This Is My Number One Indicator
Nothing monolithic to talk about today…just a
few things we are noticing which POTENTIALLY can be important.
This remains the toughest tape in a very long
time. The market had a clear trend to the downside. It is now putting up a
fight at the latest support levels. This is normal.
FINANCIALS are doing better. This could be key.
We have always been a watcher of the FINANCIALS. Many seem to be coming out
of their recent ugly downtrends. REITs are back to being on the strong side
and INTEREST-RATE SENSITIVE stuff is catching a bid. This is occurring on
the back of a more cooperative interest rate backdrop.
OILSÂ are croaking. This is also good news as not
only is the commodity on the verge of breaking down on an intermediate
basis, but the stocks are also following suit.
CYCLICALS continue to be slammed. More on that
in a minute.
There are still many more bad-looking stocks
and groups than good looking. This is our number 1 indicator. Every night
we scan 2500 stocks and 200 groups. There are stocks breaking out but few and
far between while NEW LOWS continue to far outstrip NEW HIGHS.
That all said, if major indices can break above
their recent highs, we will get another leg up into the meat of resistance
sitting just overhead.
If at any time last week’s lows break…another
vicious leg down will ensue. I am more in the camp of the market trying to
hold near-term but you never know. Our conviction is low at this time.
We are all NOW hearing that the economy is
slowing. GDP this morning was less than expected. Just keep in mind, this
column told you weeks ago this would occur. How did we know? The market
dictated it by having rates come down and CYCLICALS being trashed. Remember,
we believe the market is the best forecaster…not opinion.
Gary Kaltbaum