The Action Has Arrived, Watch for the Downside
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
or call 888.484.8220 ext. 1.
For months, I have been telling you this market had become more narrow by the
day. For months, I have been pounding away at the NASDAQ/NDX as the leading
indices. For months, I have been saying that the NASDAQ A/D line has been
hitting all time lows because BIG CAP CITY had been working off the back of the
AAPLE, GOOGLE, RIMM, BIDU, CICSO and the like leading the way. Recently, I have been telling you that
the market had best not lose the NASDAQ/NDX.
Kids, yesterday, the market lost the NASDAQ and NDX…and in classic fashion.
It is in classic fashion as APPLE was just on the cover of Time Magazine. It is
in classic fashion as Barrons just had a cover entitled “TECH IS BACK!” I have
told you these types of cover articles do not happen at bottoms.
You need to know that many of these big cap tech names have moved
parabolically because money has come out of everywhere else to chase momentum.
Momentum cuts both ways because as soon as things top, the momentum boys jump
ship…and quickly. I would suggest to you that all these leaders are going to
get magnetized down to their 10 week moving averages. For some, that is a long
way from here. For others, they are already getting close.
I have backed away from all these names. My last sale was early Thursday.
Both the NASDAQ and NDX cut through their 10 week averages on massive
volume…and that’s not a good thing. I heard someone say that it is good when
these leaders are blasted because it is a sign of capitulation. I believe
whoever said that has not studied markets enough as you do not have anything
near capitulation after the first day down. These types of comments are folly.
On another note, I am hearing all kinds of talk that FINANCIALS should be
bought. This from people who told you to buy in recent weeks. Let me be clear.
FINANCIALS are in a brutal bear market. Bear markets do not just end. They have
to go through an arduous process. Yes…they will bounce. Morgan Stanley was up
$2 yesterday. Why? Because it was down $17 over a 6 day period. Do I need to
utter the “dead cat” line?
Again, I believe the NDX and NASDAQ topped yesterday. I do not know how long
it lasts or how far it goes. I just know it is the trade that has the biggest
crowd in it..and when things turn…look out. Expect some serious violent action
as analysts will come out in droves defending these stocks…but expecting
further downside. This also includes names like ORACLE, EMC, IBM, HPQ, QUALCOM
and others.
Gary Kaltbaum