Sector Rotation Continues

I wanted to get
this report out early today
because I have lots to do as a money
manager these days. My vacation is over.

Just as I thought the markets could go into a trading range, they start kicking
again. Vicious sector rotation continues but the tone is still positive. More
breakouts continue to occur each and every day. Some are worth looking at and
some are suspect based on their fundamentals.

On the long side, there continue to be ripe vines. Medical
stocks, specifically Biotechs are really
cooking. Some have gone parabolic. Be careful as many have suspect numbers.

(
CMX |
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edges out of base.


(
IVX |
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setting up well with three
big-volume days.


(
GENZ |
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seems to be one of the
leaders in Biotech.


(
LNCR |
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busts out of a
five-month flat base. This is one of the nicest breakouts I have seen. Probably
means it doesn’t work.


(
CIMA |
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moves to a new high. Just
another medical name.


(
BEIQ |
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showing powerful action but
would only scale in.


(
FDS |
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PowerRating)
— The chart speaks for
itself.

I was always taught that
to measure the health of the market, look at how many stocks are breaking out. I
would not get too crazy. Please keep a close eye on any stock owned and have no
tolerance for the downside. The one lesson everyone needed to learn from the past
year is: Always keep close stops on your selections.   

Lastly, this is a good time to isolate weakness. I have identified a few shorts
in this report and amazingly, even in this better market, most are working. It
is always easiest to isolate weakness when the market is moving higher.