Don’t Jump the Gun
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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Just so I am clear, I will repeat a line I have
been saying for weeks. UNTIL MAJOR INDICES BREAK SUPPORT AND OR MOVING AVERAGES,
THE MARKET GETS THE BENEFIT OF THE DOUBT. I am stating this again because I have
seen many turn bearish in the past week over the recent distribution that has
occurred in the NASDAQ/NDX. I do not disagree one bit with the fact that the
NASDAQ and the NDX have been under pressure. I do not argue with the
distribution days. I just argue with everything else.
Let’s look at the DOW and S&P? Do you see any
problems with these charts? I don’t.
Have you seen Asia moving to new highs? I have.
Have you seen European markets remain strong? I
have.
Have you watched the BROKERAGE stocks continue to
do well? I have. I do not believe markets get into trouble unless we see these
proxies of the market get in trouble.
I just wanted to make the point of not jumping
the gun. When I called a top on May 11 of 06, I called a top because the NASDAQ
physically broke support. For weeks, the DOW was leading while the NASDAQ/NDX
were laboring. When the time came, the market finally went into an intermediate
correction. The NASDAQ does not break support until it breaks below 2390. For
me, that will be a key…but not the key. I will have to see a lot more damage
being done…and I am not there yet.
I have seen days like Monday where over 350
stocks/ETFs broke below moving averages…but for me, major indices rule. I have
seen names like IBM and AAPL top on numbers but for me, major indices rule. I
have seen the SEMICONDUCTORS act horrid recently off of the poor action in names
like LRCX, AMD, INTC but the SEMIS are not the end-all-be-all they have been in
the past. They no longer lead the market up or down like they used to. I should
know because I was the one that for years stated that you always watch the
SEMIS.
I see all the suspect action others have seen on
a daily basis. I just believe it is imperative you don’t jump the gun in turning
bearish until the day major averages break support. 2390 on the NASDAQ will be
one important indicator…but the DOW and S&P have showed zero distribution as
of this second.
And on a final note. I am constantly barraged
with reports about the impending recession/depression for our economy. I have
news for them. STEEL, ALUMINUM, MACHINERY, RETAIL, AUTOS and other economically
sensitive sectors are now kicking in. I believe this economy may just be
accelerating right now.
Gary Kaltbaum