Watch These Three Support Levels

June 30, 2003
Gary Kaltbaum

I don’t think much has changed. I continue
to believe we are in correction mode.Â Since

my last report, I have been asked questions ranging from whether this is the
start of something ugly to how long does the correction last. My answer is a
flat…I DON’T KNOW. I just try to use the
day-to-day action to give me clues. Trying to get too far in front of things
onlyÂ will get you in trouble…but here are some thoughts.

The market had to put in some sort of top eventually. Trees do not grow to the
sky. So far, the correction has been calm, controlled and rotational…so no
complaints whatsoever. I do believe there could be more to come. It just seems
the market has lost some steam here. Breakouts are drying up and leading stocks
are pulling in their horns a bit.

Other notes:

BROKERAGE stocks have come under pressure. This
will need to be watched closely as they are a strong proxy for the market. So
far, they have pulled back to support.

BIOTECHS are still tracing out a top…but so far,
just a normal correction. They will also have to be watched as they were one of
the groups leading the market up. HOMEBUILDERS likewise.

SENTIMENT still stinks…but as you know, has not been a factor as of
yet. Bearish advisors are down to 17% and get this…AAII does the same type of
survey…these are individuals…and they are down to 8% bearish and over 70%
bullish. Just food for thought.

Regardless of this correction, there are a few stocks breaking out on a daily
basis. These stocks right now are mostly in small and mid-cap land.