Your Best Offense In This Market
WOW! That’s all I can
say about the recent action in this market. Let’s take a look at
some pictures. All of these areas I have been telling you to avoid. I will
start with an emphasis on sectors.
say about the recent action in this market. Let’s take a look at
some pictures. All of these areas I have been telling you to avoid. I will
start with an emphasis on sectors.
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GOLD/SILVER is turning into sand. This chart
looks like more than just a short to intermediate-term top. Notice the clear
break on Tuesday. I continue to believe this is an absolute AVOID!
looks like more than just a short to intermediate-term top. Notice the clear
break on Tuesday. I continue to believe this is an absolute AVOID!
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REITs have been crushed. This is part of the
INTEREST-RATE sensitive areas I have told you to stay away from. I have
heard many ANALysts say to JUST buy this drop….don’t worry…everything is
OK. OH YEAH…I HEARD THAT ABOUT Worldcom at $40 from some ANALysts. The
following charts paint a different picture. Supply most definitely has the
upper hand. Notice how all the charts look the same.
INTEREST-RATE sensitive areas I have told you to stay away from. I have
heard many ANALysts say to JUST buy this drop….don’t worry…everything is
OK. OH YEAH…I HEARD THAT ABOUT Worldcom at $40 from some ANALysts. The
following charts paint a different picture. Supply most definitely has the
upper hand. Notice how all the charts look the same.
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This next chart tells you what I think about
MORTGAGE-RELATED stocks.
MORTGAGE-RELATED stocks.
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The all-important SEMIS are acting like my METS.
Take a look at these beautiful pictures…in spite of all the upgrades on a
daily basis.
Take a look at these beautiful pictures…in spite of all the upgrades on a
daily basis.
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The BOND MARKET is dying on the vine.
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The UTILITY INDEX looks to have rolled over.
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HOMEBUILDERS are quietly heading into the
sunset.
sunset.
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The NEW HIGH LIST has shrunk. The NEW LOW LIST
has picked up.
has picked up.
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Up/down figures as well as advance/decline
figures have gone south.
figures have gone south.
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I believe the only thing these areas have going
for them right now is that they are oversold just on price and are due to
bounce. Until things change, bounces are sellable.
for them right now is that they are oversold just on price and are due to
bounce. Until things change, bounces are sellable.
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Clearly, in spite of the bulls’ protestations,
supply has the upper hand in this market. I know the Dow and S&P 500 are
only a few % off their highs. This is just masking weakness underneath the
surface. I know Tuesday’s drop was directly affected by what Alan
Greenspan’s words…but why didn’t the market go up on his words? After all,
they were all positive. Very simply, it’s not the news or the noise, it’s
how the market reacts to the news and the noise that matters. Anything can
happen, but as of now, my stance remains. Defense is your best offense. If
you have listened to me, you are off margin, you have raised the bar and you
are holding a decent amount of cash. As I write this, futures are up nicely
for tomorrow morning on the back of MOT numbers. I will be watching to see
how the market opens and if it opens strong, to see if it can hold its bid.
If the past few days mean anything, expect a reversal off of any strong
open.  Of course, Big Al speaks again on Wednesday. Who knows? Maybe he will
change his mind.
supply has the upper hand in this market. I know the Dow and S&P 500 are
only a few % off their highs. This is just masking weakness underneath the
surface. I know Tuesday’s drop was directly affected by what Alan
Greenspan’s words…but why didn’t the market go up on his words? After all,
they were all positive. Very simply, it’s not the news or the noise, it’s
how the market reacts to the news and the noise that matters. Anything can
happen, but as of now, my stance remains. Defense is your best offense. If
you have listened to me, you are off margin, you have raised the bar and you
are holding a decent amount of cash. As I write this, futures are up nicely
for tomorrow morning on the back of MOT numbers. I will be watching to see
how the market opens and if it opens strong, to see if it can hold its bid.
If the past few days mean anything, expect a reversal off of any strong
open.  Of course, Big Al speaks again on Wednesday. Who knows? Maybe he will
change his mind.
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Lastly, Tuesday was the fifth anniversary of the
Columbine incident. As you know, I end my radio show with these
words…”When you get home, hug your children.” I started saying that the
day the Columbine incident occurred. I have received hundreds of emails on
just that. Thus, I never have stopped saying those words.
Columbine incident. As you know, I end my radio show with these
words…”When you get home, hug your children.” I started saying that the
day the Columbine incident occurred. I have received hundreds of emails on
just that. Thus, I never have stopped saying those words.
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I was told many years ago to cherish every day
with your children because it goes fast. I never believed it. Well, my
eldest son will be 13 in August…and you know what? They were right. It has
gone too fast. It has been a blur. Thirteen years feels like five. I urge
every one of you to learn the lesson that life is really too short and
before the years go by, to commit yourself to making every day count. We all
take a lot of things for granted on a daily basis…including me. It’s at
times like these, we need to take a step back and realize what really
matters.Â
with your children because it goes fast. I never believed it. Well, my
eldest son will be 13 in August…and you know what? They were right. It has
gone too fast. It has been a blur. Thirteen years feels like five. I urge
every one of you to learn the lesson that life is really too short and
before the years go by, to commit yourself to making every day count. We all
take a lot of things for granted on a daily basis…including me. It’s at
times like these, we need to take a step back and realize what really
matters.Â
Gary Kaltbaum