Up…down… up…down…
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
In the past week, Monday was up, Tuesday down,
Wednesday up, Thursday down, Friday up before a selloff into the close. This
type of whipsaw potentially is negative because it is happening near the high of
a range. Whipsaws that occur at the bottom of ranges usually lead to upside. It
is also less than thrilling that the market reversed late Friday. We do not like
negative reversals and we certainly don’t like negative Friday reversals. This
type of action tends to put a near-term cap on the market as the big money sells
into the latest move. It is also less than a plus that NEW HIGH figures continue
to lag badly though major averages have moved to new highs. This simply tells us
that fewer and fewer stocks are leading the market. In fact, we have seen a
series of lower highs in the NEW HIGH figures.
We are also noticing that some foreign markets are now starting to act toppy.
World markets have done extraordinarily well over the past year, much better
than the U.S. Thus, they have to be watched closely. In particular, Japan seems
to have lost its steam. Maybe it is only a pause. A break below 15,389 and then
15,089 would put the fork in the Nikkei for now. The first short-term support to
think about is the S&P 1278, NASDAQ 2256 and the DOW 10,978 followed by the 50
day average at 10,900. But potential short-term negatives aside, there are still
plenty of positives.
It is positive that all major averages are trading above their moving averages
(though the NDX is a wee bit below the 50-day MA) We won’t get too worried until
the short term averages are broke. It is a positive that the leading TRANSPORTS
continue to roll, hitting another new high on Friday. It is a positive that at
least 6 out of 10 stocks are still in good technical shape…though the old
highs were never bested. It is a positive that most A/D lines just hit highs
this week. This type of action usually does not occur when the markets get in
trouble..
So, you can see, our indicators are pretty much split…thus the importance of
staying in gear with what is working while avoiding what is not.
We thought a few OIL had a chance to turn up. Many were still in bad shape.
Well, any chance was squashed today as OILS have turned down hard. I still like
the relative strength in the names previously mentioned so continue to watch.
The BOND MARKET is now in trouble as rates on the long end are starting to break
out. I will let the stock market decide whether that is a negative. HOUSING has
already been whacked and now, I will turn my attention to the UTILITIES. If they
start to break down, it could be meaningful. The one outcome of higher long
rates could be the FED continues to raise rates.
RETAIL is about as split as could be. For every
(
BBY |
Quote |
Chart |
News |
PowerRating), there is an
(
ANF |
Quote |
Chart |
News |
PowerRating).
For every
(
LOW |
Quote |
Chart |
News |
PowerRating), there is a
(
CHS |
Quote |
Chart |
News |
PowerRating). No dart throwing right now at the
RETAILERS.
The SOX…I am subtly starting to notice
(
VSEA |
Quote |
Chart |
News |
PowerRating),
(
XLNX |
Quote |
Chart |
News |
PowerRating),
(
NVLS |
Quote |
Chart |
News |
PowerRating),
(
MXIM |
Quote |
Chart |
News |
PowerRating) and a few other SEMI names that are rolling over. The good news is
that there are still plenty of good charts in the group. I continue to believe
this group will be a leading indicator for the market so watch closely.
Gary