Bear Bumpin’

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This week, only TAL Education Group (XRS) met our stock screen criteria –  and is nothing to consider buying given the dominant bearish environment for U.S. equities.

We’re staying bearish for:

  1. Lack of upside leadership
  2. Lack of accumulation.
  3. All major indexes are traveling below their 200-day SMA’s.
  4. And most importantly, we’re not getting anything on our screens.

No point putting bullets in the air with no targets.

The above chart shows the Weekly version of the S&P. It would be just like a bear market to see a sharp rally about now. If it happens, watch where the money flows. Funds looking to get defensive will lean on utilities, maybe some healthcare, probably some sturdy and boring names.

On the macro side of things, it’s well recognized future earnings are under pressure with higher rates expected from the Fed and general weakening in the global market.

Last week WD was mentioned here for its breakout potential and its happening. This is counter to the strategy. It’s aggressive. Stay safe. Quick stop out of VNDA two weeks ago is a reminder. Losses are ALWAYS minimized. Winners are always given room to run.