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Markets. He feels that the correction is healthy. It is necessary to have a healthy consolidation, a bit of a pullback, blow off some steam and shake “the loose leaves from the trees”, then continue to move forward. Everything gets a little ahead of itself. For example, Disney is down from its peak, but doesn't mean that it is a bad stock or company now. It just means that it got a little ahead of itself, so it was time for a pullback. The same thing has hapened to the market or sector.

Will the correction be higher than 10%? He recommends not getting ahead of yourself. He watches and listens to the market and doesn't try to tell the market where it should be going.

Markets. He is focusing on domestic facing companies, more domestic consumer interest companies. Focusing inside the US is a better strategy right now.

Will interest rates go up in September? We have a strengthening labour market, poor inflation firming not advancing too aggressively and reduced energy costs. There is a year lag when everything is balanced out. When you take these things into account and the need to move to policy normalization, the Feds have to do something in time. Regarding risk asset pricing, people are very nervous. People are sitting on their hands and waiting. There is a key note of uncertainity.

Does United Tech's recent pullback provide a buying opportunity? It is a risky market right now. He believes that it is best to look at the relative strength of the sector. Looking at market leadership. Industrials for the past year have been underperforming the market. They have been invested in UTX in the past. You have a good theme. They have non-res. construction, aerospace leverage, good industry, very cyclical, but good. It is well run. Moderate expectation on the top line, but great capital return. Feels that there are better places to be in the market though.

Wells Fargo is as good of a bank that you will get in the US. They are better at balance sheet management than anybody in the business. Through multiple cycles, manages interest rate risk better than anybody in the industry. They have a well diversified balance sheet. They manage credit well. They manage interest rate risk well. He thinks it is a great place to be even with a consolidated role.

Disney is a content monetization machine. They have been invested in Disney for a number of years for all good reasons and they are happy with it. They are the best in the business. Currently down because they got a bit ahead of themselves. Doesn't recommend that you buy it right now because it is in a negative market cycle. It is a cyclical company, half the revenues are cyclical. Have to be careful. They are happy owning it right now.

Markets. You want to be a little suspicious in August because volumes are normally light. Usually trading desks are being manned by younger people who are trying to move up. There are a bunch of areas between July and October that are good to be in. S&P 500 is still not in correction territory. He has been looking for that 2000/4000 level which happened around March/April. It has now broken down to the $1970 level. Are we going to have to visit the $1800 level? That is what next week will be about. Will it be broad-based? Will it be the pro-cyclical areas? Next week will be very important and what he expects to see is that it will probably keep pushing these downward levels to an extreme. There will be certain areas that might buck that trend, and those are the areas that he wants to identify, and which are good places to be. If the US joins the party, he expects there will be some bigger positions in some of those defensive spaces.

There are a couple of places where we could’ve hung our hat. It looks like about a week ago, where it bounced right up to that, but then was repelled back down. Watch the level at around $10.70 to see if it will hold there, and that would be a sort of place to hang your hat on.

The best of a bad group. The leaders will be the ones to turn. Chart shows a few spots where you can hang your hat on at around $34. This would be a pretty decent level, but you also have to be prepared to pay something that is closer to $30. Chart also shows some overhead resistance, but once it gets above the descending triangle, that would be an indication you could add to this. Consider dividing your position into 3 and putting in an initial position to get close to the Stop level, followed by adding another one. But be prepared to exit there. Add your 3^rd position when it breaks the upper band of the symmetrical triangle.

The real estate sector is one of the top 5 on a weekly data and in the top 7 of the monthly data. That is a really good stat. Chart shows a long upward trend that has been bounced off many times, indicating buyers are very, very interested there. There is also a wedge formation and you want to see it break out. Thinks it is a really good risk from here and recommends it.

A good space to be in, but there was a big downdraft today of 4%, a little bit more than the markets. You want to watch the level of around $122. Chart shows a little triangle forming, and you want to see that break out. He owns Potash (POT-T) which is a little more conservative. If you don’t own it, it is probably a good time to add. It is strong seasonally until the middle of the fall.

This is one area that has been absolutely crushed. It looks like there could be a downside target of around $4. That doesn’t mean it is going to happen, but certainly the biggest thing that could change this is a change in the US$ which would sort of lift these up. We don’t have a supply issue as much as a pricing issue.

(A Top Pick Aug 24/14. Up 12.93%.) He sold half of this in December and the other half in the spring. His total return was around 32%. The risk/reward now is very good and he took out a half position at around $36 recently.

(A Top Pick Aug 24/14. Down 26.92%.) Had purchased this August 17 and sold it October 22 for a loss of 4.5%. It is something that is starting to find a base and he is starting to poke around this whole space. There are a lot of really good names that warrant attention.