This Is What The Odds Favor Here

  • June 2, 2003
  • Gary Kaltbaum


Well, the pullback lasted all of 5 days.
Last Tuesday, the market shot out of a cannon, led by my old favorite…the
SEMIS. I have been telling you for years to just watch the
SEMIS for clues to
where the market’s going. They spoke loud and clear last week.

The technical condition just continues to get better and better. I don’t know if
I need to say much more than that. I have not seen so many setups in
years…and I mean years. Anything can happen in the stock market, but
odds do favor higher prices. That’s all we can deal with when talking about the technicals…what do odds favor? And that 965 S&P everyone is talking about as
resistance….odds favor the market goes through it like it is not even there.

A few notes:


  • I am finding almost no shortable looking stocks right now…and have no shorts
    at this juncture. Just another clue about the positive attributes of the market.

     


  • The NEW HIGH LIST continues to expand while NEW LOWS are non-existent.

     


  • More and more stocks and more and more sectors are now coming up their right
    sides…breaking out of low-level, mid-level and new high bases.

     


  • Advance/declines and up/down volume remain strong.

     


  • I have only one distribution day counted in the last month. That was taken care
    of in last week’s action.

     


  • FINANCIALS are acting well…which is a positive. As I have told you in the
    past, it is not often the market cracks when FINANCIALS are in gear. The
    BKX is
    now comfortably above the 800 mark.

     


  • SMALL and MID-CAPS
    are leading. Take a gander at the RUSSELL 2000 vs. the
    S&P
    500     chart.

     


  • For a change, WORLD MARKETS are getting in gear.
    JAPAN is even rallying…and
    the important LONDON/FTSE is now above its 200-day average.

     


  • Leading groups are BIOTECH,
    HOMEBUILDERS, INTERNET
    and TELECOM. Yes, many names
    are extended and probably consolidate their gains and form new bases. The good
    news is that new names are starting to show up on a daily basis.


I don’t know what more to say. It is been so long since anyone of us experienced
such good action. It feels almost foreign. The good news is that it is at hand
and until things change, you must give the market the benefit of the doubt.

No sentiment talk today. I am actually sick of myself talking about sentiment.
Price and volume action first.

Gary Kaltbaum