Some Very Important Points About This Market…
I continue to believe
we are in the late innings of this bull move. I don’t have a date or
a number in mind. I just believe a lot of stocks have run their course and there
are now many names that have seen their high for this cycle.
On top of the sectors I have told you to avoid, (MORTGAGE-RELATED,
misc. FINANCIALS, HOMEBUILDERS) you can add
REITs, which were crushed this past week. I suspect
the action we are seeing is just the first “shot across the bow” in the group.
Please check a few of these charts out…as they were bludgeoned.
The move was massive…and left no stone
unturned. EVERY stock in the
REIT area took a big hit.
I believe many RETAILERS put in a near-term top on
Friday. I am not sure if it is “THE” top. The
strong were hit
…and the weakest names like
(
FRED |
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(
KSS |
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and
(
NDN |
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I would definitely look to underweight both the
REITs and the RETAILERS right now to go along with the other areas I have been
telling you about.
Another interest-rate sensitive group that has stocks that are starting to act
toppy is the UTILITIES. Keep in mind, these groups
I have mentioned as a whole are groups that should get hit when rates go higher.
It is almost classic.
As far as the “market” is
concerned, please keep in mind
that I have told you recently that we may get into a situation where there is
not much upside…but maybe not much downside. So far, that thesis remains in
play. I believe we are past the time where EVERYTHING
works. I believe we are past the time where you get bailed out of mistakes. I
believe it is past the time where you can throw darts. Please stay in
touch with the following levels. A break above them will be near-term
bullish…Dow 10,570…S&P 500 1151…Nasdaq 2080…Nasdaq 100 1509…SOX 519.
How am I playing it?
Earnings come out in droves this week…but as
you can see, there has been both sides of the coin. Just look at
(
QLGC |
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(
YHOO |
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PowerRating)…polar opposites. That’s why it is so important to wait for
earnings before diving in. I am kicking back and waiting to see the numbers
reported. More importantly, I will be watching the reaction to the
numbers…then and only then dealing with it.
Gary Kaltbaum