This Sector Looks Good On A Pullback
All month, I have been
telling you about the changes I have been seeing in the market. I
have been telling you to be careful about all the areas that worked best since
this bull move started…including RETAIL, SEMIS, DISK DRIVES and other
related TECHS. Part of that call was the thought that the NASDAQ would
underperform at this time and the chance of the first real correction for
the NASDAQ since March. I also told you to overweight BIG CAPS, CYCLICALS,
OIL SERVICES and other INDUSTRIALS. So far, the market is following the script
to a tee. To prove my point, again this past week, while the DOW was up
another 250 points, the NASDAQ hardly budged and the SEMIS were actually down.
telling you about the changes I have been seeing in the market. I
have been telling you to be careful about all the areas that worked best since
this bull move started…including RETAIL, SEMIS, DISK DRIVES and other
related TECHS. Part of that call was the thought that the NASDAQ would
underperform at this time and the chance of the first real correction for
the NASDAQ since March. I also told you to overweight BIG CAPS, CYCLICALS,
OIL SERVICES and other INDUSTRIALS. So far, the market is following the script
to a tee. To prove my point, again this past week, while the DOW was up
another 250 points, the NASDAQ hardly budged and the SEMIS were actually down.
Now what?
The DOW and NYSE-types continue to very well. The
only negative I could come up with is the DOW is now approximately 470 points
above its 50 day moving average. That is about as extended as I have seen the
DOW.
only negative I could come up with is the DOW is now approximately 470 points
above its 50 day moving average. That is about as extended as I have seen the
DOW.
I like the fact that the UTILITIES has broken out.
I like the fact that the TRANSPORTS are about to
break out.
break out.
I like the fact that there is still about 7-8 out
of 10 stocks in technically healthy shape.
of 10 stocks in technically healthy shape.
That leads me to the NASDAQ…specifically TECHS.
The NASDAQ itself is back in a 3-month trading range…simple as that. It has
been laboring…it has been lagging. But after a big move up since March, you
would think this is normal. My main thoughts go like this: If the NASDAQ
breaks out of this range, bad individual charts or not, it will confirm the
rest of the market’s move. If it doesn’t, (and that’s my bet) I suspect it
will get in trouble sooner rather than later as many TECH stock charts look
quite vulnerable.
The NASDAQ itself is back in a 3-month trading range…simple as that. It has
been laboring…it has been lagging. But after a big move up since March, you
would think this is normal. My main thoughts go like this: If the NASDAQ
breaks out of this range, bad individual charts or not, it will confirm the
rest of the market’s move. If it doesn’t, (and that’s my bet) I suspect it
will get in trouble sooner rather than later as many TECH stock charts look
quite vulnerable.
So there you have it. As of this second, more of
the same. Continue to play the TECHS, SEMIS and RETAIL lightly while
overweighting “smokestack” stocks as they start to pull back from their
extended positions. OIL SERVICES continues to act well but is near-term
extended and can be looked at on a pullback.
the same. Continue to play the TECHS, SEMIS and RETAIL lightly while
overweighting “smokestack” stocks as they start to pull back from their
extended positions. OIL SERVICES continues to act well but is near-term
extended and can be looked at on a pullback.
More importantly, my staff and I wish you the
happiest and a safe holiday season. I will be appearing on FOX NEWS CHANNEL on
Christmas day at 4 pm.
happiest and a safe holiday season. I will be appearing on FOX NEWS CHANNEL on
Christmas day at 4 pm.
Gary Kaltbaum