Below is my list of live, long-side names for January. My personal attack list for an up-market. If we don't have an up-market in January, this list goes on the shelf and I go harpooning endangered whale bellies instead. Or I just go short, depending on the action.
I have to preface first the fact that there are far more broken stocks out there right now; momentum in the major market is at moment downward; market indices are either broken or reeling and nearly broken; volume was significant and rising on last week's decline.
Both the Nasdaq and the S&P 500 have now shown 4 distribution days in the last 6 sessions (definite negative); Friday being the heaviest turnover.
A counter trend is very possible, immediately from here or within a day or two AND the Fed may very well come to the rescue before their January 29/30th meeting and get back in line. In other words, an interim, surprise rate cut or else strong language which indicates that they will be cutting 50 and 50 on the 30th announcement day.
Fed fund futures Friday rose to a 69% chance that the Fed will cut 50 bp by next meeting; do not expect to see 25 this time around. The Fed is a political animal, they botched-up (down!) their last rate cut and pony show rather badly and this is an election year. Mr. Bernanke and Co.'s ears were shot off since Friday's jobs report and market smacking, I am sure (hopefully he was screening his calls). Company men have no doubt been suggesting ways the Fed can give up the ghost and get with the program. No rebels in this bunch, trust me - the interest rate market continues telling us where short rates are eventually heading and that is well below the current level. Now that the market has inconvenienced everyone again, you will see the Fed move to the reality the interest rate markets have been broadcasting. Watch and learn kids - when the public recognizes we're in a recession, the market usually heads north.
At moment, again, bloody stocks are everywhere - if the market doesn't turn I will be shooting fish in a barrel in the final 90 minutes of the sessions to come. I don't trust the Fed not to step in earlier in the day, so I will be cautious if shorting; I'll pick my spots. The last hour has plenty of opportunity for demoralizing prices - if I'm going to attack that direction, it will be in the safe red-lights of a cascading close.
Let's get to the lists (these are the long-sided lists for attacking if we are not breaking down further but instead bouncing or stabilizing. Short minded lists will come later, on an as needed basis)...
Here are the industry group sectors showing the strongest relative strength at this time (as I see them):
-Solar Power - This group has not flinched in any market downturn for previous 12 months.
-Fertilizers - If civilization ended today, Fertilizer was leading the charge. Get some soon.
-Farming Machinery and Ag. Operations: Pretty much the same comment. Go farmers!
-Medical - Systems, Diagnostics, Efficiency and/or Equip: You better get that checked.
-Medical - Biopharmiceuticals, Genetics: For here or to go?
-Metals: Pass for me, but a leadership group at present.
-Oil & Gas - Exploration, Production:
-Telecom - Wireless Intl:
Here are the live stocks as I see at the moment (*this is a possible long-plays list for January and not any further out - and a reasonable market overall is required; so none of these should be tested if the market continues breaking down further this month*). Most names are small or medium-sized, although a few are larger and a couple are micro. Most are smaller because the smaller growth stocks out-perform in January (normally). In any case, I recommend passing on anything trading below its 50-day moving average:
FERTILIZER & AG:
AGU (54% debt)
CNH (Heavy debt)
MON (though your body is shrinking your mind is expanding)
MEDICAL and/or GENETICS or BIOTECH:
ISRG (> 314 or 50-day m.a.)
ICLR (thinly traded)
KNDL (thinly traded)
TWTI (micro cap and thin, but biotech for ag. industry - woot!)
[this group should/could be hot this week due to the JP Morgan Medical Conference Mon-Thurs; the biggest medical-related brokerage conference of the year]
MICC (269% debt)
GLDN >101.50 or 50 day m.a.)
MBT (75% debt)
CHU (> 50 day m.a. - 54% debt)
TKC (> 26.25 or 50-day m.a.)
BRP (100% debt)
PHI (435% debt)
VSL (440% debt)
[this group will be on the short list soon enough I imagine]
ICE (> 50-day; >175.25)
EDU (eps due 1/15)
CEDC (76% debt)
TISI (eps due Tuesday)
CCH (trades pathetically light)