As the year goes along, the positives for the market in my opinion continue to dwindle, housing continues to get worse and once the summer season ends typically housing sales slow anyway, poor credit appears to be beginning to spread from subprime which is a small sector to other areas of credit including credit cards. And finally, earnings seemed to have slowed even more. In my opinion, only one DOW 30 stock is truly undervalued and that is AIG. What sectors do I like going forward here, not many, I love finanicals but am concerned that the bad news is just starting. Bank of America at under 48 looks great on paper but I thought the same thing at 55, then 52, then 50. Housing, I thought Meritage (MTH) looked attractive 31-33, now its a shade under 22. Retail, Wet Seal is another that on paper looks nice, but I can see it going well below $5.22 as of right now with all the housing weakness. Parents are tightening the pocket books and clothes for teens is not a priority. Will retail see a bump with back to school and the holidays - possibly. The only real sector doing well for me is the deep sea drillers like Noble (NE) and Global Santa Fe (GSF). My Chinese stocks continue to perform as well. So what's my strategy at this point, I am going to hang tough in financials and look to buy value strategically when I can find it and thats getting tougher and tougher.
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