The market gets the benefit of the doubt, for now

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.
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Sports Illustrated wrote up some outtakes from the new book on
Barry Bonds’ supposed steroid use. I was not there so I don’t know. Just because
he doubled in size…what does that mean? My issue with SI was that one of their
pages was titled “THE CONSEQUENCES.” The page talked about Bonds not getting
into the Hall and things like that. SI got it wrong. They had a chance to
explain the real consequences of steroid use. My lovely wife had both of her
hips collapse because of steroids to save her life. Years later, her shoulder is
now collapsing…all because of steroids she had to have all the way back in
1987. The consequences…the consequences have to do with Bonds possibly having
a heart attack in his sleep like so many others who have done steroids. The
consequences is the potential for brain tumors. The consequences is for your
hips, knees and shoulders collapsing. In case you did not know, the consequences
of doing steroids are all of the above and many more. All these athletes may be
improving their numbers and their salaries but who’s kidding who?

Another week that I waited to write a report…and I am happy about that. We are
seeing a ton of Jell-O move on the plate.

OILS held the support we outlined for you. They are now in bounce mode. Most are
still trading below moving averages and probably need more time to repair. I am
still of the mindset that longer-term prices are going higher…but always give
the weight to what is happening now. The best name is
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as it has
already broke out…showing tremendous outperformance.

Other COMMODITY areas remain mixed but improved. They are bouncing along with
the OILS.

The SOX did indeed work itself lower. Tuesday’s action is the first up day after
a 10% drop. One day does not make a trend but when the SEMIS get going…they
get going. There are still plenty with ugly charts though and need to step
cautiously here.

The NDX again held support TO THE PENNY. 1634 was the low on the first day of
the year. On Friday, it put in a low at….1634. Draw a line across 1634. That
is your intermediate-term support for the NDX…and I WOULD CONSIDER IT VITAL

The NASDAQ had short term support at 2240. On Friday, the NASDAQ bottomed at
…2240. Draw a line across 2240. That is your short-term support for the
NASDAQ. The NDX has been much weaker than the NASDAQ. The NASDAQ is back above
its 50 day average.

Yesterday, the BOND MARKET, HOUSING, UTILITIES and GOLD put in near-term lows.
The BOND MARKET has been getting hit hard…but in recent days, everyone turned
bearish on BONDS…thus the bounce. HOUSING has been absolutely trashed. They
have been stretched and extended to the downside. This move brings the group
back towards the norm. Keep in mind, their charts are very wide and loose and
tough to play.

I am bringing up these lagging areas first for a simple reason. When the lagging
areas put in lows, normally, it helps the overall market…thus the good looking
charts in the DOW/S&P. The DOW-types have been acting well for weeks and
continue to be the lead dog. The S&P, once again, is setting up to break out of
a short base on the back of the recent move.

What else?

The BANKS/FINANCIALS continue to act well. We have told you they have been
acting just fine. The charts of the
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and the
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evidence this.
The RKH pulled back perfectly into support and is now trying to move higher.

The BROKERS…which have been acting suspect…popped up on monster numbers by
Goldman. ..another positive. This move has the potential to change the recent

GOOGLE undercut support and rallied above it. Near-term, that’s a positive for
you maniacal Googleites. We have been negative on it since approximately $420.
Methinks we go neutral here. Would just do nothing.

I am somewhat amazed that the market has taken so many body blows in individual
names like
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and a few others. It feels like this market
has 20 lives. Several times in the past weeks, I have thought the “market” was
hanging on a ledge…but every time, it was thrown a rope. The most important
thing you need to know is that until support levels break…which they have not,
the market continues to get the benefit of the doubt…spastic or not.