Stay on the Defensive
Gary Kaltbaum is an investment advisor
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
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I am beginning to believe Bernanke is Stork from
ANIMAL HOUSE. “What are we supposed to do you moron?”
Now do you see my problem with Bernanke and
Paulson and Greenspan? Forget the fact that all have been predicting HOUSING
bottoms. In fact…Paulson called for ANOTHER bottom on Wednesday. I don’t even
have an MBA and I can tell HOUSING isn’t even close to bottoming. Forget also
the fact that they enabled the LENDERS to commit fraud and give out loans they
never should have. My biggest problem is this statement out of Bernanke on
Wednesday: “UNCERTAINTIES AROUND U.S. ECONOMIC OUTLOOK HAVE INCREASED SOMEWHAT
IN RECENT WEEKS!” No kidding! With all the numbers he gets…with all the
higher-ups he gets to talk to…Bernanke continues to be nothing more than a
reporter of the news…and is always behind the news…and my worry is that he
will be too late to react to what already has been baked in the cake.
In my last report, I wrote:
“The main problem with this follow through is
that it has come after only a 3 week correction. There simply has not been
enough time for stocks to form longer bases to buy off of. Studies have shown
that follow through days occurring after such a short correction have less
chance of success. This move does not give license to buy with abandon. The good
news: if this move is going to have staying power, we will see more and more
stocks breaking out of bases. That’s all we can ask for.”
The market had its first bout of professional
selling just five days after a valid follow through. I am afraid this is
starting to play out like the other failures…and that’s not good. One day does
not kill…but this is after Tuesday’s ugly. I believe any more action like
Wednesday kills the rally try. Most major averages have now broke below moving
averages but more importantly, I cant begin to tell you how many stocks are in
such poor technical shape. When so many stocks are broken, it is very tough for
the market to get going. I do need to make note of several things I am seeing
underneath the surface.
FINANCIALS continue to act horrid. I do not think
the market has any chance when the BANKS, LENDERS, S&Ls and BROKERS are acting
so poorly…the BROKERS especially. There is no doubt the BROKERS are a terrific
proxy for the market.
RETAIL is now starting to roll over…with many
poor individual charts.
Seeing lower tops in many world markets.
The TRANSPORTS ramp and give it all back in 3
days…not good.
Most DOW stocks now topped, toppy or topping.
I suspect we are going to see markets head
towards recent lows. At the very least, you should be very wary of the action
and stay on the defensive unless we start to see accumulation as well as a
plethora of stocks breaking out of bases…which they are not many of.
Gary Kaltbaum