The Dow is Popping for a Reason
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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American Express – AXP breaks its downtrend and
rallies up its right side on heavy volume.
Boeing – BA breaks out on huge volume but
earnings come out this week.
Caterpillar – CAT, despite suspect numbers, gaps
up and breaks its long downtrend.
Honeywell – HON breaks out of a tight base on
more than 3x average volume. Just note that today’s price in HON is 1997’s
price.
Intel – INTC..even .the puke is romping up the
right side. Earnings and sales down…and of course, they called for second half
improvement even though they lowered numbers for qtr 2.
Johnson and Johnson – JNJ gaps up on earnings and
changes its trend. The DRUG group has been getting legs the past few days.
Coca Cola – KO breaks out on accelerating
earnings.
Merck – MRK gaps top the breakout on powerful
volume. A whopping 8% growth for the quarter.
Exxon – XOM breaks out on heavy volume…as
market buying mega-cap OILS.
Obviously, this is why the DOW is popping here.
Most of these DOW stocks are popping of of earnings. For them, it is good. I do
not want to throw cold water on what I am seeing but I am just letting you know
that for this second, this action is reminding me a little bit of last April. At
that time, the NASDAQ/NDX were laggng while mega-cap defensive-type issues were
leading the way. Then May showed up. Again, I do not want to throw cold water
but I really want to see the NASDAQ/NDX/RUSSELL 2000 to confirm even more. We
just came off a gross drop, a follow through only 3 weeks from the top…and now
this.
The good news is what is working. The NEW HIGH
LIST has been expanding…my positive group list has expended…even the SEMIS
are trying to come up the right side. They had been lagging. I just want it to
be my job to keep an eye out for what could go wrong based on the omnipotent
market talk that is pervading the air. You know…I am actually hearing the
market will not have a bear ever again. I am serious. There are those that are
uttering the words we never want to hear.
I would stick with the mega and big cap stocks. I
am not seeing a lot of power in the Oneill-type names that I want to exploit. In
fact, just the opposite. The IBD 100 was up only .5% last week while the DOW was
up over 300 points.
Lastly, I have to make note of the OIL STOCKS.
Many are now in one year bases…this after a move hiugher. I will be looking
for breakouts in these names as I believe there is a chance that OIL STOCKS are
the TECH stocks of the 90s. They ran up…went through a long bear
phase/consolidation…and now may be ready to move out. When you have a chance,
scan the weekly charts of the OILS and you will see what I am seeing.
Gary Kaltbaum