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Push on this market and he sees the potential for a sustained rally here to explain -- -- alimony director of research at -- investment research.
-- explained to me how are you bullish in this environment.
We're really odd given some very actually given some abnormal headlines.
-- -- this year regarding Europe -- -- you know again today with the downgrade -- that -- Moody's put in Germany on credit watch for downgrade.
Very an -- downgrades but a very normal market if you think about it we come in.
Into the second half of the year yes and 56%.
So despite -- Eight what's pretty normal a year price action wise.
The short stood the the pessimistic really built up a huge position.
The guest S&P 500 component stocks I mean what were seen since -- -- four fours a short interest -- -- Is not unlike what we -- in May through September of last year and if you remember September of last year October.
That's a round when we bottomed preceding a 25%.
In the S&P over about four to six month period but -- how concerned are you about some of the guidance we're getting in the -- second quarter report some UPS today slashing its full costs -- -- exactly facility -- optimism.
-- it can't I mean it's very it's actually it's beyond it's been a very mixed earnings season yes you can point UPS's -- negative.
And I'll point don't Under -- as far as a positive report.
Today sell you know very mixed you know I think the good news for the -- however -- the fact that.
We were bracing coming into this earnings season for a very poor earnings season and out whenever I was reading anyway.
Investors were bracing for a very negative.
Season so again even though the numbers haven't been great.
Yes and he has hasn't really sold off despite what's -- what can be perceived as very porn numbers very poor guidance we know there's a lot of uncertainty is a presidential election -- there's lots of questions of chaos about taxes health care and so on but what sectors do you like right now.
-- -- Does the sector is that we've been bullish on remain bullish on although that we do see a little more optimism creeping in which is -- -- -- concern isn't -- home building housing.
I mean here's a group if you look at the the benchmark -- exchange traded -- That iShares Dow Jones US home construction index of 42% year to date.
You look at a lot of these stocks.
Big short interest.
-- A lot of room for upgrades for example from a price action standpoint than 75%.
Of the stocks in that group -- above their 200 day moving average.
Yet you only have 45% fire ratings have less of that and sell side research.
Analyst have -- -- so.
Strong price action strong earnings.
I get short covering potential upgrade potential so from a contrarian perspective we like that.
Economy between the price action and sentiment I've which -- sectors would you avoid right now financials perhaps.
I'm from financials is one sector I mean a lot of uncertainty fundamental uncertainty.
-- price action -- group.
Here's -- -- like JPMorgan despite the -- price action despite the uncertainty a lot of buy ratings have room for downgrades.
Gold mining is another sector that we do not like.
Opposite of the home builders -- 9% of those stocks are trading mother 200 day moving average that you have nearly 65%.
By ratings and we know the hedge fund community is up to their eyeballs in these gold mining stocks the price action isn't there and could be a cause for the reasons why some of these hedge funds are underperforming.
-- very good I love your optimism top -- thank you so much for joining us really appreciate it.
Thank you for ammunition.
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