Poet, you might be interested in this.
It is from a post I did on the FOOL.
mish writes:
There have been 3 attempts over the past week for the DOW to break 11,000.
Does anyone else sense exhaustion?
Reply from Ted.
I do. The typical reaction that the markets take in an economic downturn is to look for safer places to put one's money. Therefore we have seen the flight into the Dow and bonds and cash over the last year.
Well, how about some dogs of the Dow? You like dogs, right?
clearstation.com
clearstation.com
clearstation.com
Or how about healthcare and drugs?
clearstation.com
clearstation.com
clearstation.com
clearstation.com
But remember, the market anticipates six to nine months in advance. So the first sectors to lead an economy out of a downturn are Financials:
clearstation.com
clearstation.com
And then refinancings and mortgages:
clearstation.com
clearstation.com
for building and construction:
clearstation.com
clearstation.com
See where I am going with this? The smart money has already anticipated six to nine months out because they have been through this before. So I ask, where is the smart money going next?
I look for signs of rotation out of the Dow and into the NAS. Just like money was rotating out of tech stocks and into the Dow, bonds and cash. I should have seen it coming last spring. What is really happening now?
Yes, it seems like the Dow is bumping up against resistance and the Nas is groveling for support, so keep your eyes open and follow the smart money like a barnicle on a whale. It could be rotating out of the safe havens and into techs again.
Do you think anyone who has owned any of these stodgy companies in the last six months feels like they are in a recession? I know that alot of these companies are not very sexy, but hey? Where big money moves, that is where you want to be.
If you know of any sector wide rotations showing up in the charts as fresh breakouts, let me know.
Thanks in advance.
Ted
Do any of those charts look like the average Naz stock last Feb when the Naz rose to 5000 fell to 4500 and rallied back up, almost to the previous high?
M |
