For The Short-Term, This Is What It Looks Like
I am writing you again today. Normally, I write
twice/week…but market conditions are dictating extra prose. Of course, the
carpal tunnel is setting in.
 Yesterday , I penned these words:
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“My main point today will stray a bit from what I
have been saying…but only for the short-term. Longer-term, the tape is still
a mess, the charts are a mess and leadership is non-existent. BUT — and I am
not trying to micromanage the market — if you zig when you should be zagging,
you will pay a stiff penalty.
FOR THIS
SECOND, I BELIEVE IT IS TOO LATE TO SELL AND TOO LATE TO SHORT. Understand,
this is not a longer-term call. Most stocks are very extended to the downside
— extended to the point where you would expect a bounce. In other words, do
nothing. I suspect bounces will occur. Oversold conditions do get worked off
by bounces. On top of the extended condition to the downside, I am now getting
questions on my radio show about shorting. These types of questions are not
asked while the market is going well. They are asked after drops have already
occurred. The last part of the equation is the word “feel.” It feels” like
yesterday was the “bad news” sell day. It’s the point where all the bad news
gets factored in.
I am writing this at 6:30 AM EDT on Wednesday.
The main reason I am writing this is futures are up big time this morning on
the back of a stronger Asia and Europe. Some are saying it is because of
Hewlett Packard’s numbers. I DON’T THINK SO! Â Simply put, it doesn’t matter to
me why…it matters what is.
^next^
I have no clue how far this bounce takes us,
whether it craps out today, how long it lasts or whether “THE LOW” has been put
in. My headlights do not go that far. My main point from yesterday is that
AFTER the horrid action of the past weeks, I felt too many were joining the
“BEAR MARKET” bandwagon. I then noticed a few positive divergences…which led
me to change my short-term stance.
Instead of predicting, I will continue to let
the market be my guide. Until this morning’s pre-market, I was still worried
about the fact that Tuesday’s NASDAQ bounce was on the lightest volume of the
year. Today may change the playing field. I have already made my list of
stocks that have held up best over the past few weeks. Normally, in a bull
move, many of them will lead. If today holds, and volume comes in heavy, I
will probably start probing a bit. Of course, the usual ritual would set
in…close my eyes…hold my nose…and pray.
Can this turn back into a bull market? Sure, it
can. BUT… there will  be plenty of work to do and damage to repair for that
to happen. The one part of the equation that will not change is that this tape
is going to remain challenging ..so take your time. It’s not easy to play this
game when the market opens down 100 points on Monday and looks to open up 100
points on Wednesday.
I am heading for Las Vegas today. I gather with
all the wildness, I will be writing again this week. If I don’t, please tune
into my radio show Friday. I will be interviewing my good friend and the most
“positive attitude” person I know: Secretary of Commerce Don Evans. You can
listen on the web at garyk.com or businesstalkradio.net.
You can also look for me on FOX NEWS CHANNEL
this Saturday at 10:30 am ET…that’s 7:30 AMÂ Â Vegas time. The show is “Cavuto
On Business.” Do not forget the whole business block on FOX NEWS CHANNEL from
10 AM ET to 12 Noon on Saturdays…that’s 7-9 AM Vegas time.Â
Lastly, for those that have pre-ordered, my
book will be shipping in the next couple of weeks. You can order it at
garyk.com.
Gary Kaltbaum