Louise Yamada: One Sector Could Outperform U. S. in 2013

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Jeff Macke of Yahoo Breakout interviewed renowned technical analyst Louise Yamada yesterday. Back in August, Yamada said the bull market was becoming “long in the tooth” [link]. Yesterday Yamada noted that U. S. indexes were doing well, but there was one sector of the world markets which had recently outperformed the U. S. and could continue its dominance in 2013.

Yamada stated, “we’ve had about two years of underperformance for the emerging markets during which the U.S. outperformed, now it looks like they are trying again to outperform.” This is one of many rotations that are going on now that we’re entering 2013, she said.

Yamada said U. S. indexes have broken a relative 2-3 year uptrend and are now underperforming the world and could see a near-term pullback, or sideways action for awhile. She added the four year cycle indicates there will be a bottom in 2014; maybe later.

Yamada said the technology and financial sectors could continue to rally, but investors need to be selective. “Look what happened to Microsoft and Intel,” she laughed. But the NASDAQ completed its 8 year base in 2012 and has exceeded its 2007 peak so it has completed its “technical repair,” she added.

Yamada recommended the Financial Select Sector SPDR (XLF).

Source: Yahoo! Breakout

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