We wanted to quickly point out two items. As the market
rallies further, one needs to keep an eye on the sectors that are leading the
charge. Over the past thirty days, the top performing sectors have been in
economically defensive sectors. The consumer staples sector has led the charge
up 5.4% with health care and utilities following close behind up 5.2% and 4.7%,
respectively.
Could this be more a short term anomaly or something more?
As seen in the figure below taken from stockcharts.com,
market tops into bear markets are usually preceded by strength in staples,
healthcare and utilities.
We are also a little troubled by the market rally on lower
volume. As seen below, volume on the S&P 500 has been declining even as the
market continues higher.
Bottom Line: We
continue to have upside exposure to markets but are convinced of a coming
market correction. We will be ready to finish taking profits and move to a
bearish stance as soon as our market models indicate the need to do so.
We would like to wish all of our family, friends and client
a happy and healthy holiday.
- Joseph S. Kalinowski, CFA
JSK Partners of New York,
LLC
40 Wall Street, 28th Floor
New York, NY 10005
40 Wall Street, 28th Floor
New York, NY 10005
T (212) 537-0462
T (800) 618-1120
F (800) 618-1120
T (800) 618-1120
F (800) 618-1120
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