Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Jeff Saut: Did the Dow Flash a Buy Signal?


The only way to buy right here is with a short-term downside hedge.

Editor's Note: The following article was written by Raymond James Chief Investment Strategist Jeff Saut. It has been reproduced with permission for the benefit of the Minyanville community.

Obama's health-care plan, as currently proposed, is DOA (dead on arrival): There are too many political, corporate, and popular objections to such a plan, which was why it was delayed last week. Maybe that's why some of the health-care stocks sprang to life.

And many of the smaller banks have nefarious off-balance-sheet items that are going to be brought back on to the balance sheets, thereby causing numerous bankruptcies. Accordingly, one should be very selective on financial stocks.

While the President's health-care setback was a major topic of the week, by far the most common question I received was about whether a Dow Theory Buy Signal was registered last Thursday. Consequently, I would say:

If you listen to Richard Russell, longtime keeper of Dow Theory, that was indeed a buy signal. Indeed, Dick Russell is using the June closing reaction highs of 8799.26 (June 12), and the June 11 close of 3399.88, for the DJIA and DJTA, respectively.

He observes those levels have now been bested and therefore has replaced the bear figure at the top of his market letter (it has resided there since December 16, 2008) with a bull figure.

I have a great deal of respect for Dick, having read his missives on and off since 1971. I particularly remember his brilliant call on the beginning of a new bull market in December of 1974, when he targeted the low and opined that the bull market would be led by the steel stocks. That was indeed prescient, as US Steel (X) gained nearly 300% over the next year.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos