The stock market over the last month has been much like a thrill ride at an amusement park with violent swings both down and up. This increased volatility is associated with reversals in the short term trend, which most recently changed from up to down. After working their way higher for most of the year, the major stock market indexes (the Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite) peaked in mid-September and trended sharply lower until just recently. Just when it appeared the downtrend was beginning to accelerate, the market had an impressive intra-day reversal and has rallied almost every day since. My work suggests that the low for the correction is in and that higher prices are likely by year end. Use setbacks in the market to add to positions to stock holdings that have held up well during the decline. I will not make any large bets on either side of the market until the trend becomes more apparent.
The most attractive sectors in the market are those related to the healthcare industry, led by the biotech sector. The least attractive sectors are those related to energy. In particular, oil and gas related groups should be avoided for now.
Disclaimer: Rocket Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make or offer or solicitation for the sale or purchase of any products