Get Ready to Buy Low!

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(in intra-day report, originally published on August 1, 2014)

We’re experiencing a market correction.  Let’s review the charts of the major market indices, to determine which index is showing the most strength, and let’s prepare to buy low.

The NASDAQ composite broke below its 50-day moving average today.  There’s price support at 4300.  If the average stops falling there, and settles into a trading range, it would be time to accumulate small-cap and aggressive growth stocks.

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NASDAQ Composite   six-month chart   08-01-14

NASDAQ Composite six-month chart 08-01-14

Chart courtesy of StockCharts.com.

 

The S&P 500 index is pulling back to support levels which were established in March through May 2014.  As soon as the index bounces a couple times at support, around 1900, I would consider it safe to buy mid & large-cap growth stocks, presuming that the individual stocks’ charts are also relatively bullish.

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S&P 500 index   six-month chart   08-01-14

S&P 500 index six-month chart 08-01-14

Chart courtesy of StockCharts.com.

The Dow Jones Industrial Average appears to be falling toward support levels established in April & May 2014.  You can see on the chart, below, that the Dow bounced three times between 16,360 and 16,400, before reaching new highs again in June.

If the Dow bounces a couple times at that same point again, I would consider it safe to buy large growth & income stocks, presuming that the individual stocks’ charts are also stable.

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Dow Jones Industrial Average   six-month chart   08-01-14

Dow Jones Industrial Average six-month chart 08-01-14

Chart courtesy of StockCharts.com.

The NASDAQ is showing more strength than the S&P 500, which is showing more strength than the Dow.  Investors who want to bargain hunt during this minor market correction will find opportunities in the following areas:

  1. NASDAQ stocks, including small-cap and aggressive growth mutual funds, will likely rebound more quickly than S&P and Dow stocks.

  2. Lock in even bigger yields on big-dividend stocks during market corrections.

I would be comfortable buying low, in the near-term, on any of my favorite stocks, after the market averages settle into new trading ranges.

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All eight 2013 & 2012 Goodfellow LLC stock portfolios dramatically outperformed both the S&P 500 and the Dow! View our outstanding 2013 and 2012 stock portfolio results.  

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Send questions and comments to research@goodfellowllc.com.

Happy investing!

Crista Huff

President

Goodfellow LLC

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