Updating my comments of a week ago, I continue skeptical that the market indices have seen the lows of this correction. The background has shown some improvement, but not enough to give me confidence that a healthy advance will begin now from this level. Again, I could easily be wrong.
Also, this does not mean that many stocks have not already seen their lows. There are many good-sized pull-backs among worthwhile companies that have made their stocks reasonable values and worth attention now. That said, my best-guess targets for the S&P remain at the levels indicated last week.
Some stocks could do much worse than that implies in what I think would be the last phase of this correction [or, if I am wrong , in an emerging bear market]. As mentioned last week, Apple, Netflix, and Facebook remain stocks to avoid – among many many stocks, but these were mentioned because of their broad popularity and the likelihood they could be in readers’ portfolios or buy-lists. A short sampling of other stocks to avoid include Tesla, Sotheby’s, Dunkin.
On the other hand, I will add a new name worth considering after Friday’s decline into the area of $130 or less – IBM – and will re-emphasize Abbvie as it drops and the homebuilders and energy companies as they drop. Not offered last week, specific targets among builders could be TMHC, TPH, MDC, KBH.
Chief Investment Strategist