Dinger888

ETFs to Capture Byron Wien's 10 Surprises for 2009

The bulls continue to fight to keep their foothold in the markets. The major indexes are all holding just above those key thresholds of support that we noted last week. As we explained and detailed last week, this remains a critical point for both the bulls and bears. Mid-week it appeared that the bears were taking control, but the bulls were able to fight to keep their position. It will be interesting to see if the bulls can get lift off from here. We believe that we will get an upward move from this point – as the market continues to demonstrate a consolidation pattern between the upper and lower ranges identified in last week’s report.

Again, in this market, we never really know what to expect until we see the market actually move. Therefore, if you agree that we are consolidating and should get an upward thrust in the next couple weeks ahead, be sure to hedge your positions. Plan your trades ahead of time and allow for a bit of error in direction by hedging with options or futures. In the days ahead, continue to invest with a bit more caution and plan your trades as if you were wrong.

Take a look at “Best and Worst Industry Groups” section for some insight into where the big money is flowing into – and flowing out. Also, take a look at “Trade of the Week” for a spread trade that has the potential of a 28% rate of return over the next 26 days even if it doesn’t move.

Looking at the major sectors, there are some interesting stories being told by the charts. Many of the sectors are in a consolidation mode, meaning that they are basically trading in a sideways trend without a lot of action. There is still money to be made by trading a consolidation pattern, but different investment strategies will be required to produce results. Some of the sectors noted to be in a consolidation pattern over the last several weeks have been the technology sector, the materials sector, and the utility sector.

There are (2) two sectors that are showing bullish strength and (2) two sectors that are showing continued deterioration to the downside. The sectors that show the greatest upward promise at this time are the health care sector and the energy sector. Within the energy sector, we particularly see huge potential with the natural gas and oil. Stocks like Anadarko (APC) is of particular interest. There is a trade here that has the potential of producing a 28% in the next 26 days without the stock even moving…check out the “Trade of the Week” section for details.

The (2) sectors showing the greatest strength to the downside (bearish) are the financial sector and the consumer staples sector. Those of you that like making money as stocks fall in value, you may want to consider investigating Caremark (CVS). We will look to see how it reacts in the next day or two and see what happens as it approaches its resistance at 28.85…if it doesn’t break through 28.85 with any force (which we don’t think it will) – then we will look to go short the stock or buy PUT options for a ride to the downside.

Trade Well,
Dinger
centerji.com

Nucor's Record Quarter Translates into Strong Growth

Good article. Yes, I agree. NUE is a solid company and it is sitting at solid support near 50. I am confident this will make for a nice long-term position.

Trade Well.
Dinger