back to blog homepage

2006-07-07 :: Return to the Markets

I’m back from my hiking/whitewater rafting trip to Yellowstone, Jackson Lake, and Jackson Hole.  What a beautiful, breathtaking part of the country.  But now that I’m back, its time to look at our strategy and see where we are.

Traditionally, the late-July-early-August time period is a weak one for stocks.  We’ve been selling certain weak sectors into the strength of the market over the last couple of weeks and buying the three growth areas that will survive any sort of economic downturn because their earnings catalysts are beyond the current economic cycle:  energy, metals, and infrastructure.

My goal is to generate some cash prior to the late-July-early-August time period so that we can take advantage of any short-term pull back in these sectors, adding to established positions or opening new ones in client accounts.  My best assessment of the situation looking at the technical indicators is that mid-late next week, we could see the recent strength start to top out and the seasonal weakness set in.  When that happens, I think the tech sector – particularly the companies that make consumer-related tech products – will be hit particularly hard.  So, we will using those companies as a source of funds to reinvest into the three favored sectors.

Have a great weekend!