With the wild Russell rebalancing action last Friday and what seems like beginning-of-the-month cash infusions today, it feels like the market is being temporarily held up to some degree. I'm a little hesitant to suggest that since we seem to just keep on squeezing the bears and frustrating the underinvested longs, but the start-of-the-month pattern I mentioned in my prior post certainly hints that we won't run much more, especially with the strong overhead resistance around 930 or so.
Other than a breakout in Intel (INTC - commentary - Trade Now) the most interesting action in consumer staples and food stocks. The move in those sectors is due mainly to a good earnings report from General Mills (GIS - commentary - Trade Now) but there is some surprisingly strong action in some of these stocks that are generally considered to be defensive plays. There are big moves in Kellog (K - commentary - Trade Now), McCormick & Company (MKC - commentary - Trade Now), Campbell Soup (CPB - commentary - Trade Now), Kraft Foods (KFT - commentary - Trade Now), Alberto-Culver (ACV - commentary - Trade Now), Unilever (UN - commentary - Trade Now), Dean Foods (DF - commentary - Trade Now) and so forth, which are normally the sorts of names investors seek refuge in during bear markets.
Even though the market is pulling back as I write, we still have good breadth and positive action. This is not the sort of market environment in which defensive plays tend to show good relative strength. Normally there is a strong rotation out of other sectors when food and consumer staples are strong. I'm not seeing any major sector act that poorly, today although there is some rotation out of energy after a strong start.
At the time of publication, DePorre had no positions in the stocks mentioned.
P.S. Will you be there when Cramer makes his next move?
Strong brands and companies with vast market exposure can help bolster your portfolio. Jim was able to lock in a 64% gain by buying Ingersoll-Rand at $13 and selling at $22.50. Action Alerts PLUS members were the first to see these moves. Were you among them? Get Free Access Today!
Rev Shark Blog Follow the Patterns 7/1/2009 12:28 PM EDT It's the beginning of the month, so we're seeing a surge in buying activity.
Rev Shark Blog Lazy Days of Summer 7/1/2009 9:02 AM EDT I don't expect too much action ahead of the holiday, but the jobs numbers could whip us around.
Rev Shark Blog Overnight Flip 7/1/2009 10:34 AM EDT The leaders of yesterday are down while the laggards are out in front.
James "Rev Shark" DePorre is the author of Invest Like a Shark: How a Deaf Guy with No Job and Limited Capital made a Fortune Investing in the Stock Market. He is founder and CEO of Shark Asset Management, an investment management firm, and he also operates sharkinvesting.com, an interactive online community that serves and educates active investors. DePorre holds business and law degrees from the University of Michigan, is a member of the Michigan Bar Association and a former tax attorney and CPA. He lives in Anna Maria Island, Fla., with his wife and two children. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Rev Shark appreciates your feedback; click here.
RSS FEEDS
PODCASTS
