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Late to the Stock Market Party
Late to the Stock Market Party
We were not very excited about last week's S&P's breakout to a new high because it took place going into a holiday weekend and with quarter-end window dressing.
With the indexes breaking out to all-time highs, it would seem that many names should be setting up on the long side. But we aren't seeing that. We see many charts that look like this:
JNJ
KR
K
GIS
The theme? Consumer staples. These are DEFENSIVE ISSUES. Typically when defensive, "people still gotta eat" companies start to lead.
If the market sees bad times ahead the "long only, have to stay invested money" looks for a safe port. It may not be looking for returns so much as a safe port. (So we wouldn't think about shorting these stocks anytime soon.)
We do not chase stocks. The extended stocks above are not "buys" by our method. We like stocks that are in uptrends but are pulling off highs (POH). We see little of that now, but below are the best looking POH stocks on our list currently.
GOOG
C
''Compare JNJ and KRO to GOOG and C. I call it a tale of two tapes. JNJ, KRO, K and GIS have been rallying and the entry points are not low risk. Extended may get more extended, but from the perspective of investing, it is late to buy extended stocks. While these issues may track sideways, new money should look for parties that are just beginning.
From a technical perspective, the charts for GOOG and C look better than the charts for JNJ, KRO, K and GIS.
Tape painting: money seems to gravitate to names that are able to keep the drive alive on the surface. Look at the DOW's eeking into a new high last Thursday. IBM was up 2.40 points, which accounted for about 20 points of the Dow's 52 point move -- almost half the index's move came from one heavily weighted stock.
GOOG makes up 8% of NDX 100 index - it's a good stock to run up to keep the NDX 100 higher. It's in a clearly defined uptrend, and pulling back off highs to trend channel support. It also has no topping pattern in place.
And finally...
Perhaps Uncle Ben and his wild rice gang have got our backs, and the stock market will never go down again. Nevertheless, the extended stocks are still extended. Furthermore, seasonality factors are close to turning more negative. November through April is the best period to own stocks - it's almost over.
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"...Compare JNJ and KRO to GOOG and C. I call it a tale of two tapes. JNJ, KRO, K and..."
KRO is Kronos International - 1.96 beta to KR's .73 beta. Totally different sector - KR Kroger is grocery, KRO Kronos is basic mats/spec chems. You don't wanna shop for your groceries at KRO Kronos but Bass has been fishing at HUN. "...Now, some big names have jumped into Huntsman Corporation (NYSE:HUN) headfirst. Hayman Advisors, managed by Kyle Bass, assembled the biggest position in Huntsman Corporation (NYSE:HUN). Hayman Advisors had 22 million invested in the company at the end of the quarter."
Drones are the future, might as well hold shares (regardless of what the global markets do) in corps that will get fat like BK suprime lawyers when the SHTF. Drones don't make themselves...plastics and polymers and adhesives do. interesting how 1 letter typo can mean a world of difference in something... guess that's how a flash crash happens... course w/ these computers, only takes a keystroke to fix it back. gotta love technology...I just bought 150 more rounds today and got a FREE Sunshine Minting Decoder Lens!!!
I remember when the internet stocks were up in the nosebleed territory ....when they plunged they gave everyone else a nosebleed.
"Sell in May and go away."
Let's hope it's contagious, and everyone goes away unitl we see DOW 4,000.
Rational thought provoking analysis (RTPA) VS. Insanity (I)....I wins!!
Using charts or even historical performance and theory to prognosticate "this" market's action is a gigantic mistake...Kind of like trying to figure out when complete depravity vacates the hearts of men. "When" becomes a useless question.
Charting, Pre Bernanke (under the O'Bowel Admin) was a worthwhile endeavor.
Men cannot atone for their sins nor time the market. "The future is cloudy" (Yoda).
I hate to be a grammar stickler, however Yoda's statement would be "Cloudy the future is."
Some of those lines are so straight you'd think a carpenter snapped his plumb line on the chart to determine where to send the stock. Jesus was a carptenter right? /sarc.
excuse me, but i don't see the chart for Purina Cat Chow, or Pedigree Dog Food up there.
Grandma has switched to generic.
Are you implying, "sell in May and go away"? Same shit different year?
Stock markest in the USA have less credibility than Obama and Biden.
I'd like to suggest that the two down arrowers (so far) are part of the O'Bowel Movement, or are just being critical of your spelling........
They'll keep printing until they run out of trees and paper.
Thanks for the charts.
+1
Good wave count. Now's the chance for a trend reversal, following the coming correction, otherwise - see ya in 6 months at 1775. :)
There is no "market", 85 billion will become 120 billion. What will anyone do about it?
take out big loans for real assets if you are confident in your income. the debt is being inflated away at an astonishing rate these days ;-)
"the debt is being inflated away"
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Wrong, take a look at government debt. Inflation/currency devaluation works to a point, but once you are creating money to simply pay fucking interest, you have past the event horizan and the liquidity trap becomes a fucking black hole. History is very clear on this.