 |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
  RSS FEEDS |
Oil, gold and chemical stocks got rocked! They took out all the leaders on Wednesday, from Yamana Gold (AUY - commentary - Cramer's Take), Compania de Minas Buenaventura (BVN - commentary - Cramer's Take), Barrick Gold (ABX - commentary - Cramer's Take) and Goldcorp (GG - commentary - Cramer's Take) in the metal ore -- gold/silver group to Mosaic (MOS - commentary - Cramer's Take), Potash (POT - commentary - Cramer's Take), Terra Nitrogen (TNH - commentary - Cramer's Take) and Monsanto (MON - commentary - Cramer's Take) in the chemical/fertilizers group. If it was commodity-related, it was destroyed. When the stock market takes out its leaders constantly -- homebuilders in 2006, REIT/mortgage in July, big-cap tech in November, major oil in January, and now the gold and chemical/fertilizers on Wednesday -- there is no question that I prefer being in cash. But for some people who must constantly go long, let's take a look at a few groups and stocks that are doing very well now that gold, oil and chemical stocks are being sold. Three groups stand out in this ugly market, with their industry groups moving up the list the fastest over the past six months among Investor's Business Daily's list of 197 industries groups. Those groups -- Finance: Savings & Loans (No. 73 from No. 170), Banks: Northeast (No. 35 from No. 158) and Transportation: Rail (No. 6 from No. 100) -- have been producing the best stocks in my long scans and have had the most stocks hitting new 52-week highs. Today, we'll look at CSX (CSX - commentary - Cramer's Take), Genesee & Wyoming, (GWR - commentary - Cramer's Take), Hudson City Bancorp (HCBK - commentary - Cramer's Take), Dime Community Bancorp (DCOM - commentary - Cramer's Take), Community Bank System (CBU - commentary - Cramer's Take) and Tompkins Financial (TMP - commentary - Cramer's Take).
A low-volume pullback followed by a heavier-volume bounce would work also.
I would have gone long on March 17 had the chart not had such a V-shaped move off the 50-day moving average in March.
All of these look great for now, and they will probably continue to do well; these are the same industry groups (Finance: Savings & Loan and Small Banks) that led during the bear market of 2000-2002. If they don't work out, the stop-loss area is right there at the 50-day moving average. I am going to be right and ride the trend higher, or I am going to take a very small loss. I don't think it is a coincidence that these stocks, along with tobacco, medical and business services, are leading this market and that we simply can't find a bottom in the general market. These are your bear-market leaders of the past and they are telegraphing a rough market ahead. Until everyone and his brother stops looking for a bottom, and until we get a follow-through day on the stock market indices confirming the bottom, a VIX over 40 and stocks with very strong fundamentals setting up and breaking out of perfect bases, there is no way I am joining the amateurs in their bottom-calling game. Cash is king, and it doesn't hurt to be short the ex-leaders either, if you are an experienced market operator.
At time of publication, Hayes was short Terra Nitrogen.Joshua "MauiTrader" Hayes is CEO, president and founder of Big Wave Trading LLC, a Maui, Hawaii-based stock market advisory service. Hayes also runs BigWaveTrading.com, an online stock market commentary and stock selection service for short- and intermediate-term investment strategies using CANSLIM and other strategies. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. Hayes appreciates your feedback; click here to send him an email.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subscribe to our RSS Feed |
© 1996- TheStreet.com, Inc. All rights reserved. |
PODCASTS
