If you're going to tread water, best do it like a U.S. Marine and stay ready while you wait. Transitions are never comfortable on Wall Street, but most everyone can acknowledge that the market is in a state of flux in May. And legendary technician Louise Yamada of LYAdvisors.com is no exception.
"The U.S. market is still in an uptrend. That's a plus," Yamada assured the Breakout Brothers before adding, "You never short an uptrend."
So with such clear change of leadership this month -- staples (as represented by the XLP), health care (XLV) and utilities (XLU) have been leading in May -- and short-term support for the S&P 500 index broken at 1340, technicians are even more focused on the next levels. For Yamada, major support for the Dow is at 12,000 and 1300 for the S&P 500.
Even the old adage, "sell in May and go away" is proving prescient this month. And while Yamada calls the phenomenon ''very intriguing," she cautions that as long you follow the sector rotation, money can still be made during the summer doldrums.
As always, she never loses sight of her ''ironclad sell discipline" and encourages investors to go "stock by stock."
Still not sure? The line starts behind Macke to hear more of what's on the mind of Louise Yamada.