Don’t be a hero!
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 “Investor’s Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts
In Monday’s report, I
penned these words:
"The tape remains split. Even if the major indices
move to new highs, (AND I SUSPECT THEY CAN) fewer and fewer stocks are
working. This is classic later-stage action as the market becomes more
concentrated . This is evidenced by how many stocks and sectors are in their
own private bear market. They include, RETAILERS, AIR FREIGHT, ALUMINUM,
AUTOS, DISK DRIVES, PAPER, CHEMICALS, INTERNET, NEWSPAPERS and HOUSING."
As soon as the Fed raised rates, FINANCIALS joined
the ugly party. FINANCIALS are about 20% of the S&P. You can put 2 and 2
together on that one. To make matters worse, TECH has also started to gag. I
must tell you…there is not much left on the positive side of the ledger at
this point. Most sectors are in short to intermediate-term downtrends…and
you should be out of the way.
All major indices have broke below short-term
moving averages.
The DOW is now below all moving averages and is
now approaching first support at approximately 10,350.
The NASDAQ has now broke below its recent low
at 2112 and is now sitting right at its vital breakout near 2100.
NEW LOWS have jumped to over 300 names. Every one
of these stocks has violated all support going back one year.
I do suspect that some of the
areas (RETAIL, GAMING, RESTAURANTS, HOUSING) that have been hit the hardest are
due to bounce. They have become about as stretched to the downside and
oversold as I have seen in a long while. Bounces continue to be sellable.
I can go on and on about the technical damage that
has been done. This is no time to be a hero as most stocks and sectors have
turned down. The only groups that I would continue to overweight are just
about all the COMMODITY areas. I know the major indices are just a few percent
from recent highs. The damage underneath the surface has been much worse.
Gary Kaltbaum