Market Back in Uptrend
Gary Kaltbaum is an investment adviser with over 25 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.
Despite the numbskulls in Washington…despite another bad employment number…despite the Koreas…despite Wikileaks…despite all the nonsense we are seeing on a daily basis, the Fed induced market continues to roll as the small correction ended this past week leading to the market resuming its uptrend. Yes…I said Fed induced. The Fed’s only goal right now is to create another asset bubble as everything else they have tried has not worked. And please…do not believe one word Bernanke said on 60 MINUTES last night. Did he actually say he was NOT printing money? But who cares. The job here is to stay in tune with the market and the most important thing you need to know right now is that all major indices held exactly where they should on any pullback/correction…and that is the 50 day/10 week moving average. For years, I have taught you that in bull phases, markets ride up above the ascending moving averages and pull back into them. This last pullback was classic. Just go look where the S&P held this past week.
Picking it apart, except for sentiment, I do not have many complaints. Sentiment is getting out of hand but remember, sentiment is a secondary indicator. As far as sentiment goes, insiders are selling big time, bullishness has picked up, front cover articles are bullish and the almighty strategists are starting to come out with very bullish 2011 targets. Taking that away:
The RUSSELL broke out of a cup and handle pattern into new high ground.
The TRANSPORTS broke out of a cup and handle pattern into new high ground.
The SOX…ditto.
The MIDCAPS…ditto.
The SMALLCAPS…ditto.
The NASDAQ and NDX are on the cusp of breaking out.
The DOW and S&P 500…ditto.
The NEW HIGH LIST has picked up markedly.
The worst groups, FINANCIALS and HOUSING, pulled back to the low of their ranges after failing recent breakouts…but then ramped out of good patterns. Most other groups are in shape.
OILS have joined the COMMODITY parade as a bunch broke out to new highs.
The DOLLAR is swooning again. There has been and continues to be a direct inverse relationship between a dropping dollar and a rising market.
So…no real complaints. Near-term, a pullback is due…but most patterns are in good shape where, for now, any pullbacks are buyable…that is until those moving averages are broken. But if seasonality means anything, December should do fine. 2011 could be another story but we will cross that bridge when we get there.
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. Securities offered through Wunderlich Securities Inc.