With the S&P having reached his downside targets, technician Richard Rhodes is now taking some long positions. In The Rhodes Report, he  looks to steel and transportation.

Track Richard’s picks at:

http://trackthepros.com/stocks/category/1503

“The S&P 500 longer-term technicals remain bearish, although they have reached and exceeded our downside target.

“Now, the S&P is becoming rather oversold on a number of measures that have in the past been consistent with a sharp snap back rally of either the long-term or transient kind.

“At this point, we vote with the latter transient kind, but clearly the risk-reward of selling short at current levels is not very good —hence we’ll only consider doing so on rallies into resistance.

“We do believe there is a another shoe to fall, but not at this very moment, for the markets seem to have prepared for another jog higher towards resistance levels

“Our trading strategy is rather clear – we are buyers of

Richard Rhodes, editor of the Rhodes Report, is the newest pro added to trackthepros.com

http://trackthepros.com/pros/profile/133

“A changing of the guard is upon us,” notes technician Richard Rhodes. In his The Rhodes Report, he explains his shift to go long the energy sector while shorting financials.”

“Technically, the broader bearish head & shoulders pattern in the Wilshire 5000 remains in place; thus the long-term downtrend remains in place and all rallies are considered countertrend moves.

“Moreover, many indices have now returned to major overhead resistance levels that are consistent with a risk-reward for returning to an aggressive short position.

“We’re going to a long Energy position, which we consider oversold while also taking a short position in financials.

“The Bear Stearns takedown marked the low for the financials in terms of market cap at $270 billion, which was broken as concerns about Fannie and Freddie came to the forefront. However, prices stabilized on the news that short selling was prohibited in the Big 19; and then rallied back into