SHREVEPORT, La., April 18, 2005 (PRIMEZONE) -- StockPickReport.Com (IARD #119079, http://www.stockpickreport.com -- the web's only non-mainstream stock rating service), rates Nasdaq 100, Select Sector SPDR-Energy, Motorola Inc. and DIAMONDS.
STOCKPICKREPORT RATINGS: Nasdaq 100 (Nasdaq:QQQQ) -- SELL http://www.stockpickreport.com/abrating.php?sym=QQQQ Select Sector SPDR-Energy (AMEX:XLE) -- SELL http://www.stockpickreport.com/abrating.php?sym=XLE Motorola Inc (NYSE:MOT) -- SELL http://www.stockpickreport.com/abrating.php?sym=MOT DIAMONDS (AMEX:DIA) -- SELL http://www.stockpickreport.com/abrating.php?sym=DIA Monday, April 18, 2005 StockPickReport Commentary Can It Get Worse? Don Harrold, Co-Founder
The market is still overbought. Weekly charts continue to point to more downside.
For those of you who are new to StockPickReport, please consider the following points:
1) January 3, 2005: We reiterated comments made first in November of 2004. Our contention was that there were 11 main reasons why the market would drop.
2) January 6, 2005: We made a specific call for the S&P to drop below 1150. We said, "...we think the odds of a move to 1150 are better than 1250, at this point..."
3) February 10, 2005: More downside guidance. "The pressure looks more to the downside now..."
4) March 16, 2005: We suggest the Rydex Double Beta Index Fund. "Take a look at the Rydex double beta index fund: RYTPX. You have to buy this through Rydex or through your broker. It has inverse performance to the S&P 500 equal weighted index. So, if the RSP (S&P 500 equal weighted ETF) is down 2% for the day, this should go up 4%. It's a great way to hedge your portfolio." RYTPX is UP over 10% since that call.
Based on the technicals we follow (stochastics, MACD, RSI) we are closing in on a more attractive "buying" spot.
Close to a Buy Signal Neil Batho, Columnist
For weeks now we mentioned we like to see levels of 40% oversold before we really think of buying. Well, the average stock is now 39.55% oversold. So, we could see a bounce in the market here. Also, only 16% of stocks are above their 10-week moving average. In January it was 78%! For the past several years we have seen bounces from these levels almost every time. Will we see a bounce this time? Possibly, but this time we have interest rates as a key catalyst acting against us, so don't be so sure..... but don't be surprised if we see a bounce some time this week. Keep in mind that major upward trendlines from the bull run starting 2 years ago have been broken. No doubt this run is over. It's done. Finished. Any rally will only mean a time to sell, generally speaking.
Back in the late 1990's, everyone said to "buy the dips!" If the market fell, just buy! Well, now we are reversing that to "Sell the rallies". That's how you know a bull market from a bear market. Anything you buy should have a profit target. Should it hit your target, sell. That's what these bounces will be good for.
Did you buy the Rydex Tempest Fund yet, RYTPX? If not, you really ought to. It could be the single most important financial decision you make this year. See past articles to read more about it.
It's inevitable that the FED is going to raise rates more. We all know this hurts the economy. Here is an important headline: "On Wednesday, the market came to the conclusion that the FOMC minutes were actually bearish. The statement that 'the required amount of cumulative tightening may have increased' was suggested that the ultimate neutral level for the fed funds rate might be higher than the market expected. Inflationary pressures would require the Fed to keep raising rates for a longer period, if not in a quicker manner."
Interest rates up, gas prices up, consumer debt at record levels.... could this be a perfect storm of financial ruin? Hope it's not. Prepare that it could be. Oil prices have come down, but have prices at the pump? No, they haven't.
So, take a step back, and think for a moment. You can preserve your capital, and wait a lot of this out, and you can do some trades along the way. We still like CEI since it has a great yield and we love RYTPX. There should be a "flight" to high yielding stocks in an environment like this. There are new, lower taxes on dividends as well. Remember? That didn't matter too much when the market was going up, but it's sure going to matter now.
This week, we'll come out with a list of high dividend paying stocks that have good charts. Heck, some of these have yields of 9% and 10%! If you could lock in a 10% return for next year, would you take it? Considering, all major trendlines have been broken? Comparatively, looking at what's out there, that type of strategy could be a great way to "park" some money and catch the next big move up, whenever that will come.
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If the links to our ratings above do not work, please use these:
Nasdaq 100 (Nasdaq:QQQQ) -- SELL http://www.stockmonthly.com/QQQQ-Stock-Research.php Select Sector SPDR-Energy (AMEX:XLE) -- SELL http://www.stockmonthly.com/XLE-Stock-Research.php Motorola Inc. (NYSE:MOT) -- SELL http://www.stockmonthly.com/MOT-Stock-Research.php DIAMONDS (AMEX:DIA) -- SELL http://www.stockmonthly.com/DIA-Stock-Research.php