Sector Performance: Upside-Down you are Turning Me

Well- there goes all of our buy signals confirming one another. The one thing we did get right is that the market is looking to Washington, D.C. for direction. Yesterday investors didn’t like what they heard from Tim Geithner. We agree with Larry Kudlow that the Treasury Chief is going to have a difficult time establishing any credibility because of his failure to pay taxes and his lame excuses. It’s critical for the markets that everybody from Main Street to Wall Street has confidence in the nation’s economic team. Clearly Geithner has a long way to go to earn our trust. This administrations bumbling start hasn’t provided the backdrop for much confidence either. We hope that it changes.<.p>

It’s not surprising to us that this week industry chart analysis revealed more sell signals than buy signals. We are starting to feel a little Bipolar. One day it’s all signals point to up. The next day it’s the indexes are tracking towards testing the November lows and the cycle repeats. It’s dizzying.

The sectors we would avoid right now include:

Airlines

Beverages

Fixed Telecom

Food Retail & Wholesale

Reinsurance

US Waste & Disposal

Home Improvement Stores

A couple stocks look especially dangerous to us right now. Based on our Technical Analysis, theses stocks could be headed much lower in the near future. But… since up has really meant down and down up these days, who knows?

The Coca-Cola Company (KO)

Pepsico, Inc. (PEP)

Waste Management, Inc. (WMI)

Waste Connections Inc. (WCN)