Japan in deep recession…market has one down day after soaring…and right back up. Much of Europe is blah but markets rally up. You know the game by now. Markets drop…just announce more QE and do more QE…inflating things even more. Remember, all is well as long as markets continue to react well to the trillions that have been and will be printed by central banks around the globe. Leave no doubt that our slowing of QE was coordinated with others raising QE.
WHAT IS NOT WORKING!
Notwithstanding any short-term bounces:
We would continue to avoid GAMING…dead in the water right now.
We would continue to avoid most ENERGY/OIL & GAS. We do make note of good action in some pipeline stocks and recognize the buyout potential in the group..
We would continue to avoid GOLD/SILVER…though there is a counter-trend rally going on right now…and suspect there is some more to go.
We would continue to avoid countries like BRAZIL,RUSSIA and while European markets are rallying up here, they are still weaker than other areas.
We would start being careful about BIOTECH as a few names starting to act toppy with a couple of names having topped.
We would continue to underweight the small caps and to a lesser extent, the mid caps. This underperformance has been going on for almost a year and believe any time down, small caps will lead down. We are always looking for things to change but so far, nothing doing.
We would continue to avoid most COMMODITY areas though some are in bounce mode right now. Again, so far, it feels like nothing more than a counter-trend rally after an ugly drop.
Next report will be on WHAT IS WORKING!