This sector’s gone parabolic! Buy it on pullbacks
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 “Investor’s Edge” on over 50 radio stations. If you
would like a free trial to Gary’s Daily Market Alerts
If I had a dollar for every person asking me about Friday’s volume, I would be
in Monaco right now. Volume was very heavy because of QUADRUPLE WITCHING…but
IT COUNTS! I am hearing people say that Friday’s move doesn’t count…but they
are wrong. EVERYTHING COUNTS. Please deal with reality. The reality is the
volume was skewed, but the move counts.
The tape remains split. Even if the major indices move to new highs, (AND I
SUSPECT THEY CAN) fewer and fewer stocks are working. This is classic later-stage action as the market becomes more concentrated . This is evidenced by how
many stocks and sectors are in their own private bear market. They include,
RETAILERS, AIR FREIGHT, ALUMINUM, AUTOS, DISK DRIVES, PAPER, CHEMICALS, INTERNET,
NEWSPAPERS and HOUSING. As you know, I called a top for HOUSING several weeks
back and have watched them bounce ever since their initial trashing. The bounce
is now over. HOUSING looks lower on the back of higher rates. Just look at the
charts of
(
TOL |
Quote |
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News |
PowerRating) and
(
HOV |
Quote |
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PowerRating). These patterns are gross. Notice the high
volume drop and the low volume bounce…followed by another high volume drop.
FINANCIALS may have turned the corner for the near-term. Notice how the RKH
shows demand every time it has hit around $132.
The XLF also looks
poised to break out. Simply put, if the S&P is to break to highs, it will be
because the FINANCIALS are finally starting to participate a bit. Mega-caps like
(
BAC |
Quote |
Chart |
News |
PowerRating),
(
STI |
Quote |
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News |
PowerRating) and others…which have a big influence on the S&P…moved off lows.
Whether or not they get legs or not is another thing.
GOLD has gone parabolic over the past few days as the momentum crowd decided
to join the move. This looks like a move of longer-term consequence and can be
bought on any anticipated pullbacks.
SEMIS are starting to lag a wee bit here. If you noticed, the NASDAQ is
starting to lag here because of this. SEMIS are now starting to become a mixed
bag as names like ALTR and INTC are gross but names like
(
BRCM |
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News |
PowerRating) and
(
TXN |
Quote |
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News |
PowerRating) continue
to be strong.
Lastly, please notice I spent more time talking about sectors than the
market. Even if the market jumps to new highs, you will suffer if you are in the
wrong areas.
Gary Kaltbaum