Poised to Break to the Upside
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.
As you know, I have been telling you that the markets were tracing out a tight trading range with definable support and resistance levels. With last week’s action, I believe odds now favor a move to the upside and out of this range. That said, never jump the gun. Here are the important resistance levels: DOW 8591…S&P 930…NASDAQ 1773 has already been breached by 1 point…NDX 1436…which it is sitting on right now…RUSSELL 2000 512.
Now…don’t ask me what the heck happened at 3:55 pm on Friday as the market had another mystery ramp. I am over the conspiracy theories and just want to concentrate on the evidence at hand. Yes…we had the usual end of month window dressing but for me, everything counts.
Sector-wise, I hope you have been reading these reports carefully because in advance, I talked about the emerging COMMODITIES off of their 7 month bottoming patterns. This included OILS, STEEL, COAL, METALS/MINING and the like. All have completed the process to a certain extent and all can be looked at on pullbacks into support and/or moving averages or on further breakouts. Many names are in secondary bases of 3-4 week duration. Do recall I called the commodity top to the day back on July 2, 2008.
On top of this, I told you that the dollar was in trouble, bonds were in trouble and that gold was ready to move up. This also has come to fruition. Last week, I told you that bonds and the dollar were oversold and were due to bounce. This occurred sharply for bonds but the dollar continues to act horribly. I would make note that the dollar is deeply oversold. Any bounce would probably correct the commodities. But the major trend is down for the dollar as the world recognizes the mistakes by both past and present administrations with their wayward spending habits. This administration simply does not care about the future obligations of this country as it is not their money. They are only good at spending other people’s money…and unfortunately that’s you and I.
As far as gold, very simply, a break above the old highs will complete a massive longer term base on base that should be looked at. Gold is now starting its 15 month of a trading range on top of the last big breakout. Remember, the longer the base, the bigger the potential move. I am long and am looking to add.
I have been asked recently about my lack of rants in these reports lately. I promise I will get back on track with that…but I did not want to confuse the issue. This report is about the market first and foremost…and with bear market lows potentially in, I wanted to stay on point.
Another question I receive day after day has to do with how can the market go up with so many stupid things being done by our government and with the economy still in rough shape. The first answer is that I only care about what the market is doing as it is the final arbiter. But my second answer is simple: with zero percent interest rates and trillions of dollars being rained down out of nowhere, the market has a great chance of going higher. The issue for me is not today. it is down the road. Repercussions of bad policy do not usually show up for years…just think Greenspan and the bubbles he caused.
Lastly, the new high list is slowly expanding. For sure, there is still not a big list but that is because of how deep the bear market was. Please keep your eye on this list on a daily basis because all big leaders eventually show up 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.