This Group Looks Suspicious

  • November 22, 2004
  • Gary Kaltbaum

There is very little doubt in my mind that FINALLY,
the market hit a short-term top on Friday. After a “straight-up” move for the
better part of 3 weeks, it was bound to happen somewhere. Do not listen to the
noise blaming Greenspan, the dollar or oil. It was just the market’s time to
pull back and digest the recent gains. This short-term top coincided with
several deep overbought conditions. Put/calls hit a number I haven’t seen in
months. Everyone leaned bullish AFTER the move. BUT…in no way is this THE
top. As I have always said, anything can happen. I just play the odds. If
things change, I will change with them. Right now, odds favor, this is a
normal pullback into support…nothing more than that. Take a look at the
chart of the S&P. 1163 was the breakout point but there is a case for better
support in the 1142-1150 area. As long as these areas hold, all is well. 


 

As I said in my last report, there is nothing wrong with taking profits in
those areas and stocks that are extended while buying into newer names that
are just emerging. This type of rotation is just what I want to continue to
see on a daily basis. I also want to continue to see low volume on the
pullbacks to tell me it is nothing more than profit taking. So far, so good.

 

Other notes:

 

GOLD remains in fine shape as the dollar continues to sink. 

 

OIL put in a low on Friday and now looks to be headed back up to its recent
highs.

 

One negative I am starting to see is suspicious action in many FINANCIALS. I
have been negative on Citigroup and JP Morgan…and nothing in their action
tells me to change that stance. Both these names have shown an inability to
keep up with the market.

 

^next^

 

Lastly, now is a perfect time to cull weakness in your portfolios. If your
stocks have not gone for the ride in the past 3 weeks, there may be problems
on the horizon. It is easiest to isolate weakness when the market is strong.
This is one of those times.

 

What am I thankful for?

 

I want to thank my family for always being there for me.

 

I want to thank my partners for all their hard work.

 

I want to thank all the wonderful people at FOX NEWS CHANNEL for taking a
chance on me a couple of years back. You know who you are and how I feel about
you.

 

I want to thank everyone at Tradingmarkets.com for giving me a place to voice
my opinion. Special thanks to Brice and Eddie for being there for me every
minute of every day.

 

I want to thank all my affiliates and Businesstalkradio Network for airing my
radio show.

 

I want to thank all of my readers and listeners for putting up with me on a
daily basis.

 

I want to thank David Stern for doing the right thing and sending the right
message. (had to put that one in)

 

At this time, my staff and I want to wish everyone a happy and healthy
Thanksgiving.

Gary Kaltbaum