Back The Other Way

The last few days underscore the problem with this market.  Now, everyone hates the financials and loves the materials stocks.  n, rotation, rotation.  No new money.  Taking profits from one sector and buy the beaten up areas.  The SKF position I have is doing nicely in the last few days as more concerns regarding Fannie & Freddie come out.  In addition, no panicking down near the lows for materials stocks has paid off as many were extended to the downside and we’re seeing a lot of upgrades for drillers and agribusiness. 

The last two days have been low volume but fairly strong to the downside.  We were overbought, the Russell 2000 had hit a double top on the charts and the internals on the way up were weak.  Not a surprise we are getting a pullback.  We just didn’t know when it would come.

The point is to sell stocks when they’ve had a nice run and buy the beaten up areas.  That’s working right now.

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2 Responses to “Back The Other Way”


  1. 1 Lee August 20, 2008 at 5:16 pm

    Karl,

    Near term overall US market, bullish or bearish?

    Last I recall you were bearish?

    Thanks!

  2. 2 keggerss August 20, 2008 at 7:55 pm

    I’ve been bearish for quite some time and I’m still bearish. We’re still not at any extremes so I wouldn’t go too long or too short. But, bottom line is that I’m still bearish.


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