More Setups Are Showing Up — But On The Short Side

September 15, 2004
Gary Kaltbaum

I believe the move that
has been going on the past few weeks is nearing an end. A
pullback/consolidation/breather is warranted and expected. This is not a long
term call. This is not an intermediate call. This is a short term call. I say
this for several reasons.

Major indices are now in the meat of resistance.
It would actually be healthy if the market pulls back, retrenches and then
moves higher. My biggest problem is that volume has not and still is not
powerful. I do not think the market can get legs without volume.

While more set-ups have been showing up, I still
see a ton of set-ups on the short side. I am not too sure that is a good sign.

The SOX has come straight up since Thursday
and has hit its first resistance in the 390-400 range.

I suspect a pullback is in order as the charts of the Semis still have
a ton of repairing to do. Repairing gets done over time…not in days.

Just go a little slower here. I am looking and
hoping for better entries on light volume pullbacks. If volume picks up on any
pullback, that will be another story.

Lastly, I did want to make note of one area that I
am seeing powerful money flows…yes…the Internets. AMZN, ASKJ and
YHOO have turned the corner…and on volume.

Ebay continues its juggernaut performance
and Google is not getting some institutional sponsorship. I believe we
may see more of the same. Use shark repellant though.