This Has Called Every Top In The Past Three Years
Before I even get into the market, I need to
make commentary on Warren Buffett. I have a ton of respect for him as one of the
great investors of all time…if not the greatest. I have the greatest
respect for him for how he carries himself. Even after he was laughed at by the
“INTERNET” wackos and being put down as old news, he has never come on strong
with “I told you so.” I don’t know if I could have held back. I respect him for
the fact that he does not “Donald Trump” himself just because he is very rich.
BUT, DUDE, get in the real world. You see, Mr. Buffett is saying “no” to
dividend tax cuts as a tax cut for the rich. DUDE, 30 million households, over
10 million senior citizens, would get a tax cut. If you want to be so generous
as to give your tax cut back…by all means, I will pick every important charity
for you to give it to…or just hand it over to me. Don’t rain on the everyone’s
parade. It’s all relative my friend. $1.00 to you may mean nothing, but to many,
it is a heck of a lot.
Back to our regular programming.
I told you in my last report to expect a pullback…which is happening…but I
am conflicted. I must admit I keep waiting for the day the market gets
trashed…and that’s not good. So, pay no attention to me. I want to just
present the facts.
Technically, there has been some deterioration. In fact, over 300 stocks broke
their moving averages…either the 50- or 200-day on Monday. BUT, there is still
plenty of good.
Look at the charts of
(
BSC |
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PowerRating) and
(
LEH |
Quote |
Chart |
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PowerRating). It must be a positive when a
couple of BROKERAGE stocks are acting so
well.
I mentioned on FOX last week that OILS were
going to get a leg up as they were poised to break out. Take a look at the
OIH. Good move. Stocks like
(
XTO |
Quote |
Chart |
News |
PowerRating),
(
SII |
Quote |
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News |
PowerRating),
(
PTEN |
Quote |
Chart |
News |
PowerRating),
(
BJS |
Quote |
Chart |
News |
PowerRating),
(
OXY |
Quote |
Chart |
News |
PowerRating),
(
VRC |
Quote |
Chart |
News |
PowerRating) and
(
MUR |
Quote |
Chart |
News |
PowerRating) have moved out.
There
continues to be more good-looking charts than uglies…so far.
So, continue to scan the NEW HIGH LIST for stocks that are breaking out of long
bases…and of course, keep your sell rules…no matter what.
I must tell you the negatives because there are some.
As I mentioned in a previous report, take a look at
(
MSFT |
Quote |
Chart |
News |
PowerRating). Very simply, this is not healthy action…and is
something the market may have to deal with. Combine that with the fact that
DELL’s recent breakout failed and the
suspicious action in the SEMIS, you may just
have a near-term top in TECH.
While I
stated that there were still more groups with positive charts than negative
ones, PHARMACEUTICALS,
RESTAURANTS and SEMIS
are now lagging badly.
Sentiment remains horrid. Please remember that sentiment is secondary and
lagging…BUT…do not ignore the fact that bearish newsletter writers…AKA
“THE WRONG-WAY CROWD” is now at…and get this…an 11-year low…less bearish
than the top in 2000. Bulls are also way up there. Imagine, just eight weeks off
a six-year low, bulls are rampant, bears are running for cover, Barron’s
has a front cover stating “THE BULL IS BACK,” and speculation is rampant. Please
keep all this not in the back of your mind…but the front. You may want to run
through my archived reports as this type of sentiment has called every top in
the past three years. Let’s hope for a change, this time is wrong.
And lastly, the DOLLAR. Take a look at the
chart of the DOLLAR. This is not good. Yes, it is oversold and will probably
bounce…but this is one ugly downtrend. I am amazed that it is being talked
down. MISTAKE!
