Let’s Simplify Things
While the
markets are rumbling, bumbling and stumbling this second, I will try
to simplify things.
The
negatives: Even with the drop since 1/4/02, sentiment remains
worrisome. For the umpteenth time, do not ignore this! How many times in the
last couple of years has too much bullishness and a lack of bearishness led to a
sizable drop. Simply put — many. The last extreme number hit on 1/3. Hmm!Â
As of this second, the VIX and VXN are very low…indicating complacency…not
good. The percentage of bearish advisors is at a four-year low…not good.
Bullish advisors are above 50%…not good. Most importantly, over 95% of
economists and 95% of strategists are bullish on 2002. That scares the living
____ out of me.
The technical pictures of the major
indices are a somewhat neutral position but I don’t think it would take much to
turn them down. I mentioned in my
last report some important support levels. The Dow’s support lies right at
9700. In fact, you can draw a line of support at that level going back to 11/13.
Isn’t it amazing that the 9700 was tested for five days without buckling.
This is a very definable level at this
juncture. The same goes for the S&P 500 at around the 1115 level. Nasdaq
support was breached for a day but came back above it quickly. 1870 is the
support going back to that same date of 11/13. You know what comes next. Any
violation of these levels would be a major cause of concern. So keep your eyes
on them.
The
positives: With all this talk of support levels and stumbling and
bumbling — certain areas are working. Do not ignore them. How about the Truckers.
I am not a big fan of Cyclicals but they are
working.
Heartland
Express
(
HTLD |
Quote |
Chart |
News |
PowerRating) broke out at $31.
Swift
Transportation
(
SWFT |
Quote |
Chart |
News |
PowerRating) is just about ready.
J.B Hunt
Transport Services
(
JBHT |
Quote |
Chart |
News |
PowerRating) had a powerful move out.
Werner
Enterprises
(
WERN |
Quote |
Chart |
News |
PowerRating) also has a nice chart.
Roadway
(
ROAD |
Quote |
Chart |
News |
PowerRating) was the first to break out
in November and still looks good. Setting up again.
I mention all these names because the
last two times I wrote about strong sector action, it was in Restaurants
and Homebuilders. You know what has happened since.
Seventy five percent of picking a stock is picking a sector in an uptrend or
ready to break out. I love when a lot of names in a group are moving in unison.
Another positive is the fact that the
NEW LOW LIST is non-existent. I would watch this closely for a pick-up in names
— but so far, so good. The NEW HIGH LIST remains in a tight range and more and
more names break out every day. I would like better quality but we’ll take it.
No matter what, stops on everything.