It’s Not Over Yet, but There’s Some Short-Term Hope
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 Alerts
click here
or call 888.484.8220 ext. 1.
Running off at the mouth!
You must go to youtube and see Ron Paul school Ben Bernanke during Congressional
testimony. Bernanke looked like Ralph Kramden appearing on the $64,000 question
when asked who wrote Suwanee River. “Huminah huminah huminah…Ed Norton?”
Angelo Mozilo AKA “THE TANNED ONE”…the CEO of Countrypuke Financial claims
his company is a victim of circumstances. In the Comedy Central quote of the
year, he stated that it was the borrowers who forced Countrypuke into lowering
their mortgage lending standards. I swear I did not make this up.
I think I may have to quit my job and become a securities lawyer…doesn’t
matter which side you represent. I expect legal budgets are going to go up 100
fold in the next couple of years…and rightfully so. Get ready to hear the two
words “class action” several hundred times in coming months.
In past reports, I have told you that my unofficial Kaltbaum retail indicator
was quite bearish…as my visits to many stores were a horror show. I have
believed that housing and retail were in their own recessions but held off
saying or thinking the whole economy was in recession. My main reason was that
the overall stock market had not budged. I have never seen a stock market NOT go
down in advance of one. I now have to alter that stance as the market is now
coming in…and must also add another bit of important evidence of an economy in
trouble….and that is the volume at our container ports. An article in American
Shipper Magazine (yes,there is a magazine for shipping) provided evidence that
things are slowing down rapidly at our ports. For me, this has always been one
of the top clues to economic growth. The article stated things are slow and that
volumes have continued to decline. Businesses are thinking differently these
days…and are slowing down their purchasing. These businesses are the smart
money.
The most important point I wanted to make today is the same point I have been
making for weeks…which finally came back to haunt the market. And that is
while the NASDAQ and NASDAQ 100 were just at new highs, the NASDAQ A/D line was
at all-time lows. As I have told you, these types of negative divergences always
end badly. The NASDAQ and NASDAQ 100 were living off the moves in GOOGLE, APPLE,
RIMM, CISCO and several others. Everything else was sold off to buy these few
names. When the music stops, momentum to the upside become momentum to the
downside. Most all the leading big cap TECH names were absolutely obliterated
this past week. The most important thing you need to take away from this is to
NOT listen to all the noise you are going to hear. You will hear:
“REITERATE BUY AND LONG-TERM PRICE TARGET!”
“FUNDAMENTALS HAVE NOT CHANGED!”
“SELLING IS OVERDONE!”
“SELLING IS AN OVERREACTION!”
You see, this is what you always hear as things are going lower. Wall Street
has never learned and never will learn. I do not know how long this carnage
lasts and how far it goes. I do know that to not listen to the market is
folly…and the market spoke loud and clear this past week. With the break in so
many BIG-CAP TECH names, there is not much to help the NASDAQ advance further.
For sure, there is going to be bounces…violent bounces. Do not be sucked in.
Bounces at this juncture are now sellable…not the other way around. This move
in the NASDAQ and NDX is simply a joining of the 70% of the market that is
already in a bear phase…some in a major bear phase.
I do believe something almost bullish occurred in the past couple of days and
that is the down and out FINANCIALS may be sold out in the near term. After all,
many have crashed in the past two weeks. Again, I would not be fooled. When a
Morgan Stanley drops from $67 to $50 in 2 weeks, a bounce will occur.
Notwithstanding another not so surprising blow-up in another financial name, I
believe we may see a little better relative strength over the next few days.
My last thought is about the Fed. The markets are in the midst of giving
everything back from not only the Fed rate cuts…but the trillions that the Fed
has dropped into the system over the past months. Food for thought.
Gary Kaltbaum