The 5 most important sectors to watch

March 22, 2006
Gary Kaltbaum

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
Alerts

click here. 888-484-8220 ext. 1.

You would have liked us
to tell you that the market would open up on Tuesday poorly…but the
SEMIS would lead…then the market would reverse up and rally strong to 12:55 pm
with the SEMIS rolling. You would have then liked us to tell you that the market
would completely fall off a cliff in the last 3 hours…reversing the original
reversal…and the SEMIS completely reversing down. You would have liked us to
tell you all that, but the guy who speaks to dead people couldn’t have told you.
We do not know what to make of today…just that negative reversals like we all
saw usually lead to some downside testing. Of course, the downside testing will
last 3 hours before reversing up for the next three hours before reversing back
down.

Shorter-term, expect at least some more downside just based on the fact things
got extended near-term combined with Tuesday’s reversal. Pullbacks are a normal
course of business. At this point, we expect any pullback to be controlled and
rotational for the DOW/NYSE-types but now have to keep a close watch on TECH.
That was one ugly reversal in TECH Tuesday. No reason to go any further than
that this second.

Sector analysis:

UTILITIES continue to act draggy. UTILITIES have been another important area to
watch throughout the years. This goes hand in hand with the BOND MARKET which held support right where it needed to. A break below 110
(support) would not just be bearish but extremely bearish and could have serious
implications for the market. So far…no problem. We also want to make note that
if the 10 year breaks above the 5% yield mark, it would break out above a
multi-year downtrend. We believe, ultimately, odds do favor this but will deal
with it only if it occurs.

HOUSING bounced but the bounce was anemic and fleeting. We continue to believe
HOUSING stocks are in their own private bear market and should be avoided.

Lastly, the all-important SEMIS. If the bounce on Tuesday was it, they are in
bigger trouble than we thought. Many are now trading way below support and
moving averages. This needs to be watched closely. As you know, we believe the
SEMIS will continue to be a great indicator for the market.

Gary Kaltbaum

The 5 most important sectors to watch

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources