A Reality Check Before You Buy

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Tempting?

I know lots of people are tempted. But let me tell you what has to happen for you to buy right now.

You need 160,000 on the jobs print tomorrow.

You get 200,000, and QE3 is done.

You get 100,000, and QE3 failed.

If you can thread that needle, be my guest.

I think you have to focus on the generals: Celgene CELG , Boeing BA , Bristol-Myers BMY , United Technologies UTX , Microsoft MSFT , Intel INTC , Cisco Systems CSCO , Regeneron REGN , Gilead (GILD), Target (TGT), Texas Instruments TXN , Seagate STX and Biogen Idec BIIC . These have been the strongest stocks out there. They just started rolling over, compared with, say, the utilities and the real estate investment trusts, which have been correcting for ages now.

You almost want these stocks to come down to complete their rollover, as you can't get a bottom until all the generals give up the ghost.

Those are what you want to watch.

For me, I still don't trust this market. But unlike a lot of the chartists, I sure as heck like it more than from where it fell, as this is a 4.7% correction from the peak, and that's significant.

As always, stocks do not bottom all at once.

The first stock down should be the first to stabilize, and there I'm watching Federal Realty Investment Trust FRT , Ventas VTR and Simon Property Group SPG . They've been crushed, and they all have good fundamentals. I think it is time for them to begin the process of putting in a bottom. 

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