TradeWinds for June 19th

Even with all the major indexes moving up today, we still see a split market between the Big Cap indexes and everything else.

The DIA was up .25%, while IWM was up .83% and QQQQ was up 1.56%.  While our Slow Momentum indicator remains in turbulent negative TradeWind waters, under the covers you will find that the small caps and tech stocks are in neutral TradeWinds.

All of our momentum indicators a going flat line, so its kinda hard to predict what is going to happen next. Tomorrow is option expiration day, which can always lead to all sorts of extremes (although sometimes it is just a blah day).  I still sense that the general feeling of the market is that its oversold and resisting any further down moves. If sentiment changes on the big caps, we could see a great leap to the long side.

Looking at the sectors oil and energy are leaders, but there is weakening, so I think there is a correction about to set in there. Agriculture remains strong and biotech is making a stealth surge. Midcaps and small cap are in the neutral category but showing signs of strong base formation, so I would watch them for a thrust to long side during the summer.  Precious metals are also hanging tough in the neutral TradeWinds and even showing some strength of late, I am not convinced if that is just the doom and gloomers keeping it afloat or if there is something more to the move, but its worth keeping an eye on.

Let me add this final editorial comment. I believe that the election in November is going to be one of those times in our history when there is a dramatic shift in the body politic and general thinking of the country. Call it the tipping point theory or whatever, but I think we will find that 2008 goes down with 1860, 1932, 1960 and 1980 as elections that truly shifted the direction of the country. Miss Market is also aware that there is going to be a new man on the block and is trying to position herself for what he will bring.

I you haven't guessed, I do believe that Barrack Obama will be the next President.  The mega big caps are probably not the place to be given that outcome - particularly mega energy companies. Entrepreneurial, innovative small cap companies probably will be in favor, particularly in alternative energy areas. Mega healthcare is probably not a good investment, but again, innovative health technologies or services will be - which could explain the positive movement of the biotechs as of late. 

It should be an interesting six months for politics and investing.