Can you answer these 5 questions?
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
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Only one week removed from last week’s follow-through day and I am already
not liking what I am seeing. Many are out saying that the market is going to
bust out of this range to the upside. I hope they are right. For this second,
I have some questions. If the market just started a new bull leg:
Why did NEW LOWS expand by 150 names on Wednesday?
Why are GAMING, RETAIL, RESTAURANTS and HOUSING already topping with a few names
making fresh lows?
Why did HMOs just top? This has been one group that has held up.
Why are HOSPITALS starting a new leg down?
Why was the A/D negative by more than 2-1 on Wednesday?
I am asking these questions because this type of action is not supposed to
happen at the start of new bull moves. Maybe this is just a market that bumped
into massive resistance and needs to pull back. In fact, it is quite normal to
be turned back on the first attempt at resistance. That still doesn’t explain
the new lows. I am becoming suspicious and do not believe this market can
absorb more negative 2-1 A/D days.
Other important notes:
Take a gander at this chart. This is the chart of the long bond YIELD. Yields
broke out to multi-month highs…meaning the BOND MARKET broke down to
multi-month lows. There is no spinning this. I do not believe it is positive
if rates go higher.
GOLD STOCKS are now woefully underperforming the metal. In fact, I believe a
near-term top is in for GOLD STOCKS. Normally, the metal follows soon
afterward.
After a violent bounce in OIL STOCKS, I believe another top has just been put
in. I am now finding some names that look shortable. At the very least, there
are absolutely no bases in OIL and the moves have become very wide and loose.
We are heading for the end of the month of October where many mutual funds
close out their books for the year. Do I see a ramp into Monday to make
things look better? Maybe! Maybe not! I am just letting you know that
underneath the hood of this market, after only one week off the lows, I am
starting to become less than thrilled.
Gary Kaltbaum