What You Need To Know About Google
While I was on vacation, I received about 300 emails all with opinions where
the markets are going. The tally: 60% think the market is going higher…40%
lower…with a few calling for a crash. Some of you actually think we are
headed back to 2002 lows in the next year.
Well, I would rather go a little more in-depth into the market because I am
starting to see some crosscurrents that you need to know about. Before, we
talk about the “market,” let’s talk about individual sectors because there is
so much going on there.
We remain negative on HEALTHCARE right now. This does not include BIOTECH.
HOSPITALS and HMOs now feel topped out and should be waited on.
Speaking of BIOTECH, a few names have gone parabolic in recent weeks…namely
AMGN, GENZ and CELG. Please let them pull back. If there is anything we do
know about this business, nothing goes straight up forever. A strict buy
discipline is warranted.
We believed REITS could have put in a near-term top a couple of weeks back.
Wrong! The pullback lasted 3 days. We still believe it is getting late in the
game for this area that has been rolling for the better part of 3 years.
We were right about OIL PRICES putting in a top around the $60-62 area…but
OIL STOCKS are back on a roll after pulling back. We suggest that the end is
not near for OIL STOCKS but need to be bought on pullbacks.
RETAIL remains a wee bit heavy here. This just means that many names are
extended and may need to rest. The good news is that only a handful of names
have broke down while leaders like BBY, ANF and FD refuse to budge to the
downside so far.
SEMICONDUCTORS continue to act fine. Amazingly, this is happening in the face
of INTEL topping out on its recent earning’s report.
We keep waiting for HOUSING stocks to top…but nothing doing. Just realize
when the market ultimately tops, HOUSING stocks will not be immune.
GOOGLE…since you keep asking. GOOGLE has topped out in the near-term off of
its latest earning’s report. $288.51 will be the first important support
test for you Googleites.
We believe the markets are starting to act a wee bit tired here. This is not
the end of the world. Since the London bombings, the markets have had a good
run. It would be quite normal for a rest/pullback to work off some of the
move. Unless volume starts to kick in to the downside…unless we start to see
many high volume breakdowns, we expect any pullbacks to be controlled and
rotational.
Gary Kaltbaum