A Lot of Bull & Buy Delta Airlines?
We've got the Dow roughly back to where it was when I first said over a month ago that the Dow would fall from 8000 down towards 6000. Well, it got as low as 6500 so that was a pretty good call.
And speaking of good calls, several weeks ago as the latest bottom was bottoming I speculated that taking some in- or near-the-money positions in January 2011 leaps in the likes of GE and Dupont might be prudent speculations. So far so good on that.
As to why the market seems to be bullishly bouncing, the technical character of this market is now bullish, with Market Edge signaling an "Early Entry Buy" for the Dow and longs for both the S&P 500 and the Nasdaq. Of the three, I like the Nazz the best and moved a chunk of my 401K into that a few weeks ago.
Our eternal question is whether the technicals are matched by improving fundamentals. I think it would be most fair to say that while we are not seeing much improvement, we are seeing some stabilization in the economy. Still, big questions continue to loom as US debt levels will be soaring, Europe remains the weak global sister, and Asia is likely to escalate its beggar thy neighbor practices to boost its fortunes.
I'm introducing a new YouTube feature this week called "NavarroStrategies." The inaugural video analyzes the airline sector and concludes that Delta might be the best bet of a highly speculative lot. Check out this new feature at http://www.youtube.com/navarrostrategies. Let me know what you think!!!!
Bottom Line: If you did your homework while sitting on the sidelines in cash, now is the time to start cautiously building some positions...I like GE, Intel, Dupont, and Delta for now plus the Nazz. Just be ready to cut your losses and run quickly if it all starts to go to dung again.
Other Things You Might Like
- Volatility Edge in Options Trading, The: New Technical Strategies for Investing in Unstable Markets (paperback)