Short Term Issues?
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.
I continue to be amazed by how this market is disrespected. This is most definitely the Rodney Dangerfield market as many believe it is not for real, not sustainable and is only up because the government is buying. I couldn’t care less why. I care about what I see. In my last reports to you, I told you the market was in fine shape, that reits and financials were about to join the upside and that the nasdaq was showing stalling action. Since then all three have come to fruition… but keep your eye on the big picture and not the short term.
The big picture remains fine. The move above 956 on the S&P really ignited the market… off the secondary buy point which started on July 13th. Most sectors are in uptrends, most stocks are in uptrends and frankly, I am hard pressed to find things that are wrong. As I do my scans, about the only areas that are worrisome are RETAIL-AUTO PARTS, SOLARS and EDUCATION. This is the exact opposite of what we saw in the bear market. I have been saying on tv and radio that pullbacks are gifts but amazingly, the market refuses to pull back. Since July 13, there has not been one that lasted more than 2 days. And when the market had a real scare day on 8/17, it just turned right back around and ignored it. So I stick with the stance that any pullbacks are a gift, especially if we have a pullback like the one we saw in June/July in where markets pull back into support and the 50-day moving average. The 50-day is now coincidentally sitting at around the recent breakout of the 956 S&P. Of course, I am being asked all the time how the market can be going up when the economy is in bad shape… with a socialist in the White House… with such a large deficit… with revenues down year over year. All good questions. My guess is that the market is sniffing out something… I think.
Now shorter-term, things do feel a little heavy. But the shorter term to me is a lot less important than the overall action. But I am seeing some signs the market is due to at least rest. The NASDAQ, indeed continues to churn around this area. I make note that on Friday, it could not rally the “good news” out of Intel
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PowerRating). In fact, the NASDAQ finished near flat after opening up hot… possibly resulting in a failed breakout of the short trading range. So maybe… and the operative word is MAYBE… the market has some work to do here. It would be quite normal. I am seeing a little too much froth and while this market still doesn’t get the benefit of the doubt, I am seeing bullishness finally creep in as the percentage of investment newsletter writers that are bearish… has now dropped below 20%, indicating serious near-term complacency. But don’t let any pullbacks turn you bearish as I believe most bull phases do not just last 5-6 months though the percent gain off this move has been over the top.
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