(By Rich Bieglmeier) As Wall Street gets back to work following a volume-less summer, investors should be wary. September has been tough on investors as it is the worst performing month historically. Its average return for the last 60 years is underwater, sporting a minus 0.5%, according to the Stock Trader's Almanac.
However, the indexes are likely to be kept afloat until next Wednesday, September 12, when the Federal Reserve announces its easing intentions. As evidenced by the stock market's run, the street has bet on QE3.
Once Ben reveals the central bank's plans, the market is likely to turn to the economy, October earnings, and the election for direction.
iStock is a bit concerned, with September's history and the fact that the NASDAQ, Dow, and S&P failed the test of breaking out to new highs in mid-August. The reversal just hardens the year's highs as resistance.
For now, it's more important to be selective in terms of where you add new money. Should the market U-turn, investors might also consider subtracting from the weaker sectors.
Overall, gold, silver and United States Gasoline (UGA) have the breakout look on their charts; although, the metals could be near short-term relative strength peaks. A little pause or slowdown could be coming, but the technical indicators say they could be heading higher. If there is anywhere we would start thinking about placing fresh money, it would be in one of the three.
iStock also witnessed a pause in large-cap growth stocks outpacing everything else. It's not to say that it's over, but mid-cap growth did look stronger in the week that was. Value stocks, on the other, still look like laggards.
Until the indexes break loose and run away from the 2012 peaks, iStock believes investors might be wise to play it safe. You might consider buying an exchange-traded-fund from our bull lists, and shorting an equal dollar amount of and ETF from our bear sectors. As long as the buy outperforms the sell, no matter what stocks do, the trade can profit.
EMERGING BULL: Industries with positive technical analysis traits that are in the early stages, indicating possible above average returns in the near-term:
Platinum & Metals
MATURE BULL: Industries that have outperformed and their charts suggest the above average returns could continue:
MATURE BEAR: Industries that have underperformed and, based on their current chart patterns, could continue to lag:
EMERGING BEAR: Industries that have fresh negative technical analysis set ups and could have subpar performance in the weeks ahead:
Gas & Water Utilities