Mostly: Classical

[Sexton O Blake]

NBR Market Monitor--Stan Weinstein, editor and publisher of "Global Trend Alert,"

March 10, 2006 - (NBR-Nightly Business Report on PBS)

Ed: Yes over a week old - but I just watched it this weekend. He does not provide stock picks but instead sectors along with some cautionary comments... thought this week in particular was post worthy --

Last "(INAUDIBLE)", of course, was the S&P 500...

cheers!
B


PAUL KANGAS: My guest market monitor this week is Stan Weinstein, editor and publisher of "Global Trend Alert," an advisory service for institutional investors and Stan, welcome back to NBR.

STAN WEINSTEIN, EDITOR AND PUBLISHER, GLOBAL TREND ALERT: My pleasure, Paul.

KANGAS: How do you view today`s big rally on Wall Street in reaction to the employment report? Was it justified or overdone?

WEINSTEIN: I don`t worry about justified. I try to evaluate. To me, it`s a case of less than meets the eye. Even though the Dow had a nice rally, up over 100 points, all you have to do is see that back last July, you had 500 stocks hitting new yearly highs. And today there was like 115, 116 and the S&P is much higher today than it was last July. It`s a warning.

KANGAS: When you were with us late this past July, as a matter of fact, the Dow stood at 10,600 and you predicted stocks still had room to go higher, but the market was becoming very selective. The Dow did indeed go higher, now well above 11,000 -- congratulations on that call -- and it`s indeed selective. Now the question is, is there more upside for stock prices? Is the bull still alive?

WEINSTEIN: It is alive, but I think we`re in the top of the ninth inning and we have to play very, very carefully here. There are a lot of stocks, in my opinion, have already seen the high for the cycle, irrespective of what the Dow does. So we have to be a very careful selective player here.

KANGAS: Give us some positives for stock.

WEINSTEIN: There are a lot of ones, but the ones that I especially like aerospace, pollution control, those are good areas. I also like telecommunications and then Paul, some of the defensive groups are coming on here, like the foods, the soft drinks, household products and also ones, when they start to go with defense and sit on the lead (ph), that`s warning us that we have to be a little careful here.

KANGAS: Which ones are the negative?

WEINSTEIN: The one I`m most concerned about which a lot of fundamentalists like are the home builders. I know that they look cheap on fundamentals, but the charts look very dangerous (INAUDIBLE) to be a seller in the home builders. I also think (INAUDIBLE) related stocks, many of them look like they`re topping out. I would not want to be buying those issue.

KANGAS: So those are the sectors you would avoid.

WEINSTEIN: Definitely. And we were bullish on them, as you know, for quite a while.

KANGAS: OK, now as you correctly forecast when you were last with us last July, the smaller cap stocks would lead the way higher and indeed they did. You were right on that. When are the big caps coming into favor?

WEINSTEIN: Well, I think the smaller, mid will still do well, but to a lesser degree, I do see as I said earlier here, some of these household product defensive stocks starting to come on. So I think some of the big caps will come on a bit, but I still think that in general, the midcaps will outperform, which they`ve done throughout this entire bull market for three years now.

KANGAS: OK. I know you don`t give individual stock recommendation anymore since you retired from writing the professional tape reader, you don`t do that, but except for your institutional customers, correct?

WEINSTEIN: Correct. Six years ago we.

KANGAS: Well, the sectors we know you like and those that you don`t like. But let`s talk about bonds for a moment.

WEINSTEIN: Bonds, I think, have seen the high for the cycle. That means interest rates have seen the low. I do not think this is a time to be an aggressive buyer of bonds. I think bonds are going to head lower in the coming months.

KANGAS: How about high-yielding utility stocks?

WEINSTEIN: This is another thing that worries me. The utilities saw their high last October. Historically, Paul, they top out about six to eight months ahead of the market. They haven`t seen a high. It`s been now 5 1/2 months. I would not be buying utility stocks. I think that`s a worrisome thing about the coming months for the overall stock market.

KANGAS: On your last with us, you were rather neutral on gold, although you felt it was in a long-term bull market. How do you feel about gold?

WEINSTEIN: I said last time, neutral. If you went above 455, it was a heck of a ride.

KANGAS: That`s right.

WEINSTEIN: You got that heck of a ride, now long-term bullish, I think when it recently hit 580, I think that was an intermediate top and I think we correct in the coming weeks, the long term is still bullish.

KANGAS: Do you feel the same, gold and silver will move in tandem?

WEINSTEIN: Yes, but I think silver at this point has a better risk- reward ratio than gold. So I would rather be buying silver. I think it`s where gold was nine months ago when I was on your show.

KANGAS: We just have 30 seconds left Stan. And last-minute thoughts to impart to our viewers?

WEINSTEIN: I think probably the most important thing here of course (ph) is to know people don`t understand is the difference between market tops and market bottoms. Bottoms are sort of a monolithic affair, tops a slowly diffusing thing. If you can be lucky, sell the top day (ph) of the Dow, you will find most stocks have made their high well before that. Look at your charts. If you stock is topping out now, don`t wait for the market to reach a peak.

KANGAS: So we`re near the top, and it`s time to be careful.

WEINSTEIN: Right, one last thing. Watch these levels. 10,600 Dow, 1240 (INAUDIBLE) bearish.

KANGAS: Stan, thanks for being with us.

WEINSTEIN: Always my pleasure.

KANGAS: My guest Stan Weinstein of Global Trend Alert.

http://www.pbs.org/nbr/site/onair/transcripts/060310c/