Be Prepared for a New Bullish Move

04/02/2007 12:00 am EST

Focus:

Mike Turner

President, Mike Turner

Michael Turner, president of Turner Trends, says that despite some signals that would suggest caution, the next move in US stocks will be to the up side.

The real question continues to be whether this recent upbeat market is a harbinger of a market bottom, or just a pause before moving lower.

My optimistic side wants to believe we’ve seen the bottom of the recent sell-off [and] that the market is now poised to move into a long, protracted bull market phase. But, there are just too many potential potholes in the economic road ahead to be totally optimistic.

I am concerned that when the earnings reports start coming out this month, they will trigger more selling than buying. Just about everyone agrees that the economy is slowing in most sectors, but I am not so sure that investors are actually prepared for the news.

Also, I am concerned about the housing market and the ripple effect it is having on all levels of consumer spending.

There is an old adage that says, "Sell in May and go away..." This year may turn out to be a great year to take that saying to heart.

I haven't seen the numbers for this week, but I suspect we will see a significant reversal in investor sentiment as it moves to the bullish side of the equation. We will have a lot of stocks to choose from for filling in any open positions in the portfolios.

I will continue to look for more defensive plays--stocks that do well in the current market and will hold up better if we see another run toward the 11,722 level on the Dow.

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