Thursday, October 12, 2006

Rotation, rotation, rotation...

Nice green day on the market, mostly anyone who knows popular stocks could make money today - that troubles me some.
Would you care to ask - why? OK, today is 12th - so what you ask, tomorrow is 13th - you think I'm nuts and cannot get to the point because there is no point - wrong you are. Tomorrow is a big 401K inflow day, but at the same time it is Friday, it has been quite good week so far, so I think what was happening today is that money managers started to rotate money out of few well performing sectors, such as health care providers (which is starting to get hammered lately and I see some nasty MACD divergence on XLV ), Big Pharma and "too good to be true" overachieving other stocks and put money into well known names "safer names", not necessary just tech names - just well known names and they used some of cash reserves they had in portfolios, so what I'm saying - whatever had to happen tomorrow - happened today, purchases meant to be made tomorrow were made today. If it holds water, then we are going to see a pop in the morning and then choice of stagnant trading throughout the day or selloff after noon. Don't forget Wall Street mentality - it is still October.

As game plan for tomorrow - biotech has pulled down some, tomorrow it'll most likely go down so more in the morning at least- I'd use it to add/open positions in biotech cos recomended on this blog and on Trade Guild blog for the last 2 weeks.

If you hold "fancy" retail stocks - I'd start to ease up on those, take at least partual profit

I think next substantial move will be in nanotech stocks, some were up lately, take a look at PXN I'd say it is C&H

Gold/commodities stocks criping higher - I would not be a buyer yet, but I think this might change somewhere from 1 day to 1 week - be alert.

Here is a bad(for consumer) / good (for invested in oil) news - I think it is about to reverse and go up, so keep an eye on OIH and USO ETFs and oil related stocks - a lot of oversold goodies there - just throw a dart.

No new lists today stick with the winner from last 2 weeks ( remember that if I'm not in particular stock - I rarely monitor it for longer then 1-2 weeks )
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