Don,
<<Tom, I am actually seeing potential for higher highs. One example is the the DRG which when the DOW hit
8300 it broke the 500 barrier. The DRG hit 500 again 2 days ago and the DOW was only at 7700. The
all-time high for the DRG is 505. Of course that DRG is not the DOW or the NASDAQ or the SPX, but it
is still a major second tier index.>>
Have you ever thought about that Drug, along with other consumer nondurables - are defensive stocks in a bear market ? do you notice that G has tracked back to 90's even it has missed earnings ?
Some reasoning I read about is that these companies products are daily necessities and good time or bad, the consumptions are rarely affected.
Did you notice the drug stores stocks, and groceries stocks are flying high in past few weeks ?
I believe finding the right themes (right sectors) to go long or short are easier to guess where the market might head in ST.
Of course, if the whole market tanks due to something happens in Iraq or whatever, all sectors will be hit, just a matter of degree.
but I do not see that drugs are higher than before, so we might see higher high of DOW or Nasdaq.
Also MRK is much lower than when DOW is at 8300. in fact, MRK is lower than beginning of the year. |
