Are we having fun yet?
Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
>The Investor’s Edge. Mr. Kaltbaum is also the host of the nationally
syndicated radio show “Investors’ Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts
click here
or call 888-484-8220 ext. 1
I am not a fan of writing every day, but the market’s
spastic action is dictating it.
On Wednesday, the market followed through to the upside. Odds favored after
such a move, the market would test the upside. Odds favored a near-term low
was put in. Why? I have studied follow-through days for years…and simply
put, odds favor upside testing when such a day occurs. In fact, I do not
recall ever seeing such action after a strong move…not even in the brutal
bear market of 2000-02.
Thursday’s action threw a curveball as the market
never even got out of the gate. While major indices were holding up early, the
A/D once again was faltering. Under that weight, the “market” caved into the
close. Overall, breadth was horrible once again. This is the same action we
have been seeing for weeks.
With Thursday’s action, I think it important to look underneath the hood.
ENERGY, COMMODITY, OIL, METALS…all the areas that recently topped…are being
bludgeoned. That was the theme of Thursday…simple as that. These areas,
altogether have a heavy weighting…especially in the NYSE…which is now
underperforming. The top in OILS/ENERGY I called is now turning into a
bloodbath.
The most important question is whether other areas of the market come to the
fore to take up the slack lost by the areas that are plummeting. Those are the
areas that popped their head up on Wednesday. That includes all the CONSUMER
areas I have been negative on for about the past three months. I think we will
know pretty soon. If they don’t show up, the low that was put in on Wednesday (which is still holding) will not have a chance. In any case, this
remains about the toughest market I have seen in over a decade.
I will be appearing on a special edition of the FOX NEWS CHANNEL BUSINESS
BLOCK this Saturday at 10 am-noon et. Do not miss it.
Gary Kaltbaum