This month’s report focuses on safety as the best bet. And in a bear market and an economy that looks likely to Double Dip, there are few better bets than the Food Products industry.

This report carries 20 tickers which have the safest potential in a bear market as proven in history. And right at the end, I have the usual BONUS! Ticker and this month’s BONUS! Is a real keeper in a bear market.

The Dow Jones Industrial Average lost more than 1,000 points in May which makes bargain hunting “attractive”. However, to take advantage of some of these bargains, caution must be observed and there is no better caution than to stick to super-sized, well established multinational Industrial Conglomerates to provide stability and assurance to your portfolio.

Everything happens for a reason and I am glad I held back till the market went through its gyration this week (May 3 to 7). This left no doubt in my mind that we need safety and consistency in performance now that the market has proven to be volatile.

And there is no better sector than (Consumer) Household Products to give us safety in a volatile market and performance in a recovering one.

This time, I’ve detailed the report with one of the industries within Healthcare that is making waves now and is expected to make a lot more noise in the near future. The industry is Bio-Technology.

In that complimentary February 2009 report, I generally covered the ETFs and some companies that make up that massive sector which was divided into the Healthcare Payors (HMO), Pharmaceuticals, Services and Drug Manufacturing industries.

The Biotech industry was only mentioned in passing with little mention of its leading companies.

This time, we drill down into more detail with more ETFs and individual companies.

Mark Twain once famously claimed;
“If you don’t read the newspaper, you are uninformed;
if you do read the newspaper, you are misinformed.”
So if you believe him, read this report with a pinch of salt!

One of the most consistent performers is none other than the Gaming and Hospitality sector.

The S&P500 Index closed at 1091 last week. This indicates a lost of 45 points from the previous week’s close.

The market had a nightmare in last short trading week. The market tumbled down due to plenty of bad news and uncertainties surrounding the market.

Technically, S&P500 Index had plunge below the 20 and 50 days moving average and 1100 level convincingly, indicate that the bearish momentum is forming. The S&P500 will likely to test 1100 again. Failure to establish above the 1100 level will bring S&P500 down to 1050. S&P500 will likely to have further weakness in the coming week as it broke below the 50 days moving average.

The Plunge Protection Team (PPT) went missing in action on both Thursday and Friday when the market experience heavy selling pressure. Trading volumes were recorded a few times higher than most of the day.

Looking at weekly candles, the S&P500 Index is suggest a negative week. The weekly candle shows a solid fat candle pattern that indicates a further weakness in the coming week. The 1050 levels will be a key support level to watch.

Looking at daily candles, we have 2 huge red candles that punch through 2 major supporting moving average. This indicates that a 3rd red candle is very likely in the coming day.

The immediate support levels are S1: 1050, S2: 1025 and S3: 1000.
The immediate resistance levels are R1: 1100, R2: 1125 and R3: 1150.

In conclusion, the market this coming week is likely to go down again due to the fear in the market. Furthermore, the market will unlikely be able to keep up with the high expectation of earnings from the streets. Overall the market does not look very good in the coming weeks. So once again stay alert and trade carefully.

Lawrence Chua
Patterntradertools.com

Cash is king when there are many uncertainties in the market. Another favorite will be government short-term bond. Lastly, Defensive sectors will also likely to outperform than any other sectors in the coming week.