These sectors are topping out
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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Very important crosscurrents we think you need to know about.
Brokerage stocks are topping. Simple as that. They became
stretched and extended and are now undergoing corrections. We make note that LEH
has already broke below its 50 day average.
We are finding many Retail stocks topping. These stocks have been strong but now
feel like the near-term top has been put in.
The election outcome has not been friendly to HMOs, Drugs, Defense and the VZ-T
merger. That is reporting the news though. We’ll find out soon enough if that
was a knee-jerk reaction or something that will last.
Homebuilders are indeed breaking down again…and should be
avoided. They teased the upside for weeks…but the party now looks to be over.
And I repeat for the hundredth time…this correction will not be over in
months. In my studies of past cycles…after a big move up, it takes more than
months to change the playing field. I stand in amazement that Greenspan came out
of his cave this past week to tell everyone the correction is almost over.
Commodities of all sorts are emerging. Steel, Aluminum, Gold, Silver, Oil…you
name it…have either turned the corner or are breaking out of a new range.
Would love some pulling back in here. We believe Commodities are emerging
because the Dollar is starting to submerge again. Notice how the Euro is about
to break out against the Dollar in the following chart.
Very simply, we think the themes are starting to change here. Whether or not
these themes affect the major indices is another story…but we will be
watching. We did get another decent distribution day on Thursday and I am seeing
a decent amount of breakdowns…but not enough to affect the major indices so
far.
Gary K