If this is for real, leadership will show up
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 would like a free trial to Gary’s Daily Market
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After Tuesday’s follow
through day, we told you we were suspect of a follow through
occurring on day 21. But…like
a good follower of William O’ Neill’s discipline, we told you that we still have
to give it a chance to work. We are
only one day later. After a monstrous drop in the NASDAQ, Tuesday’s action was
the first action that woke me up since
May 11 as I stated the NASDAQ looked like it would lead again. Wednesday’s
action has me sitting up. Wednesday’s
volume was much more compelling.
As I have told you for years, the NASDAQ-types lead the market up and down…and
it was a positive that the NASDAQ
was starting to lead again. I will repeat, I do not know what this will lead to,
but accumulative action is now being
seen and it must be respected. Keep in mind, the best action has been reserved
for names like QCOM, BRCM and others
that have been absolutely bludgeoned over the past few months…some down over
50%. While these areas move faster
than others, there will be a rebuilding process. I am already receiving too many
emails from people who were fearful
on Monday but greedy on Wednesday. So…relax! The market will be open today and
tomorrow. I promise. If this is for
real and long-lasting, leadership will show up, bases will form and more and
more stocks will break out on volume.
Just play it one day at a time. Here are a few lines out of Investor’s
Business Daily. It will explain exactly how I feel right now. Please pay
attention to the words in italics.
"Technology stocks were a big reason the Nasdaq and smaller stocks rallied. The
Philadelphia semiconductor index
soared 4.3% as chipmakers finished as one of the day’s top industry groups.
Transportation stocks also fared well as
crude oil futures settled at a nearly one-month low. While those and other
areas are leading the market, be judicious
in what you buy. Tuesday’s Big Picture cautioned that some follow-throughs can
go nowhere. Many top-rated stocks are
in risky late-stage bases. Avoid deep bases or those with severe selling. Make
sure fundamentals are solid.
Disciplined trading can keep investors away from distressing situations. If
technology is where leaders are emerging,
there aren’t abundant opportunities so far. Few chip stocks are near buy points.
Most of the high-liquidity names are
just now coming off lows or still building the right side of their price bases."
Other notes:
OIL PRICES feel like they are topping near-term. This is good news but it is
slowly becoming bad news for OIL STOCKS.
Many OIL STOCKS are acting horrid in here…especially the DRILLERS. Keep in
mind, this is a very tough group to play
as most charts continue to be wide and loose.
The BOND MARKET has broken out of its low level base. Everyone is talking about
more cooperative inflation numbers.
I do not believe most government statistics but I do believe in the BOND
MARKET’S reaction to them. This continues to
be nothing but good news right now.