Get Defensive If These Levels Are Breached

Shorter-term, there
continues to be warning signs
that the market is a wee bit tired
here. I have mentioned to you why in past reports.( Put/call figures are too
bullish, froth is starting to kick in and a couple of subtle divergences in
NEW HIGH FIGURES.)

 

BUT don’t let that sway you from the big picture.
Yes, I was not thrilled that the SEMIS sold off by the end of the day on the
supposed great INTEL news. Yes, I continue to see some horrid looking charts
in RETAIL…namely WMT. BUT… that’s the worst I can say.

 

NEW HIGHS continue to be strong. Advance/declines
continue to be strong. Individual stock charts continue to be strong. Volume
patterns continue to be strong. Eventually, a pullback will get started. I
will only start to get a wee bit defensive if the following levels are
breached. DOW 10,417…S&P 1167…NASDAQ 2090. Even if these levels are
breached, there is still too much underlying strength. Until my indicators
change…until volume patterns change, I am giving this market the benefit of
the doubt.

 

Gary Kaltbaum