For Real Confirmation, This Is What I’m Looking For
The markets continue to
tease both bulls and bears. In the past 10 weeks, I believed the
market would break out to the upside on as many occasions as I have thought it
would break down. That’s what trading ranges are for…to tease. But you
need not worry. Instead of thinking, I want you reacting. If the major
averages do break out to the upside, you act accordingly.
The Dow would be the first to break out with a
move above 9362…just a stone’s throw away. But for a real confirmation, the
S&P needs to move above 1016. A failure for the S&P to confirm would be a
negative divergence which would serve to hold the markets back.
Let’s talk about last week. Notwithstanding
Friday’s light action, the market quietly improved. Major indices that sliced
down through the 50-day averages came right back through them…and guess
which sector led things back up. You guessed it…the
Semis. As usual, just continue to watch the Semis. If they hold up, the
market holds up. I also saw other positives from last week having nothing to
do with our markets. JAPAN and other ASIAN
markets remain strong….and something I usually don’t talk about, the
LONDON FTSE broke above its range. Readers of my
reports know I am a big fan of watching WORLD
markets.
 It is also a positive that that new names are
starting to break out while the markets sit. You may want to take a gander at
charts of
(
IRF |
Quote |
Chart |
News |
PowerRating),
(
KKD |
Quote |
Chart |
News |
PowerRating),
(
PAYX |
Quote |
Chart |
News |
PowerRating). Continue to pay close attention
to the NEW HIGH LIST. If this list picks up with
quality names, you won’t need much more evidence that the markets remain in
gear. Lastly, I do suspect any day now that the market will break out of this
range…one way or the other. Â Be ready.Â
 Â
Gary Kaltbaum