After seeing the slide on Friday I was a little surprised to see how well the market internals held up. The screened stock ratio flipped to 13 to 6 favoring selling. I was expecting profit taking after the big advance due to the cut in interest rates, but, Friday was even worse than I expected, at least we did get lower volume on the downside. Again, we need to see any continued weakness on lower and lower volume. I'd go "lite" on any technology stocks, the earnings news may make them too volatile.
We continue to diversify into other sectors. The market looks down the road, and the lowing of the interest rates will overtake the falling earnings. Remember, the market winners this year may not be the same as the last couple years.
Our stock screening produced a lot in the transport area, trucking (ABFS, SWFT, WERN), and airlines (AMR, DAL, UAL), but the OPEC news may but a cap on their rally. A lot of the energy stocks have had a correction and started to rebound. Watch for the phone stocks to resume too. The pollution control stocks look good here and lastly, the software group produced a few interesting looking stocks, but tread "lite" as technology spending is likely to impact them.
Longs to watch: AVNT, BEAV, BSX (takeover rumors), CPRT, GETY, RSG, SNWL, TWBR, WCNX and WFC.
Good Trading!!
Sam
savvy-trader.com |
