Investors: Forget the Market Theories; Watch These Two Sectors to Determine Broader Strength
Considering semiconductors are in almost everything consumers buy, and all consumables have to be transported, these sectors typically lead economic expansion.
(The January effect, the quarter-end effect (window dressing), "sell in May and go away," leap-year phenomenon, Halloween Indicator, Super Bowl (AFC/NFC) winner correlation, and let's not forget the lunar cycle theory. We could go on for pages with theories developed over the last few decades. Truth be told, anything can be verified with the appropriate statistical data, and this week, which involves the quarter-end effect, is packed with economic statistics: Tuesday: Case-Shiller Home Price Index, Consumer Confidence, Investor Confidence; Wednesday: New Home Sales; Thursday: Durable Goods, GDP, Jobless Claims, Manufacturing Index; Friday: Personal Income & Spending, Chicago PMI, Consumer Sentiment.)
Ascertaining probabilities based on empirical data – that is, on observation rather than theoretical data – is where my firm hangs its hat. Over the last two weeks we've discussed how the market (the S&P 500 Index (INDEXSP:.INX)) has broken above the technically important 1,425 resistance level. Conversely, our editorials have also discussed the necessity to see further empirical evidence to give credence to the longevity and conviction behind this move. Last week's action, not seemingly apparent in the market's return, was not good as the probabilities leading to the underlying confidence behind this move deteriorated rather quickly.
The information on this website solely=
reflects the analysis of or opinion about the performance of securities an=
d financial markets by the writers whose articles appear on the site. The v=
iews 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 indivi=
dual investor or category of investors to purchase, sell or hold any securi=
ty, or to take any action with respect to the prospective movement of the s=
ecurities markets or to solicit the purchase or sale of any security. Any i=
nvestment decisions must be made by the reader either individually or in co=
nsultation with his or her investment professional. Minyanville writers and=
staff may trade or hold positions in securities that are discussed in arti=
cles 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. N=
othing on this website is intended to solicit business of any kind for a wr=
iter's business or fund. Minyanville management and staff as well as co=
ntributing writers will not respond to emails or other communications reque=
sting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.= span>