Kaltbaum: Jello Moving on the Plate
Gary Kaltbaum is an investment adviser 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.
Most of you know I never pull punches when it comes to what our government has been doing in recent years. Everyone should recognize that the words “RUN AMOK” should come to mind whenever we look at what has been happening in Washington DC. The amount of OUR taxpayer dollars that has been spent and wasted is immeasurable. The amount of debt piled on our backs by 535 people will never be able to be paid down. We are now sitting on $13 trillion of debt with this year’s debt a whopping $1.4 trillion. But yet, it never ends. Why? Simple! They just don’t care. They are good at 2 things…spinning and spending other people’s money. The best analogy is the S&L owners back in the 80s. You remember what the S&L crooks did with other people’s money. Only we can stop it. After all, it is 250 million versus 535. The latest nauseating facts:
According to a USA Today study:
Average pay for a government worker is now approximately $71,000… $40,000 higher than the private economy.
Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months – and that’s before overtime pay and bonuses are counted.
Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009.
When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
I have read all the reasons why. This does not matter to me. This continues to be a no holds barred wheel of fortune…and it is our money…and they don’t care. Despite the deficits, they are now about to pass another budget bill that gives most federal agencies generous budget boosts. There is no recession in DC.
The markets…
THE MARKETS remain tightly range bound. Do not expect it to last. I have been telling you that I did not expect any trouble until into the New Year, but have also told you there has been deterioration in several areas. Just keep in mind, after 8 months of upside with no decent corrections, things get tougher…and they certainly have.
1083-1119 S&P…10171-10513 DOW…2155-2214 Nasdaq…1759-1815 Nasdaq 100….those are your support and resistance areas…very tight ranges being played out. Again, the guess remains they do not sell the market off until next year, if at all…and see nothing to change the guess. I say this because financials have been going down as well as oils…and the market hasn’t budged. All it would take is a bounce in those areas and the major indices could move out. Until the 10 week/50 day moving average is breached, the market gets the benefit of the doubt.
Yes…there has been distribution and yes, the financials are worrisome but yes, the market has just sat. But we cannot forget the FINANCIALS. They have been a harbinger of things to come in previous down legs. Just remember 07 when they started down first. So far, they have had little effect.
I also need to mention that the dollar has finally risen handily above the 50 day average for the first time since March. But so far, it has only affected commodities like oils, gold and miscellaneous metals. The market has not reacted. Remember the link. Since March, the market has moved in an inverse relationship with the market. Maybe just maybe, the link is starting to break as the market may be thinking a stronger dollar is because of a stronger economy and not investors buying the dollar to get out of risk assets. As far as GOLD, it has finally pulled back but the pullback has been harsh. GOLD stocks continue to underperform with most now trading below short term moving averages.
AIRLINES are getting a big bid. They are now fully up their right side on volume. This is an outcome of plunging oil prices.
SMALL CAPS are still underperforming the larger caps but have been playing a little catch-up in the past week.
The REITS are acting well and setting up to go higher…this, in spite of the bearish talk.
UTILITIES have broken out.
The TRANSPORTS are on the verge of new highs.
If the market cannot break out above resistance and internals go south, January could be troublesome. So far, we are seeing nothing more than a few areas going through short term bearish phases. Normally I would say to take the holidays off. This year, I would pay attention during the holidays. Any break below the 10 week/50 day moving averages would be worrisome. A break to the upside…and we get another leg up.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.