Stocks You Should Not Be Owning Now
Did I tell you I trust
nothing? If you want to know how easy it is for a leader to break
down, look at MOT…there are others. This is the splittest of splt tapes that
must be treated with respect. I can only think of 1994 as the last time it was
this tough. Give me a bull market…I am happy. Give me a bear market…I am
happy. Give me a tape that bounces back and forth with no progress and give me a
vacation in Hawaii.
I do believe the DOW and S&P can break out to the upside of this range it is in.
That would occur at are 10,440 and 1143 respectively.(show charts) BUT…it will
be meaningless to me. Underneath the better action in major indices, many stocks
are still in bad shape. Any breakout comes with negative divergences…which
will eventually come back to haunt the market later. The most important
divergence is how many stocks are in good technical shape…maybe half…maybe.
This action is classic late stage as the market sells off “riskier” plays into
“value” and big cap names.
Keep the lows of May 15-17 in your sites. Those areas are the goal lines to the
bear market. A break below and see ya. I gather before that happens, the half
of the stocks that are in good technical shape would already be starting to
break down. The market doesn’t just decide to make a move in a day…it sets up
for it. I do not believe this breakdown to be imminent but I do believe, if
nothing changes, it is a lock in the next few months. What day? NOT A CLUE!Â
Lastly, without a doubt, the worst acting stocks are BIOTECH and SEMIS. You
should not be owning any at this time. This is in stark contrast to their
leadership at the start of the bull move…something that bears watching. This
also fits in well with the fact that the NASDAQ continues to lag other major
indices at this time.
Gary Kaltbaum