Special Market Correction Edition!
Tonight I will be on Fast Money on CNBC at 5:00 pm discussing the market correction and what it might mean:
• S&P is up 28% from August to February, a blistering, unsustainable pace;
• We are giving the market the benefit of the doubt — this looks like a correction, not the end of the rally to us;
• We have sold our winners like Cenovus and Suncor (SU, CVE), and the NYSE Exchange (NYX) on merger news; we also dumped other names that were losers for us: American Greetings (AM), Eastman Kodak (EK)
• We have bought consumer names like Dell (cheap at 11.5 P/E; if it gets thru $17.50, the next target is $25), Hershey as it broke thru October’s highs (HSY) and CBOE (after we sold NYX on the merger)
5 Reasons why we are giving the market the benefit of the doubt:
1. Sentiment: % of Bulls moderates, this is encouraging
2. Technical: S&P 500 and NASDAQ has good support at the 40 & 50 day moving averages
3. Energy: Recent Crude weakness should not be misread as economy weakening
4. Emerging Markets: Hang Sang Index stabilizing
5. Economic: US Unemployment continues to trend in right direction
Video posted here.