I didn't want to look at the charts this weekend. I knew that there had been terrible damage to so many stocks in the last few weeks.
But still, I wasn't prepared for what I saw. I looked at 1000 charts and I found 37 stocks that looked buyable to me. Thirty-seven that seemed to be holding up under the combined weak-earnings-Federal-Reserve onslaught.
It's a wonder anyone wants to buy any stock. You would be hard pressed to buy anything right now, with those odds.
More important, you would be fighting entrenched downturns that seem to have no ability to break themselves.
Some of the downturns are so pronounced, they take your breath away.
First, let me give you the real bear markets.
Number one, the worst, in the book, is anything related to coal or steel. I mean anything. We are watching our steel and coal companies, save Nucor (NUE), just disappear in front of us. Did you know that U.S. Steel (X) is down 63% this year? This company has survived the bankruptcy of so many of its colleagues, the reorganization or disappearance of dozens of competitors.
But this time, it is hard to see how it comes out of this tailspin, given the dumping by the Chinese and the lack of oilfield tubing demand, the decline in the beverage can business -- made worse by the cheapening of aluminum and the consolidation in the industry -- and the competition for automobile business, especially as it gravitates away from the U.S.
The only real growth in auto plants in this country comes from aluminum-based construction, and U.S. Steel is a sure loser in that battle. To make things worse, it isn't even the most lowly producer out there. You can barely see the stock of AK Steel (AKS) anymore, it's that low. Devastating.
Then there's coal. Or, is there? Periodically some brokerage comes out with a comment that says there will be a couple of winners in coal, like CONSOL Energy (CNX) -- down 70%. But what these analysts don't see is that the coal companies that are reorganizing under bankruptcy are going to take every non-reorganized company down with them.
We will always need coal. More than 30% of our energy relies on it. But with natural gas going to what may be all-time lows, coal can't compete and it is very easy to see how a new Democratic President running on climate change and a tough EPA just says to the industry that its distant targets for coal shutdown are now history and all coal plants need to be phased out in 10 years. The coal industry stocks trade as if that is the case. Maybe they know more than we do about what Washington's going to do.
At this point, it really doesn't matter what mineral or mining stock you want to talk about. They are all being hammered mercilessly. I know people feel that when Carl Icahn gets involved, you have a winner. But Freeport-McMoRan (FCX) does not look like a winner to me.
Copper, oil, gas, gold? I don't want to be in any of those areas. The companies that produce equipment for these industries, often the same as those who produce for coal -- companies like Cummins (CMI), Joy Global (JOY) and Caterpillar (CAT) -- are finally seeing their stocks break down in a fashion that suggests that those who have been waiting for some sort of Chinese stimulus plan are finally giving up. They seem almost untouchable.
Anything agriculture is just terrible, including the fertilizers and the farm equipment companies. Take the case of Deere (DE). Here's a company that is predicting hard times, but Wall Street has been reluctant to believe the negative thesis. It always has buyers underneath. Pretty amazing when you think about it.
Why would anyone want to buy it? Because of the yield? What does that do for you, 3%? No, thanks. Not in this environment. Archer-Daniels-Midland Company (ADM), down 27%, has finally given up the ghost. Monsanto (MON) is a special situation because of the consolidation in the industry -- not that I would want to buy it.
Oddly, some of the more down-and-out oil service companies are making a stand. I see companies like Weatherford (WFT) and National Oilwell Varco (NOV) trying to stop going down. They seem to be devoid of sellers. Same with Ensco (ESV) and Transocean (RIG).
But without a deal I think they will just fall apart again. The oils are still acting as if oil is going back to $50. But the natural gas stocks, those like Cabot (COG), Ultra Petroleum (UPL), Southwestern Energy (SWN), they are all acting as if survival is at stake. These are very good companies, with excellent assets. A company like Cabot might be the lowest cost natural gas producer in the world.
But who in heck wants that?
There's talk that Range Resources (RRC) has found the largest depository of natural gas ever in this country in southwest Pennsylvania. It can be profitable at well under $2. There was a time when everyone would want that stock. Now, the find is just being used as another nail in the coffin of the group.
The solar stocks have finally started reacting to the decline in energy prices, too. SolarCity (SCTY) is down 50%. Who needs a panel when natural gas is so low? SunEdison (SUNE) has a stretched balance sheet that is just crushing it. Can't own anything in that space.
Yep, any stock of any commodity with the possible exception of chicken with Tyson (TSN) just looks horrific and can't be bought without expecting to lose more money going into tax loss selling season.
What's incredible, though, is that right up there in terms of bad action is retail. The one-two punch of Macy's (M) and Nordstrom (JWN) has pretty much destroyed all retailers, both as potential holiday plays or value opportunities. I just can't believe what is happening to Best Buy (BBY), GameStop (GME), the dollar stores, The TJX Companies (TJX), Ross (ROST), and almost every other company out there. We have all collectively decided that Growth Seeker portfolio name Amazon.com (AMZN) has wrecked the industry and who is to say otherwise?
Amazingly, this retail decline isn't sparing the drug store chains, which have been among the strongest. And last week, with the Advance Auto Parts (AAP) collapse, the other strong portion of retail has broken down.
Of course, apparel's been crushed right with these. So have chains like Chico's (CHS), DSW (DSW), Big Lots (BIG) and Bed Bath & Beyond (BBBY), which had been viewed as potential take-outs by private equity.
Obviously, two that started this decline, Whole Foods (WFM) and Wal-Mart (WMT), have been trying valiantly to make a stand here. I don't think they can hold. There's just neither dividend nor an earnings scenario that makes me want to buy them and without some decision by Whole Foods management to go private, it is difficult to see how the downtrend is stopped.
All of these groups have just been obliterated.
Now, all of these stocks are in a mode where the downtrends are totally entrenched and seemingly irreversible.
That's not the case with other areas. The banks still hold up, as the relentless drumbeat for higher rates no matter what stays strong.
The techs are split. Old tech, like Microsoft (MSFT) holds up, although Action Alerts PLUS portfolio name Cisco (CSCO) dented that story. But anything cellphone is terrible. Old pharma is trying to stabilize but biotech stocks? Taking your life in your hands.
Autos? The majors are okay, particularly General Motors (GM). But the parts companies look like they are rolling over.
Entertainment, travel and leisure aren't stabilizing, and I don't think the Starwood bid will matter. Only the cruise lines have strength. Restaurants are just plain awful.
And don't talk to me about anything with yield, whether they be real estate investment trusts, utility stocks or the dreaded master limited partnerships. Just oblivion.
In this atmosphere you can't just rely on a couple of high growth stocks to keep you out of the soup. You can't ask for Facebook (FB), Amazon, Netflix (NFLX) and Google (GOOGL) (alphabet) to save you. When every stock but them comes down, that, in the end, has to pull them down, too.
And that's what seems like is going to happen next.
More on that later.