Is this a new upleg? Watch these 5 stocks for the answer!

• September 12, 2005
• Gary Kaltbaum

Technically, the market is setting up very well here for
another leg up. BUT…a breakout does not occur until S&P 1246, DOW 10,722,
NASDAQ 220 are taken out ON A CLOSING BASIS. You can also look
at the highs for the small and mid-cap indices as their potential breakouts.

That said, even if a breakout occurs, this is still a split tape as I am
finding just as many uglies as good looking stocks.

How can this be occurring? After all, we have seen London bombed. We have seen
and are experiencing what looks to be the worst natural disaster in the history
of this country. We are seeing OIL PRICES at $65…and that’s after a $5 drop.
We are hearing about the impending burst of the housing bubble. We are seeing
the FED continuously raising rates. We are hearing about a potential recession
because of what happened in the the gulf coast. My answer…I don’t know. If you
told me a year ago that all this would be going on, I would have told you the
DOW would be back at 7,000 and we would indeed be in some sort of recession.
That’s why I have and will continue by the motto…"IT’S NOT THE NEWS, IT’S HOW
THE MARKETS REACT TO THE NEWS."

On top of the better action we have been seeing, I like:

• that WORLD MARKETS are still in gear. As I have told you, Japan looks to be
  just starting.
• that after only a few percent correction, the negative talk could be cut with
  a knife.
• that leading names have been MOVING OUT. I have mentioned to you names like
  
  (
  AMGN |
  Quote |
  Chart |
  News |
  PowerRating),
  (
  AAPL |
  Quote |
  Chart |
  News |
  PowerRating),
  (
  ADSK |
  Quote |
  Chart |
  News |
  PowerRating),
  (
  WFMI |
  Quote |
  Chart |
  News |
  PowerRating),
  (
  DNA |
  Quote |
  Chart |
  News |
  PowerRating). No question, when the leaders are working, the markets
  are usually working.

HOUSING and REITS continue to repair their recent nasty corrections. In
recent reports, I have mentioned that they were trying to put in a near-term
low…and so far…so good.

GOLD STOCKS as well as GOLD continue to emerge and move higher. I am looking
for a POTENTIAL investable move here in GOLD STOCKS. I will continue to address
this group if the move continues.

Gary Kaltbaum