Underweight These 3 Sectors

  • April 14, 2004
  • Gary Kaltbaum

More of the same. The
market has been following my script to a tee. 

 

Bonds
continue to get crushed.


 

REITs
continue the bungee jump. 




 

Utilities are
now joining the party.


 

Mortgage-related,
Debt-related, Homebuilders, Bond funds–and anything
interest-rate sensitive–continue to
buckle.

 

As I have already told you, continue to
underweight these areas as they are coming undone.

 

Now on to Tuesday’s action.

 

One day does not mean the end of the world
but…volume was heavy.
But…the A/D on the NYSE was 425-2919…OUCH!

 

The Dow has
now sliced back through its 50 day average.


 

The S&P 500
has done the same.


 

Gold has
broken down here on at least an intermediate basis.


 

I must tell you that on Tuesday morning, the
market had a chance to break above a nice cup-and-handle pattern. After
Tuesday, that party looks to be over now.

 

Take your time here. This tape is becoming about
as challenging as possible. The market has not had to deal with the threat
of higher rates in a very long time. The world has been leaning and
investing on low rates for years. If that has changed, there could be
serious repercussions for those who just sit there. I will be watching rates
closely as it looks to be dictating policy right now. 

 

Continue to watch leadership though. Names like
Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating),
Cigna
(
CI |
Quote |
Chart |
News |
PowerRating) and others reacted well on
their earnings and need to be looked at. I just believe you have to go
slower as the markets whipsaw around.



Until next time,

Gary Kaltbaum