Use these 3 stocks to time the market
Timothy J. Truebenbach is the
President of True Capital Management and general partner of True Capital
Partners LP, a hedge fund. He uses a disciplined model that trades on the
intermediate-term time frame. For a free trial to Tim’s Nightly Stock Analysis
Report
click here or call
888-484-8220 ext. 1.
The market remains in this uncertain, wait and
see mindset. No one really knows when the Federal Reserve will stop raising
rates and that has been enough of an excuse for the stock market to stall at its
current levels.
Overall, we still appear to be under accumulation. Institutions are still buying
stocks, but they are being much more selective. Google
(
GOOG |
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PowerRating) was a recent
example as it found support off its 200-day moving average.
The chart of the Dow Jones Industrial Average is another piece of buying
evidence as it is sitting at 52-week highs. Another interesting point is that
this market continually rotates its leadership making it tough to ‘park’ money
in any one place and expect it to continually perform.
With the Dow hitting new highs, we are presented with ample evidence that
large-caps stocks may be coming back in favor. Small-cap names have done
exceptionally well over the past couple of years and are still sitting well
within reach of new highs.
The most common thread among different stocks, sectors and capitalizations is
that once they start hitting new highs they tend to correct before re-asserting
leadership. This market is a Recovering Market from the Bear Market that we saw
between 2000 and 2002. We are seeing money flow into new leaders and then shift
back to the recovery of old leaders, as opposed to a true Bull Market when
something would consistently hit new highs with very little in the way of
pullbacks.
This is a great time to step back and analyze where value or growth at a
reasonable price may lie in this market. It is time to decide whether leaders
like Apple
(
AAPL |
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PowerRating) or
(
GOOG |
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Chart |
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PowerRating) are done for a while and if new names like
Silicon Motion Tech
(
SIMO |
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Chart |
News |
PowerRating) are for real.
The greatest excitement the stock market provides is that it is ever-changing
and if we can change with it we stand to make some money!
Good Trading!