Market Moving Steadily Forward
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.
Notwithstanding the short term action, which I will talk about in a second, the market remains in fine shape. In fact, it is only broadening out as laggard sectors are now coming to the forefront. In the past couple of weeks, the TRANSPORTS, RETAIL, HOTELS/MOTELS, FINANCIALS, MEDIA and REITS have all joined “the party” since the recent which started on July 13… but NEAR-TERM… I am starting to see the NASDAQ/NDX having subtle distribution… 7/30 big reversal day to downside… Monday/Tuesday last week had a light volume rally… 2 distribution days on Wednesday/Thursday and lighter volume rally on Friday… with a gap and stall. This isn’t necessarily a bad thing but I am in the camp that maybe the early leaders of the NASDAQ/NDX need some time and price here. You can notice big-cap tech leaders sat this past week while other areas moved. So shorter term, maybe we get a little pullback. I am seeing froth measured by the amount of $1 stocks on the move. I am seeing massive call buying and I am now seeing the move embraced. On top of that, all major indices remain stretched and extended… which eventually will be worked off by either a pullback or stalling action.
But I do not see a correction here of any magnitude for the simple reason everything is in gear. I believe there is zero chance of the 940-960 S&P area being breached… in fact, I think it is the new low to use and not the lows of March. You can see this action in every major index, country and almost in every single group. I continue to believe any pullbacks are gifts… and think any pullbacks will be contained… and any pullback would occur for one reason… things are extended.
In the last report, I told you the FINANCIALS were ready to move… and that they did. FINANCIALS of all kinds rallied in a frenzy in the past week. Many are asking why. I couldn’t care less. It is what it is… and any pullback is buyable. REITS also turned the corner in the past week even though everyone says the next shoe to drop is commercial real estate.
The new areas to look at are the breakouts in the RETAIL that occurred on Friday… but would like to see a little pullback. Same goes for the other consumer areas.
Lastly, the dollar rallied Friday but the market was not hit. This is a first for recent weeks and months as every time the dollar has rallied, the market was hit… so I am watching. But only GOLD was affected… with other COMMODITY areas just sitting… so I am thinking you should now watch the COMMODITY areas because many names are trading tight. Look at OIL SERVICES which pulled back right into the 50-day in tight fashion… a logical area.
I cannot find much I don’t like… just in the near term, recent areas that moved are extended… but that’s not bad. Any pullback will serve to work off the recent froth… but keep in mind it doesn’t mean the market has to pull back. I will be all over you if market decides to come in… in order to jump all over things at the proper time.
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