We need to get this thread going! If the market turns down from here, the timing will be remarkably reminiscent of 2000. In 2000, the Naz topped in March, made a secondary peak in early September. Meanwhile, the S&P virtually ignored the tech stock top in March and came within a stone's throw of the March high in September. See charts here:
stockcharts.com
stockcharts.com
I would now add that short term interest rates began to fall in November 2000:
stockcharts.com
So the Fed pause didn't help matters much then. Don't expect it to help too much now, either. But there you have it. Small caps topped late March, S&P almost touched another high late August, and then it all fell apart and short rates started easing early November. Sounds pretty similar to 2006 if you ask me. I could see rates falling in 8-12 weeks.
Anyway, if this is the turn, we should have a good target list compiled here.
My targeting radar remains locked on homebuilding, and I'm building positions against construction suppliers (capex, steel, concrete, lumber), the consumer (retail, restaurants, autos), emerging markets, techland (semiconductor equipment, semiconductors, software), and startng to tiptoe into the brokers.
Now it appears finance may be getting into the act. Have a look at recent action in ACF and CFC - some weakening there.
In my opinion, sector selection is EVERYTHING: Message 22688270
So - we should highlight sectors to focus on, and names within
the sectors.
BC |
