Do Not Ignore What We Have Been Seeing

  • March 17, 2005
  • Gary Kaltbaum

Markets are oversold.

But that does not change the fact that all the internals
of the market are deteriorating. So…oversold or not, this market is in
trouble.

 

The NASDAQ 100 continues to be the weakest of the major indices. It is now
sitting on its longer-term 200 day average. A break below turns it
intermediate-term bearish…and potentially worse than that. This chart looks
as bad as it is.

The NASDAQ is right behind. Bulls do not want to see a break of recent lows.

The DOW and S&P have now broken back below the 50 day average…the 3rd time
this year. If things get worst, they will hold up best but will participate in
the downside.

 

 

NEW LOWS are now outpacing NEW HIGHS.

 

A/D figures on a daily basis are gross.

 

Volume patterns remain negative.

 

Do not ignore what we have been seeing. High volume down days and low volume
bounces are never conducive for higher prices. The market is late in the bull
cycle and we are now past the point of being bailed out of mistakes. This is
the same action I saw early last year that led to a 10% drop in the DOW and
S&P and 20% in the NASDAQ. I am not so sure I would bet against that occuring
again. I have no idea of the outcome. Maybe we will see the same as last year
or maybe we will end up in a full-fledged bear market. Maybe the markets will
pull up its bootstraps right here. As of right now, you know where I stand.

Gary Kaltbaum