence Investment Adviser survey shows Bears climbing to 42.1% while
Bulls stand at 33.7%
- Put/Call ratio hit
1.2, which shows extreme pessimism
- 40 New highs in
NYSE, AMEX & NASDAQ yesterday with a whopping 502 new lows
Meanwhile, stick to solid research and
keep your eye on the ball. Be careful not to let the noise interfere with your
daily and weekly analysis that will inevitably lead to profits in the next bull
market.
At TM2001,
I will be giving a presentation on how I eliminate the noise from the equation
and focus on what has made me money and kept me out of trouble. I’ll go into
depth of how I do this on a daily and weekly basis…see you there!
Have a great weekend!