Believe it or not, not much has changed. Even with the 350 point down day, not much has changed.
With a few exceptions, the bad got badder and the good pulled in hard. .A decent bounce then started up but the bounce also did not change much.
So, like a broken record, notwithstanding oversold bounces:
We would continue to avoid energy/oil&gas…though we do believe a near term low looks like it is being put in place. We just think it may be a trade but that’s it. We would avoid most commodity names, transports (a couple of airlines act well), retail of all stripes (we have been avoiding for many months), biotech, just about everything auto-related, financials, big telecom, gross names like IBM, GE and the like, many real estate names and now maybe starting to see insurance get in trouble. We also need to mention Brazil as it is not good that evidence shown that the new Prez, like the old Prex, was and is a crook.
An important note on transports and financials. Both looked ready to break another level to the downside after the recent carnage. Both bounced past couple of days. Just letting you know both continue to act poorly and have to be watch for a break. If it occurs, market worsens. Watch the 20 day average for the transports as well as the week’s lows and for the xlf, watch the $22.90 level. On top of that, watch the KRE support at $51-$51.50.
Home builders remain in good shape, big cap tech/internet BUT and a big BUT…they have come a long way and now may be starting to trade wide and loose. The same goes for the very strong semis. Other areas are aerospace/defense, China ADRs, European markets and ADRs, managed care, home improvement retail and credit card cos (not the lenders).