A Few Trillion Goes a Long Way
Gary Kaltbaum is an investment adviser with over 25 years experience, and is 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.
Back in late September, I was on a Fox Business show and was asked what I thought it would take to get the market bullish again. Tongue in cheek, I stated that maybe we wake up one day and the Fed announces a few trillion to just buy up the whole S&P. Well…not so sure we are not there.
First, we get the washout on Ocotober 4th where I told you I thought the market could rally off of. I actually told you that day that A low was probably in but in no way, did I expect this. October 4th started Operation “Twist” as well as an announcement of something “Tarp-like” and “QE-like” from Europe. Japan now announces $263 billion in QE. Europe announces $1.4 trillion. China looks like they are taking part also. On top of this, the Fed announced last week the potential for more QE. All this going on, while GDP is still in the plus column here. Just remember, QE1 came in right at the March 09 lows. QE2 came in right at the August 2010 lows. So there is a rhyme and a reason here as trillions now flood the world. But markets love it…simple as that.
After the recent washout low, we have seen a straight up move and a series of wild gaps and reversals. The outcome of all this, as well as the news out of Europe is that this morning, all major indices, all foreign countries, commodities, financials, baseball cards, Beanie Babies and everything else under the sunwill be gapping up big time above the handles they have formed over the past week or so. The “duh” statement is that if this breakout holds, market is going higher. The outlier moves, both up and down…continue.
Just one last note. I woke up this morning to hear a Wall Street strategist already talking about a “melt-up” in the market. This is just 23 days after the call was in for a bear market and a depression ahead.
See what a few trillion will buy you.
Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.