Brenda Buttner and was joined by: Gary B. Smith, RealMoney.com columnist; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; and Price Headley, investment strategist at BigTrends.com.
The numbers don't lie. Since 1950, September has been the worst month for stocks. As a matter of fact, if you put those months back to back, you would have a 32 percent loss on the Dow.
In addition to that, for the first time in 6 weeks the Dow finished down for the week.
But Tobin doesn't think this September storm is going to be the rule this year. He is buying stocks because everyone is so pessimistic about the market. Also, any good employment numbers will be a big boost because we have not been creating jobs.
Gary B. pulled up an NYSE 40 day moving average chart, dating back to 1999. This chart shows the percentage of stocks above their 40-day moving average. Gary B. said when only 25% of stocks are above this moving average, it is time to buy. However, when 70 percent are above, it is time to sell. The chart is inching towards 70 percent and Friday's close was in the mid 50s, so he sees more downside than upside in September.
Scott sees the market its spinning wheels in September. He thinks the Dow is going to test the mid 8,000 level, not going down to 8,000, but not heading up to 9,500 yet.
Price thinks the market will head lower in the short-term, especially as the 9/11 anniversary approaches. He said investors are apprehensive about another attack. He disagrees with Scott, and thinks the Dow will hit 8,000 during the next 2 months, but this will present a great buying opportunity.
Tobin, Scott, and Price picked stocks each says will be a winner even if we have another losing September.
Price selected data storage company, Imation (IMN) as his September Survivor. He recommended the stock because it is growing earnings fast, beat analysts expectations, and is one of the few tech stocks making a new 52-week high. Scott also likes the stock, but Tobin does not.
Scott picked Tractor Supply (TSCO). He said it is expanding dramatically, has great earnings, and even though it's been up a lot recently, it's going to $100 in the next 5 years. Tobin likes the stock, and Price said he would buy it for the long-term.
Tobin said Capital One (COF) is his September Survivor because it has been unfairly hammered and is the very best at issuing credit cards. He thinks it will go to $50 in 12 months. Scott likes the stock, and Price said he would buy it, but would sell in the mid 40s.
Ask the Chartman
Gary B. came back, and inspired by Labor Day, decided to look at the top five American employers (aside from the U.S. government).
Far and away Wal-Mart (WMT) is the nation's largest employer, employing almost a million and half Americans. But the Chartman does not think the stock is worth owning just yet because it rallied strongly the past few weeks, but got pushed back. He said do nothing now, but buy the stock if it closes in the mid 50s.
Next up, McDonalds (MCD) with almost 400-thousand employees. The stock fell in July, and is now forming a triangle. He recommends to do nothing with the stock until you see it break up or down.
Know why you see so many brown trucks in your neighborhood? Because a lot of people work for UPS (UPS)! And the Chartman likes the stock because it has been in a steady uptrend since the 2001 sell-off. He thinks it would be best to buy the stock if it sold off a bit.
Keeping Detroit in business, General Motors (GM), especially with its 365,000 employees. He likes that GM broke a downtrend it's been in since May. But he thinks its price may have risen a little too quickly for those gains to hold. He said wait until the stock hits the low 40s before buying. (GM closed on Friday at $47.86.)
And another big automaker keeping America employed, Ford (F). The Chartman does not like this stock's chart. He said Ford's chart just continues to be ugly, and is locked under two downtrend lines, dating back to May.