"Market Monitor"-Mark Leibovit of vrtrader.com.
Friday, November 09, 2007PAUL KANGAS: My guest market monitor this week is Mark Leibovit, chief market strategist for vrtrader.com and welcome back to NIGHTLY BUSINESS REPORT, Mark.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Glad to be here, Paul.
KANGAS: To say it was a rough and tumble week on Wall Street would be an understatement. Now a growing number of analysts are saying the sell- off is a precursor to a major bear market. Do you see it that way?
LEIBOVIT: No, Paul, I do not. The models that we created for the market this year has been pretty accurate. We'll see that in a few moments. But basically the pullback we're seeing here is expected, a little choppiness here in November. A lot of this news related worried about the financial sector. There has been some negative volume as I call negative volume reversals the last couple of days. But it looks to me like this is a retest process of the October lows, maybe going double bottoming back there. But I think overall, the indicators that we're using are cyclical indicators as well, saying this market's going higher and we should see a strong year-end rally and I think a move into a new high next year.
KANGAS: Let's have a look at your forecast model for this year. And as we see, it's followed the actual Dow Industrial Average quite closely. That's a pretty good model and it does show a big rally at the end of the year.
LEIBOVIT: It's unbelievable. It scares me sometimes, look for a March low, look for a top in the summer, look for a sharp pullback, right into August 15th, a bounce into early October and now a little bit of a pullback here into November and then strong year-end. Another thing just to point out, years that end in eight, next year 2008, tend to be strong years in the market. It's also the last year of a presidential cycle which also tends to be positive. So I think the odds are pointing that yes, we're having a correction now. It's looking nasty but we're going higher.
KANGAS: Do you think that the dollar has bottomed and oil is near a topping out? That combination, would that help?
LEIBOVIT: No, I don't think the dollar has bottomed. In fact a down dollar is bullish. The stock market loves a down dollar. Earnings of a good part of the Dow industrial companies comes from offshore business, which is one of the reasons the Dow has done as well as it has. So down dollar is good. It's also good for precious metals which I'm still overall positive on though I can see a little bit of a retracement here after the big push higher. But basically, Paul, the U.S. economy is strong. Yes, the financial sector is weak. Interest rates are coming down here though, they are going up worldwide. As we just mentioned, the dollar is weak which is good for the stock market, a lot of positives out there.
KANGAS: All right, now, on your last visit with us in late May, you gave our viewers six "buy" recommendations. Let's see how they fared since then. Morgan Stanley China Share Fund (CAF) up 42.3 percent. That's a marvelous gain there. Are you still with that fund?
LEIBOVIT: I would take profits here. That's been a huge gain so I would (INAUDIBLE).
KANGAS: OK, how about Yum Brands (YUM)? They've had a two for one split since you recommended it, up 12.3 percent. Still with it?
LEIBOVIT: I still like the stock, yes, but as a trader, after a huge gain like that, these are all profit points that I think you might want to look to lighten up a little bit, certainly after a big run like that.
KANGAS: OK, let's have a look at two of your other picks from last time, China Petrochemical Fund (GNP) up 33.3 percent, very good, and Power Shares Water Source (PHO) up 4.8 percent. Are you still holding those?
LEIBOVIT: I like the Power Shares. That's the water play. That's a good long-term hold. The others I would take profits.
KANGAS: OK, you got two more that you recommended back then, not a loser yet. The Diamonds (DIA) of all the things to be down 3.5 percent. But I think we'll get to that in a moment, but I think you still like them. But Apple (AAPL) has been a wonderful stock and we only have a minute left. Do you have some new recommendations?
LEIBOVIT: Well, as far as the Dow Diamonds, I predicted a 14,100 on my last visit and we got there. But I still like the Diamonds. I'm re- recommending them at this time. (INAUDIBLE) for a move to 15,800 in the Dow which is my next big target, sometime I would say in the first half of next year, maybe sooner. The next one will be the Spiders (SPY), which represent the S&P 500. My target there is 1675 in the S&P, which is about 166 in the Spider itself. I will also buy the quadruple Qs, which is a play on NASDAQ. NASDAQ still going higher. I could see 60 on the Qs. And finally, a uranium play. As you know, I have been a big lover of uranium. And FRG I think is a good token play for a portfolio. The stock's around $12. I can see it around $17.
KANGAS: Mark, do you personally own any of the securities mentioned or have other disclosers to make?
LEIBOVIT: No, I trade and recommend these in the newsletter. I'm pretty much involved with them all the time, yes.
KANGAS: All right. Time has run out unfortunately. Thanks for being with us once again. My guest, Mark Leibovit of vrtrader.com.
