Continued Vicious Selling … A Washout?
Gary Kaltbaum is an investment adviser with over 25 years experience, and is 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 click here or call 888.484.8220 ext. 1.
This morning, futures are up huge. I am getting conflicting reports on Japan…one says things are better but when I turn on the tube, nothing but bad news. Europe bouncing strong. As I write this, the DAX is up 2.3% to 6673 but keep in mind, the DAX was 7200-7300 just 7 trading days ago.
After such a vicious and fast drop, it is normal to bounce…and in this day and age where things are lightning quick, somewhat normal to bounce hard. The question is whether bounces will be sustained and the answer is I DONT KNOW. We will just sit back and see if the market has some sort of confirming rally. It is too early to go there.
Many technicians have their eye on APPLE stock…which broke the 10 week/50 day on heavy volume yesterday…on a downgrade. Arguably, APPLE is the most important proxy of the market. I have important news for the many that believe the stock is done. I have seen many times in the past where this stock dropped on heavy selling, washing everyone out, before turning back up. Just keep an open mind.
By the book, regardless of today’s big opening gap to the upside, the market remains in correction. To be negative, it would be quite normal to bounce up towards resistance after such a sharp drop as the market is near-term stretched, extended and oversold to the downside. It would then be normal to resume the downtrend. To take the positive side, maybe the past couple of days was simply a normal correction (which does happen) which has already run its course. Corrections are a normal course of business for the market. They are actually a good thing. Regardless of the news, I am open to anything.
It is very important to keep your emotions in check during these wild, news-driven swings. You will have mornings asking yourself WHY AM I NOT LONG…and in the same afternoon, asking yourself WHY AM I NOT SHORT. I almost feel like leaving for the day so I don’t have to watch the intraday nonsense…but it’s what I do. NCAA basketball will be a nice relief to watching all the jello moving on the plate.
Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.