The Fight Is on Between Buyers and Sellers
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
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I had life all wrong. If
I had to do it over again, I would become CEO of Home Depot. I would
paint the walls, use better lighting in stores, piss everyone off, treat
shareholders like they were plankton…and then leave with a $210 million
package. On this subject, there is a lot of talk about what went wrong with Bob
Nardelli and Home Depot. There is all kinds of talk about how he handled the CEO
job. Let me be clear…some, not all of corporate America has gone to the loony
bin. The poster children are people like Nardelli and Dick Grasso who ran the
NYSE. It comes down to one simple question? How can the compensation committees,
who are supposed to be responsible adults, give out exorbitant packages to
people who did not start these companies from scratch? Think about it…$210
million dollars…and that is just the OUT THE DOOR package. In the “honest”
world, $50 million would be too much…$25 million would be too much. This is
what happens when the inmates run the asylum. By the way…and by no
coincidence, the head of the compensation committee for Home Depot was the head
of the compenstion committee for the NYSE. And what does Home Depot do?…The
next CEO is Nardelli’s right hand man. The good news is that this example is the
exception to the rule as I believe the majority of corporate America are not
slime.
I dont know how to describe Wednesday’s action
but I will say that if the market did not rally back, it would have been one of
the most ominous negative reversals we would have seen in a long time…but the
market did rally back…so let’s just say, the fight is on between buyers and
sellers. Normally, after a move up, when we start to see this type of action, it
is a sign of a pending change in the market’s direction. As of this second, I
believe you have to start thinking more defensively as the market has not had a
meaningful correction in quite a while. But I have more important things about a
few sectors.
I believe the HOMEBUILDING move off the recent
lows is probably over. Technically, the series of higher lows has been aborted
and believe we will see downside testing. You know how I feel about the overall
homebuilding business. You cannot spin what we are seeing in lower prices,
massive inventory as well as cancellations.
Say good-bye to most COMMODITY areas. OILS, GOLD,
SILVER, COPPER, STEEL, ALUMINUM and the like have rolled over not only as
COMMODITIES but the underlying stocks. Any bounces are sellable as support
levels have been broken badly. OIL prices have broke recent lows. COPPER prices
have broke recent lows. GOLD and SILVER prices have traced out ominous tops.
All this and we are just in the second day of the
year. I will be watching support levels and moving averages very closely on the
major indices at this time. Frankly, I am one that would love to see a
correction. I believe in order for markets to ultimately go higher, markets have
to wipe the smiles off the bulls faces and throw some bones to the bears. Too
much bullishness and too much complacency is not a good thing.
Gary Kaltbaum