Here’s Where You Should Keep Your Focus

  • September 8, 2003
  • Gary Kaltbaum
The
pullback/consolidation I told you could happen started to play out
late last week. BUT...don’t let that sway you
from the bigger picture. Very simply, the internals of this market are just
fine. It is now our job to decipher which areas will lead and which areas will
lag going forward, because nothing lasts forever…I think.

image src=”https://tradingmarkets.com/media/2003/Kaltbaum/gk090803-01.gif” />

image src=”https://tradingmarkets.com/media/2003/Kaltbaum/gk090803-02.gif” />

  • I want you to hold off on buying most
    CYCLICAL names. I am seeing topping action in
    names like
    (
    MMM |
    Quote |
    Chart |
    News |
    PowerRating)     and
    (
    CAT |
    Quote |
    Chart |
    News |
    PowerRating)    . Just remember, the good news on the
    economy is now coming out. These stocks forecasted the news months ago.

image src=”https://tradingmarkets.com/media/2003/Kaltbaum/gk090803-03.gif” />

image src=”https://tradingmarkets.com/media/2003/Kaltbaum/gk090803-04.gif” />

  • I believe BONDS
    have put in a near-term low…meaning rates will come back down a bit.
    BUT...longer-term, there is a good chance that
    the longer-term picture has changed to a higher-rate environment.

     

  • GOLD continues
    to do well. You can still overweigh in this group and buy any new breakouts.

     

  • Foreign markets are still in good shape.
    ASIA remains the strongest…but most
    definitely needs a rest as Japan has basically come straight up since the
    lows.

     

  • TECHNOLOGY
    remains very strong. In fact, in spite of all the “overvaluation” talk, the
    group is acting solid as a rock. Please remember that the “overvaluation”
    talk on TECHNOLOGY was being yelled as early as 1995. You all know
    what happened the next five years. If the overvaluation camp is right, you
    need not worry. The stocks will top out and then turn down. You will have
    plenty of time.

So…all in all, I would not give much weight
to Friday’s action. Stay focused on how many stocks are at
NEW HIGHS and that are breaking out. That is your greatest indicator of
strength in the market….and more importantly, HOW
ABOUT THOSE NEW YORK GIANTS!

Gary Kaltbaum