Is That a Bear Knocking? Part 3

Dear Investors,

Either we’re 7.3% into a correction or we’re at the start of a new bear market.

As I mentioned in my new special report, Dow Theory issued a sell signal last week and all major indexes are below their 200 day moving averages and sitting near their two month lows.

Like last week, the market attempted a rally on a holiday shortened Friday but the S&P still ended down -1.2% on the week and -7.0% so far for November.

By way of comparison, Wall Street Sector Selector gained 1.67% last week and is down -3.3% for November.

What I said last week still holds true this week: “Overall market risk is very high and strength is weak.”

How We’re Doing

We gained ground this week as our two open positions aren’t closely correlated to the S&P and so went up as the S&P went down.

Year to Date we stand at +20.62% compared to +1.7% for the S&P500.

The market is at a crossroads. It is extremely oversold, and either we’ll see a bounce and a resumption of the upward momentum or we’ll continue downwards into a new bear market.

The Week Ahead

The week ahead is a busy one with many potential market moving reports.

Reports we’ll be watching are:

Existing Home Sales—Tuesday
Case-Shiller Home Price Index—Tuesday
Durable Goods Orders—Wednesday
Fed Beige Book Report on Economic Activity—Wednesday
New Home Sales—Thursday
3rd Quarter Revised GDP Report—Thursday
October Construction Spending—Friday

Sector Spotlight

Leaders:

Energy
Commodities
Agriculture
Bonds

Laggards:

Asia, led by China
Home Construction
Finance
Real Estate

I hope you had a wonderful and peaceful Thanksgiving Holiday and weekend. We had a wonderful day with by big son home from college and just the four of us together. With kids off to college or grown, your family changes and its nice to regroup into the old unit and laugh about bygone days and good times we shared together.

We celebrated with all the usual waistline busting traditions and cheered my young son who brought home straight As on his first high school report card. Mt. Bachelor is open for skiing and I’m waiting impatiently for my elbow to heal so I can make a few early season turns.

Wishing you the best for a peaceful Sunday and week ahead.


Your partner in prosperity,

John Nyaradi
Publisher
Wall Street Sector Selector
http://www.wall-street-sector-selector.com