Wednesday, February 4, 2009


Conventional wisdom would tell you that after we get a meaningful bottom (which we might have gotten November 20 but nobody knows for sure), either financials or consumer discretionary stocks will be the early leaders in the new bull market.

It might in fact be the financials since this is where the government is applying the pressure. With the ever diminishing dividends, caps on compensation and a very punk lending environment, extended upside in the financials seems unlikely.

The technology component of consumer discretionary has been making noise of late and yesterday acted very well as the chatter out of Asia post the Chinese New Year included talk of rush orders and gave a better tone to the PC supply chain. Commodity spot prices had a better January. This is certainly a sector that knows how to bottom - they've seen a lot of cycles - including a doozy less than a decade ago.

I'm not calling a bottom but tech is where I'd be looking.

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