Nesto and I are sick of hearing technicians tell us over and over again how the market is in a range between 1,250 and 1,450 on the S&P500. Really sick of it.
We're talking bubonic-plague level sick of it. We're going to break out in black spots and have our skin start decomposing while we're still alive if another chartist tells us what we all know.
Fortunately, Friend of Breakout Ryan Detrick joined us with some real-live sector- and stock-specific picks. Let's just cut right into them, bearish picks first:
- Avoid or short the financials. The genial Detrick was all but contemptuous of the financial sector as a whole. Among other negatives, he cites horrendous price action with strong call buying. To Detrick, that spells bottom-pickers. Buyers of the financial sector are out there "trying to catch that knife," Ryan says with a sneer. He says there's in the area of 10% to 20% downside to the group.
- Bet on the consumer. Really. Detrick points to the strength of the Consumer Discretionary Select Sector SPDR (XLY), which has held a three-year-old uptrend where others have recently failed. "Good price action amongst negative" is ringing the buying bell for the chartist. Among the particulars are Red Robin Gourmet Burgers (RRGB) and Tiffany (TIF) -- a strange combination, save for their price strength of late. Both charts look extended, but Detrick isn't sweating it. RRGB caters to the middle class, allowing families to enjoy an affordable night on the town. What are diners going to do with the proceeds? If they're individual consumers or Newt Gingrich they may buy a bauble at Tiffany, and if they're a group of M&A types, they may buy the entire chain. Detrick says Tiffany continues to be eyed as an acquisition target.
A sector to short and two strong buy ideas. You can see why Detrick is an official FOB. Check out the video and let us know what you think, either via the comments below or by sending an email to firstname.lastname@example.org.
- Newt Gingrich