Big-caps look to be leading the way
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
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Markets are very split. I know…the DOW and S&P are near
their highs…but please take the time to look at the DOW and S&P and compare
them to the SMALL and MID-CAPS. Maybe this is the way it will be…BIG-CAPS
leading the way. We shall see.
OILS, GOLD, SILVER, ALUMINUM, COPPER, COAL, STEEL feel oversold here just like
SEMIS, RETAIL feel extended and overbought…so we may get a flip-flop…but I
do not want you to buy any bounce in any of those COMMODITY areas. Instead we
would look to sell moving up into resistance. OIL STOCKS and OIL prices have
moved down too far…too fast. The same goes for all COMMODITY areas.
On the other end, we like areas like RETAIL and TECH on any pullbacks…All
moving averages are converging at around 1280 for the S&P with the S&P sitting
at 1320…so we may get some corrective work soon. The same thing goes for the
DOW as it sits 400 points above moving averages. To further that thought, just
take a look where the NASDAQ, NDX and SOX sit…right into the meat of
resistance…so be careful here.
This does not mean the extended areas have to pull back. One just has to
recognize when things get extended and when risk picks up. We think risk picks
up here for the extended areas.
We also believe BONDS are at an important juncture. We suspect the BOND MARKET
is due to pull back as it is now right into resistance. A pullback would be
normal for the BOND MARKET here…but no sweat…as it remains in good shape at
this juncture.
Gary K