This Will Definitely Change The Playing Field For Many Stocks

  • January 18, 2005
  • Gary Kaltbaum
I believe there is a
chance the market has put in a near-term low. After a pretty gross
start to the year, it is due. 

 

But…no matter what I say, if the DOW breaks
10,485 on a closing basis combined with the S&P breaking 1175 and the NASDAQ
breaking 2066… then what has been a somewhat nasty short-term correction,
will get get a bit nastier.

 

No matter what I say, starting today, earnings
are coming out in droves. That will definitely change the playing field for
many stocks.

 

I believe a near-term low could be put in
because of several reasons:

 

I like that Wednesday’s mini upside reversal
held support.

 

I like that NEW HIGHS expanded nicely late in
the week.

 

I like that  the market, finally, rallied into
the close on Friday. As you know, the market has been failing into the close
all year.

 

That’s the good news…now for the bad news.

 

I do believe the momentum top has been put in.
That simply means that the major indices can go higher but less and less
stocks now go along for the ride. This type of negative divergence will
eventually come back to haunt the market.

 

A ton of stocks have broken their moving
averages as well as support. Less and less stocks in good technical shape is
not a great way to start the year.

 

So, regardless of which way the things turn out,
keep in mind it is going to get tougher. We are now past the point where you
will be bailed out of mistakes and past the time where “everything” works.  

 

And now we get to deal with earnings. As always,
I will be paying more attention to the reaction than the news. 

Gary Kaltbaum

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