We’re seeing classic bear market action

Gary Kaltbaum is an investment advisor with
over 18 years experience, and a Fox News Channel Business Contributor. Gary
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Well…don’t say we didn’t tell you so. In the recent past, we
have been very worried about the FOMC…in other words…The Federal Open MOUTH
Committee. That sounds sarcastic…but we are not. We are dead serious. Here is
the latest mistake out of this Fed that can’t keep their mouth shut. On Monday,
Bernanke states that inflation is at OR ABOVE expectations and that the core
inflation rise is an UNWELCOME development. The problem is simple. This
week…there is inflation…but last week, the market interpreted the opposite
as he said inflation was under control. All of the other FEDHEADS have also said
inflation was well contained. What changed in a week? This FED is going to
quickly lose any shred of credibility if this continues. You cannot be the head
honcho, top dog, big cheese if you are going to continue with an open mouth
policy. It is bad enough that the FED remains behind the curve by reporting the
news AFTER it has already occurred. As we have stated numerous times, one day,
the markets are not going to like what is said…and then good night! Monday’s
action is a great case in point. You can open your mouth all you want in bull
markets but this bear market started on May 11. Reactions change during bear

There is nothing good to say about Monday’s action if you are a bull. What we
are seeing is classic bear market action. The NASDAQ
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, NASDAQ 100
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and the SOX
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are already deep into the abyss. All it would take to
really confirm things is a break below 1245 on the S&P
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followed by a
break of the DOW 10,860…which is its 200-day
moving average.
But you should not be waiting for confirmation as so many stocks and sectors are
already going by the wayside.

The patterns of every major index are now very ominous looking. A break of
recent lows will only serve to make what has already been a bludgeoning into
something much worse. We were thinking those lows would hold in the near-term
but Monday’s action may dictate something else.