Pre-market futures for the S&P 500 have been mostly flat with a slight upward bias right now. If the dollar strength continues, then one has to wonder how long the decoupling of dollar strength to stock market weakness can go on. Last year strength in the dollar like we've seen the last short while would have sent the stock market into a deep spiral down.
As I mentioned on Twitter yesterday, several stocks that manufacture work uniforms all displayed strength last week, CTAS, GKSR, SGC, and UNF. That strength along with the employment numbers released by the BLS on Friday point to a firming job market, which is encouraging news for the broader U.S. economy.
Back on November 29 of last year I mentioned on Twitter how I was seeing persistent strength in the home builders and some construction materials suppliers. Then on December 22 of last year, I posted a long list of regional banks that were all showing strength on their charts.
Strength in one sector in and of itself is not enough to significantly change momentum. But when one after another starts to move, then the confirmation becomes real. So the signs were there that the economy was picking up a little bit of momentum and that better numbers would follow.
I'm not in the camp that thinks the economy is about to lift off into a new huge boom like we had in the latter part of 1982, but when coming off such low levels, any improvement in economic activity can make a big difference for companies that streamlined their work force and have lean balance sheets.
What I'm expecting to see as the next confirmation is more strength in the labor staffing companies like RHI, MAN, KFRC, etc. KELYA displayed strong price and volume action last week, particularly on Friday.
Here are a few setups for Monday, in no particular order. ALWAYS use stops to limit losses.
(Note: I still like the low priced solar stocks mentioned in earlier posts - HSOL, JASO, TAN, etc)
No comments:
Post a Comment