Stan Weinstein au sujet du DJI à 14,000 points

« Market Monitor »- Stan Weinstein, Editor & Publisher of « Global Trend Alert »

Friday, September 14, 2007

PAUL KANGAS: My guest « market monitor » this week is Stan Weinstein, editor and publisher of « Global Trend Alert », a financial advisory service for institutional investors. Stan, welcome back to NIGHTLY BUSINESS REPORT.

STAN WEINSTEIN, EDITOR & PUBLISHER, « GLOBAL TREND ALERT »: Always my pleasure to be back, Paul.

KANGAS: The Dow as we know, hit a record high just above the 14,000 level in July and promptly sold off rather badly. Was that sell-off within the range of a normal correction for a healthy bull market or are we beginning to see the bear market?

WEINSTEIN: I don’t want to get hung up in semantics because one person’s bear market is another person’s correction. What I feel very strongly about, Paul, very strongly, is that an important high was hit in the mid-July period and at least two-thirds will of the market is already in its own private bear market. So at best it’s neutral and we’re no longer in a healthy (INAUDIBLE) bull market.

KANGAS: What indicators warned you that the rally to the new high, all-time high was suspect?

WEINSTEIN: There were so many. Let’s just focus on the fact that the advance decline line hit its high all the way back in early June, on June 4 and then the Dow made a series of new highs thereafter, always unconfirmed. That’s a warning and also very mediocre new highs throughout July and the icing on the cake, one day after the Dow hit that high 14,000, there were more new lows than new highs, both on the New York and (INAUDIBLE) market. Not a good sign.

KANGAS: On your last visit with us in mid-November, when the Dow was at about 12,300, you warned that if it fell below 11,200 the market was in big trouble. It didn’t fall below that. Here we are at 13,400. Do you have a new Dow worry level?

WEINSTEIN: Here we go — my new level is 12,800. If at any point the Dow breaks down and closes – at the close below 12,800, that would turn what’s a problem market into a much bigger problem.

KANGAS: Well, how do the other technical indicators that you follow stack up right now?

WEINSTEIN: There are mixed but there are a lot of other things to worry about. The Dow Jones transportation average, not doing very well. That doesn’t look good. My proprietary S&P survey which measures the percentage of stocks that are healthy in that universe, only 30 percent of all S&P stocks are technically healthy. This is a very difficult market and you have to treat it with great caution and selectively.

KANGAS: Is this market going to remain highly select and volatile like it’s been?

WEINSTEIN: I think it is, especially with hedge funds becoming a bigger and bigger part of the market, I think we are going to remain in the selective market because even though the market is bearish, hedge funds will still look for the one or two sectors that they can do buying in. So I think it’s a fact of life.

KANGAS: That word « sector. » What sectors do you like?

WEINSTEIN: I am still bullish on technology, which last time I was on the show I liked and I think technology in general looks good. Health care also looks good. I like I lot of gold stocks and other metals, industrials, fertilizer stocks. Those are the good places. Even in good areas Paul, there’s some bad charts.

KANGAS: What do you dislike?

WEINSTEIN: There are some bad stocks. Banks, brokers and retail, those are bad. They’re oversold. In a rally, don’t buy them. Sell the rally.

KANGAS: OK, so it’s too early to get in for the long term.

WEINSTEIN: Absolutely.

KANGAS: Now you touched on gold and you like it. Any further follow- up on that?

WEINSTEIN: Absolutely. I think gold is very bullish and I have a new worry level for gold. I told you last time 600, Now 640. If any point it closes below 640, then gold becomes a problem. What I would think is going to happen if some point gold goes top side and it closes above the 732 level, then I think gold is going to really shine.

KANGAS: OK, now how about bonds? Are they a safe place to be to avoid the volatility of stocks?

WEINSTEIN: I think that it’s a safe place, but it’s not my number one investment area, but it’s moderately OK.

KANGAS: Now short selling, should the individual investor get into that?

WEINSTEIN: I do think so. As I wrote in my book, « Secrets of Profiting in Bull and Bear Markets, » I think everybody should learn how to sell short. Otherwise it’s like driving a car with no reverse. You only have one gear. I think you should learn how to do it, but do it the right way with protective buy stocks. And then when you do it right, the few judicious shorts will make you run your own account like a hedge fund.

KANGAS: But as they say on Wall Street, he who sells what isn’t his’n buys it back or goes to prison. It’s a dangerous proceeding.

WEINSTEIN: Right. You have to learn the proper way to do it.

KANGAS: OK. Any final thoughts? We have about 20 seconds.

WEINSTEIN: I think that this market volatility is more than anything I have seen in my 40-plus years of market tape reading here and I think people have to learn to sell rallies in the bad stocks and use pull backs as a buy (ph) in things that I’m bullish on like some of the technology issues.

KANGAS: Good advice. Stan, as always it’s a real pleasure to have you with us.

WEINSTEIN: Paul, it’s my pleasure.

KANGAS: My guest Stan Weinstein, of the « Global Trend Alert. »

NIGHTLY BUSINESS REPORT

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