Helicopter Ben Can't Stop the Meltdown in Certain Areas

Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show "Investors Edge" on over 50 radio stations. Gary is also editor and publisher of "Gary Kaltbaum's Trendwatch"...a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary's Daily Market Alerts click here or call 888.484.8220 ext. 1.

When queried about whether taxes are going to go up, Charles Clinton...I mean Charles Rangel said this:

"If you are receiving a preferential tax treatment that you don't deserve, you can call it what you want, a tax increase. We will be calling it a loophole."

"Preferential tax treatment that you don't deserve?" "Preferential?" "Don't deserve?" What country does this man believe we are living in? Maybe he just wants employers to send the paycheck to him so he can dole it out. I love people that have never run a business in their life telling workers what they deserve or what they don't deserve. Hey Charlie..."IT'S NOT YOUR MONEY!" For anyone who cares, the proposal sends tax rates from 35% to 44%. Good luck!

Who said the following?

"I think it is time for us to step up and say we are going to change the way Washington works. I've laid out very specific plans about how to do that. I'm going to take $10 billion away from a lot of these industries, starting with money from the HMOs that are getting too much out of Medicare, starting with the no-bid contracts for Halliburton; starting with the defense industry that needs to be pared down and reined in. I've been very clear about that. And I intend to implement that."

No...it was not Karl Marx...it was not Fidel Castro...it was not Hugo Chavez. It was Hillary. I will let you decide.

I have been saying it for weeks...if not months. CITIGROUP is a financial ticking time bomb. I believe there are tens of billions in losses that have not been disclosed and believe the "Superfund" is purely to prevent a CITIGROUP meltdown. Guess what? The market is now figuring it out.

This report has told you for months that while BIGCAP TECH, OILS, GOLD/SILVER, COMMODITY-TYPES, SOLARS, SHIPPERS, FERTILIZERS, BIG CAP over SMALL CAP have been in bull markets, many important areas were already in their own private bear markets...including most FINANCIALS, RETAIL, HOUSING, MORTGAGE, LENDERS, INSURANCE...

This report has also taken pains to point out all the potentially negative divergences...how while the NASDAQ,NDX have been moving to new highs, the rest of the major indices have not. This report has told you that while major indices have been a hair below highs, only about 40% of stocks have been working...a very negative divergence. Well...we are now starting to see some shoes drop. Simply put, the bad is now getting badder.

FINANCIALS are now in somewhat of a meltdown mode. What happened to "CONTAINED?" FINANCIALS are without a doubt very important to the market. The NEW LOW LIST contains Citigroup, Washington Mutual, Bankamerica, Fannie Mae, Freddie Mac, Wachovia, Wells Fargo, Suntrust and others. And that is just the big stuff.

RETAIL is also in meltdown mode. Don't ask for opinions whether the consumer may be in trouble. Go look at the recent mini-crashes in JC Penny, Kohls, Target, Nordstroms, Sears, Gymboree, Lowes, Home Depot, Bed Bath and Beyond...and that is just the short list.

The SEMICONDUCTORS have been melting down also. The SOX is completing a major head and shoulders top...almost classic looking.

The TRANSPORTS have not budged with the recent move with the market.

I do not need to discuss Housing...but if I hear another realtor say housing is bottoming, I will heave.

Don't take my word for it. Break out the charts of the major indices. The NASDAQ and NDX, for the most part, are just in pullback mode...but have now suffered numerous distribution days...which does not augur well. But the small and midcap indices are starting to look horrid...with the DOW/S&P now showing toppy action.They are now playing catch-up with the many bear markets in the many sectors I have previously mentioned. The major indices have been held up by an ever-narrowing of mega-cap stocks that hold major influence over the major indices. For instance, I love the action of MICROSOFT here off their latest earning's report. It is 11% of the NASDAQ 100.

Very simply, if the big and mega-caps that have been leading start to come in...see ya.

My last thought...all this ugly action is occurring in RETAIL, HOUSING, FINANCIALS...with the FED dropping a trillion or so buckos onto the field of play ...I do not think they have too many more weapons. In fact, they dropped another $41 billion from their helicopter on Thursday.

I want you as far way from anything FINANCIAL, anything MORTGAGE, anything RETAIL, HOUSING, RESTAURANTS, HOTELS, SEMICONDUCTORS, LENDERS, TRUCKERS, AIRLINES, TRANSPORTS, INSURNACE, SMALL CAPS, MID CAPS and would now start to put on the heavy overcoats with the rest.

Gary Kaltbaum