Looking to the Nasdaq for Continued Leadership


Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
is the author of
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>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
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or call 888.484.8220 ext. 1.

Sector analysis time:

What’s not working?

Oils, gold, silver, and other commodities remain in their own
private bear market. Most commodity prices have been plunging. Oil has done a
bungee jump…with no ability to rally so far. Continue to stay far away from
these areas as they have shown no accumulation whatsoever.

With oil plunging, the transports have finally come back to
life with airlines still leading the way. In fact, we are seeing parabolic moves
in names like AMR and CAL. We are also emboldened that the rails have also come
back to life as UNP pops and laggard BNI turns up the right side. Tranpsports
had been lagging but the direct inverse correlation with oil prices has now
taken over.

We stated that housing was going back into its bear phase. We
stick with that stance as many names have now rolled over…and are breaking
down. You already know our thoughts on the overall housing industry.

We finally have to make note that the “used to be”
all-important SOX, continues to lag. We say this because for a decade, the SOX
has led the NASDAQ and NDX both up and down. Not any more as the SOX continues
to lag as the NASDAQ and NDX break out. There are many names in semi-land that
continue to act horrid…TXN, AMD, LLTC, NSM…for starters.

We do not like the action in many of the lenders. This bears
watching as ACF, WM, CFC, COF and LEND have either topped, broke down or have been
blasted. Mortgage REITs have turned to dust for the most part.

What’s working?

JUST ABOUT EVERYTHING ELSE. It is a positive that the NASDAQ
and NDX just broke out. As long as they stay above those pivots, all is well. It
is a positive that the Transports have come back to life as Oil plunges. It is a
positive that breakouts are back to working again. For several weeks, we saw
many failed names. It is a positive that so many leaders pulled back to their
respective 50 day averages, held and turned back up.

And as we have stated on several occasions, until major
indices break support or moving averages, the market remains with the benefit of
the doubt.

It is earning’s season. Be rest assured what looks great may
turn to dust and what looks like dust could turn into something great. Keep your
eyes wide open.