These Numbers Are Not Good—Let Me Explain

  • October 21, 2004
  • Gary Kaltbaum
I figured with all
the negatives I wrote about yesterday, I will
throw out one important positive occurring right now.

 

TECHNOLOGY stocks measured by the SOX, NASDAQ
100 and NASDAQ are now outperforming the rest of the market. While the DOW hit
yearly lows yesterday, the NASDAQ continues to NOT want to go down. How long
this lasts? Not a clue. It is just important to recognize that I am still
seeing earning’s blow-ups in TECH but the stocks continue to rally on the
numbers. This is a positive…for now. I am not so sure warning for coming
quarters is a good thing.

 

It is also a positive that the S&P broke the
support I told you about on an INTRADAY basis but CLOSED above those levels.

 

BUT…this does not change my overriding thoughts.

 

This market is going to remain difficult to play
because fewer than 50% of all stocks are in good technical shape.

Look at the Nasdaq vs. the Dow:

 

I am still seeing a ton of blow-ups. Accidents
don’t happen in bull markets.

 

I am NOW seeing too much bullishness. I haven’t
talked about sentiment in a while but it’s now time. The % of bullish market
advisors is up to an extreme 58.9%…with bears moving down to 22.1%. These
are not good numbers. Keep in mind, these are contrary indicators that tell us
how the masses feel about the market. When the weight tilts one way, normally,
it’s time to head the opposite way.

Gary Kaltbaum