Time for a Turn?

 | Nov 20, 2013 | 11:38 AM EST
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What if oil is bottoming? When I talk with Dan Dicker -- the best there is, the man who nailed the refiners at the bottom and pushed Devon Energy (DVN) before the surge -- he pointed out that the price of oil worldwide hasn't fallen. We have had a glut in this country that may or may not be fixed depending on that darned Cushing, Okla., bottleneck again, but I believe the price is artificially low "here," not artificially high "there," which means this underperforming group could gallop again.

Remember what kind of market this is. We are constantly rotating in and out of stocks and sectors. Three groups that have lagged lately are biotech, oil and housing. Try as I may, I can't come up with a pattern that indicates why these areas might be done going down. There's no linkage.

But cases could be made for all three. The world price of oil better. There's no end to taper as per what Fed chief Ben Bernanke said yesterday and what Janet Yellen's been saying. And we've had approval after approval in biotech -- yet the group has done nothing lately, in part because the two most important leaders, Gilead (GILD) and Celgene (CELG), haven't been acting well. But Gilead got a nice boost this morning from Citi, and have you noticed that Celgene's on the move, too?

Housing is very hard to call here. Existing home sales for October were not great. But the price of existing homes continues to rise, giving the homebuilders a chance to reaccelerate. The sudden surge in interest rates has been digested and October might be a short-term trough. That means these stocks have a reason to go higher.

More important, though, is the nature of this bullish beast. We had a terrific run in the transports. We had a big move in the techs. We had a fine gallop in the banks and insurers. We had solid increases in retail, culminating with the news that J.C. Penney (JCP) is no longer on the critical list -- but hasn't taken sales from Macy's (M) that anyone can tell. Wal-Mart (WMT) didn't even go down on that admittedly totally downbeat release.

So maybe now is the time for housing, oil and biotech stocks to take their turn. Stranger things have happened.

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