Bear market rally
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
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We think conditions are such that a bear market
rally is in order. We say this for one simple reason…world markets, major
indices, sectors and stocks are extended and stretched about as far as they will
go. We are not saying one will occur. We are saying that the conditions are now
there. How long any rally lasts or how far it goes is another story. Our best
guess is that the S&P 500 now has a wall in the 1245-1260 area and the DOW has a
wall in the 11,000 area. Lastly, the most stretched and extended areas are the
COMMODITIES and the EMERGING MARKETS. We expect the most violent reactions to be
in these areas.
Other notes:
One of the most important areas of the market…the BIG FINANCIALS have now
topped and are already rolling over. This is huge because this area makes up a
big part of the S&P. Just another area to say bye-bye as it will now join the
rest of the misery to a certain extent. Just look at these charts.
We had told you that BONDS were in an overall bear market but in a near term
bounce. Odds now favor that the bounce is over.
The last of the leadership in names like
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BIDU |
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PowerRating),
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HANS |
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NTRI |
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SHLD |
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PowerRating) are now going by the wayside. This is just another characteristic of
a bear market…as in bear markets, they come get them all.
It’s a negative:
That NEW LOWS have picked up dramatically.
ADVANCE/DECLINE figures remain a horror show.
Bounces cannot even last a day.
Too many people that do not understand the characteristics of a bear market
continue to call for a bottom on a daily basis and continue to tout new stocks
that are obliterated days later.
Companies that are raising their estimates rally for an hour and then head
south. Good news is bad news.
The Federal Open MOUTH Committee cannot keep their jaws shut. We know…THERE IS
INFLATION. Thanks for reporting the news. But more importantly, economic growth
is falling off a ledge…and the market is begging them to realize it.