It’s time to focus on these stocks…

June 8, 2006
Gary Kaltbaum

Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of href=”https://tradingmarkets.comtmu/store.site/swingtrading/Books/6026/”
>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

href=”https://tradingmarkets.comsubscriptions/details.cfm?item=5736&subcat=st”>
click here

or call 888.484.8220 ext. 1.

There should be no doubt in your minds that this past weekend,
the Fed had a conference call over tea and crumpets to entirely change their
stance from just the week before. In one week, they went from “inflation is
well-contained” to “inflation is at the high end of our targets.” Did these
trend followers finally see that our beloved Hostess Twinkies have had a sharp
increase in price or did one of the Fed heads give his chauffeur the day off and
actually pump their own gas? We must tell you that we thought we were actually
being hard on the Fed in past weeks but after watching these stumbling,
bumbling, fumbling motor mouths, we now think we have been too easy. If you saw
Brenda Buttner’s rant against Bernanke on Fox News Channel on Tuesday, you know
that we agree with her 100%. If this Fed wants to send this economy into
recession, they are doing exactly what they need to do. But we don’t need to
guess, just look at what the market is doing. We have always believed the market
is the greatest forecaster and right now, bulls should not like what it is
saying.

What we are seeing continues to be classic bear market action. We talked about
the Fed but we really don’t care why something happens. You can blame it on the
Fed. You can blame it on Oil prices. You can blame it on 6/6/06. Doesn’t matter
to us. Our job is to just interpret the tape. The market did not just get into
trouble. it was deteriorating weeks before the May 11 top. Here are our latest
thoughts.

The top in GOLD, SILVER, ALUMINUM, COPPER, STEEL, OIL and every other commodity
is now gaining teeth. We told you these areas topped out recently and now things
are getting ugly. We would not commit one dime to this group that just toped
after a climax run. Longer-term, we think there is a chance these areas are
still in play…but until we first see a place where the bleeding stops, there
is nothing to think about.

The SOX just broke another area of support. Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) looks headed for
the low teens. We continue to be amazed by the complacent attitude toward this
group that once again has led the market down.

The Dow has finally broke decent support at 11,039. Keep in mind, the Dow will
continue to hold up better than the rest of the market…so it is of import that
it is now starting to gag. 10,880 is the 200-day
moving average.
A break below and the Dow joins most of the rest of the major indices in bear
market territory.

WORLD MARKETS continue to get smoked. EMERGING MARKETS are in a mini-waterfall
here as the illiquidity of these markets are now causing problems. Even the
strong JAPAN has completely broke down.

Gary

It’s time to focus on these stocks…

BUY THE FEAR, SELL THE GREED

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