The Neutral Theme Continues
Greetings from Dallas where I am attending NAAIM’s annual Outlook conference with the real thought leaders in the industry. Although I have been involved with NAAIM for almost 30 years, I still get excited and look forward to seeing old friends, meeting new ones and hearing from and participating with true cutting edge thinkers who aren’t beholden to Wall Street’s agenda.
So, here we are. Although my intermediate and long-term bullish outlook remains unchanged and emboldened, I remain neutral over the very short-term as I first mentioned last week when I turned in real time, right here. Where do I think the major stock market indices can pull back to? As I discussed last week HERE, I am not looking for anything significant on the downside, maybe a few percent here or there. And perhaps the bulls can just limit the downside to some sideways activity within a few percent band for a period of time.
While I am still very positive on semiconductors, banks and transports, other sectors are percolating and starting to lead equally as good. Communication services being among them. Don’t underestimate the importance of this development for the continuation of the rally. On the flip side, I have been bullish on the defensive sectors like utilities , staples and REITs and they seem to have peaked for now. Reducing those positions into strength seems like the correct strategy for the time being.
I am going to cut it off here so I can hear Doug Ramsey from the Leuthold Group offer his long-term bearish case, something I don’t agree with, but I am certainly open to other opinions. If nothing else, it helps me to solidify my own position or find holes in it.