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Dr. Kris
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Dr. Kris hails from the land o' lakes, beer, bratwurst, and Bucky Badger. She traded in her cheese hat for a propeller beanie and has never looked back. She has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her... More
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  • Market Notes: Get In Bed With Mattress Makers -- March 27 0 comments
    Mar 27, 2013 5:00 PM | about stocks: TPX, MFRM, SCSS, TI, ORAN

    4:00 pm ET: The S&P 500 (SPX) just cannot seem to close above the 1564 level. For the last two days, it's made a charge towards it going into the close but the level has proved to be insurmountable--at least for now. A close above this would likely signal another new leg up in the rally, perhaps the last one before "Sell in May" fever sets in.

    I do believe that the SPX will hurdle this level for two reasons. Number one is that the Dow Transport Index (DTX) is leading the charge, as it should. Last week's sell-off gave it the space it needs to launch a new rally, and it's doing just that. Reason number two is that the volatility index (VIX)--while back to a level of complacency (under 15) following the Cyprus snafu--is still high enough to allow for further index expansion. The market may seem overbought but if you look at the bigger picture, many stocks are still undervalued (meaning that P/E's are lower than their historical norms). While buying isn't frenzied, the pressure is steady--a good thing. This reflects a commitment by institutions (aka the "smart money") to accumulate positions. And if they're doing it, you should be, too. But don't dawdle as the bargains won't last forever.

    Today's Highlights: Sucking & Soaring
    Sector rotation continues as stocks in the consumer staples (household products), consumer discretionary (gaming, hotels, restaurants), healthcare (pharma, biotech, healthcare services and providers), regional banks, and utilities (especially electric utes) all continue to advance. Today's spotlight in the consumer discretionary sector was on the mattress makers, especially Tempurpedic (TPX, $50, +7%), Select Comfort (SCSS, $20,+7%), and Mattress Firm (MFRM, $35, +12%). The latter reported rising revenues prompting an upgrade and an increased price target to $37. The news sparked the gains in the other two pushing all three of them above resistance levels. Technically, all of these charts appear to be on bullish paths. Investors may wish to get in bed with one of these, and this is one time where I mean that both literally and figuratively!

    So much for the sunny side of the bed. On the gloomy side, shares of European telecoms continue to slide. Telecom Italia (TI, $7) sunk to a new all-time low while its northern amici France Telecom (FTE, $10) slid to a new ten year low. Today's 3% haircut in both of these issues was nothing compared to the 10% shearing in the Greek compadre Hellenic Telecom (HLTOY, $2.8). The downward momentum appears to be unstoppable and bears may want to take a gander at these names. Bulls may wish to put them on a watch list if and when they start to turn around. Remember, the further something falls, the more room it has to rise.

    Stocks: TPX, MFRM, SCSS, TI, ORAN
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