Beware This Sector With No 'Bullish' Stocks

My colleague Joe Austin recently shared some of the perils of blindly following the "buy and hold" mantra in today's market... But you might know someone who would "never sell" a particular stock. I know folks with that kind of mindset. [Chaikin PowerFeed]( Beware This Sector With No 'Bullish' Stocks By Vic Lederman, editorial director, Chaikin Analytics My colleague Joe Austin [recently shared]( some of the perils of blindly following the "buy and hold" mantra in today's market... But you might know someone who would "never sell" a particular stock. I know folks with that kind of mindset. In decades past, this might have made sense. After all, household names like consumer-goods company Procter & Gamble (PG) and telecom firm AT&T (T) dominated the market. They provided goods and services. And their recipe for stock gains was simple... Straightforward companies like those produced more goods and services at better prices. Their margins grew. And they returned more value to shareholders. It was a simpler time. Now, some things never change. But there's no question that today's market is a little different. For example, tech companies run unprofitably for years... Amazon (AMZN) famously was "unprofitable" from 1994 through 2003. The company expected investors to understand that one day, it would just "flip on the money switch." So I understand if you yearn for "buy and hold" companies. But folks, one sector is packed full of "simpler" companies. And today, it's the worst sector in the Power Gauge. Let's take a look... Recommended Links: [Future of AI Hinges on a Totally Different Investment Story]( Most investors continue to chase the obvious AI stocks to new highs... but senior analyst Dan Ferris argues a totally different group of stocks has EVEN MORE potential. Inside his brand-new briefing, Dan shares we're seeing the exact setup that occurred before the dot-com crash in 2000... which sent this same sector soaring while the rest of the market crashed. [The full story will surprise you](. [The No. 1 Stock for the Rare 'Millionaire Window' Opening NOW]( According to Wall Street legend Whitney Tilson, an extremely rare window in the markets is about to open. It's an often-misunderstood market setup only seen 13 times since 1920. The last time this happened, it minted a million brand-new millionaires – in a single year. But Tilson says this unique window in the markets could close much sooner than anyone realizes, leaving most investors in the dust, while making a select few incredibly rich. Get the No. 1 stock (with 500%-plus upside potential) [for this rare market event now](. Now, I'm betting you haven't guessed which sector we're talking about. After all, just about no one is thinking about these stocks. But that's the problem. In today's market, they're just too simple. I'm talking about the materials sector. In the Power Gauge, we track it through the Materials Select Sector SPDR Fund (XLB). And as I mentioned earlier, it's currently the lowest-ranked top-level sector in our system. That's because of the sector's Power Bar ranking. Take a look... As you can see, the Power Gauge doesn't rate a single stock in XLB as "bullish." Nineteen of the fund's holdings are stuck in "neutral" mode. And eight earn a "bearish" or "very bearish" rating. Let's use chemicals and plastics producer Dow (DOW) as an example... Dow is exactly the kind of household name you would think to "buy and hold." And its business should be straightforward. Despite that, the broad market has clobbered Dow in recent years. The chart below shows the big underperformance... Over the past five years, Dow's stock is only up about 21%. Meanwhile, the broad market has soared roughly 98%. If you had bought this obvious blue chip back then and held on this whole time... the market would have left you in the dust. And right now, the Power Gauge gives Dow a "very bearish" rating. Folks, this is the crux of the problem investors face today. You don't need to whip in and out of positions. But simply buying and holding a "good name" isn't enough. One look at Google parent Alphabet (GOOGL) in the Power Gauge makes this clear... Alphabet has soared about 169% over the past five years. It has obviously crushed Dow over that same time frame. And it has also beat the broad market. But even then, you can see clearly on the chart that the Power Gauge would have helped you avoid the worst of the "tech wreck" in 2022... Just before that year started, the Power Gauge slipped firmly into "neutral" territory for Alphabet. And you can see, using our proprietary measure of relative strength, that the stock was clearly underperforming the broad market for just about all of 2022. As I said, you don't have to whip in and out of positions to take control of your portfolio. Your strategy can be as simple as using a tool – like the Power Gauge. You just need to know which way the "wind" is blowing. For example, the wind isn't blowing in the direction of materials right now. Then, make sure you don't blindly fall into a "buy and hold" trap. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +1.01% 11 14 5 S&P 500 +0.69% 165 262 67 Nasdaq +0.78% 24 59 17 Small Caps +0.22% 492 1029 399 Bonds -0.56% Information Technology +1.12% 21 40 4 — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Information Technology +3.87% Financial +1.37% Industrials +1.06% Energy +0.99% Communication +0.32% Health Care +0.29% Discretionary +0.27% Staples -0.57% Materials -0.75% Real Estate -2.01% Utilities -3.28% * * * * Industry Focus Homebuilders Services 16 16 2 Over the past 6 months, the Homebuilders subsector (XHB) has outperformed the S&P 500 by +1.98%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #4 of 21 subsectors. Top Stocks [rating] MHO M/I Homes, Inc. [rating] PHM PulteGroup, Inc. [rating] DHI D.R. Horton, Inc. * * * * Top Movers Gainers [rating] NCLH +10.91% [rating] CCL +7.05% [rating] RCL +5.26% [rating] GLW +4.8% [rating] SMCI +4.28% Losers [rating] CEG -6.12% [rating] NRG -5.34% [rating] BA -3.41% [rating] VST -2.95% [rating] WDC -2.55% * * * * Earnings Report Reporting Today Rating Before Open After Close DAL DPZ No earnings reporting today. Earnings Surprises [rating] AZZ AZZ Inc. Q2 $1.37 Beat by $0.06 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2024 Chaikin Analytics, LLC. All rights reserved. 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