Honest Abe's Daily Diary
- Look what the market returned to intraday: homebuilders, which had been initially sold after construction-spending data. I reiterate that builders, as opposed to derivatives, are the way to dance in the housing recovery. Hovnanian (HOV) is acting best relative to its peer group.
- I won't be a fan of basic materials or transports until the U.S. and China officially get re-inflated from extraordinary stimulus. CSX (CSX) and Caterpillar (CAT) are prime examples of why you should sit out this sector for now, and ditto for something like the iShares Dow Transportation Average (IYT).
- If you're inclined to dabble in consumer discretionary, it's GNC (GNC) over Vitamin Shoppe (VSI).
- On Decker's Outdoor (DECK), I'm not feeling how its outlook is shaping up on cost of goods sold, nor on what this means to consumers.