First,
the market continued to get narrower with gains led by larger stocks which make
up the large-cap indexes while the small and mid- cap stocks did poorly. The
Russell 2000 has been down for three straight weeks while the S&P 400 was
down for a second straight week. Secondly, the market internals have been
deteriorating. After reaching a high in early September, the NYSE
advance/decline line has been sliding and currently shows no signs of reversing
that downtrend. Finally, new 52-week lows on both the NYSE and the NASDAQ have
been expanding and are now at the highest level since early August.
For the
broader market to continue to climb higher, those negative divergences will
need to catch up soon. Until we see that happening we will remain
conservatively cautious.
Going
into the coming week we will be watching the highlighted names on the Watch
List for possible Buys but I will not chasing anything aggressively. Remember
we are nearing the end of the 3rd Quarter and much window dressing
will take place while the main driver in the market will be news from random
sources as Earnings Season will not reconvene until mid-October.
The
“Master List” which drives the portfolio process is in the process of being
updated and will be put in place at the close of trading September 26th. The update will be included in next Saturdays
Model Portfolio update. There are
several names in the current portfolio which do not appear as of now to be
making the cut.
The names which I will be watching in the coming week include but
are not limited to the following: Apple Inc. ($AAPL), Aetna ($AET), Avago
Technoligies ($AVGO), Enterprise
Products ($EPD)
and Targa Resources PTNR ($NGLS).
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