What I Don’t Want To See

March 14, 2003
Gary Kaltbaum

I have been bearish on the technical condition of the market for so long
that I don’t think I know how to spell the word billish, ballish,
bellish…bullish. Finally, got it right. Well, the market had a high-volume
reversal day on Wednesday. We know by now that those kind of days lead to upside
testing…but this is ridiculous.

A big WOW for Thursday’s action. Let’s put
it into a defined context. Thursday’s jump is the first day of an attempted
rally. Some may say Wednesday is the first day. The move was strong. All the
right things happened…GOLD down…OIL
down…BONDS down…SEMIS
leading…DOLLAR up…VOLUME
strong…finished at the highs. At the risk of throwing cold water on it, it is
only one day. But that is the worst thing I will say right now. It is just good
to see that the market will at least have a chance to make a move to the upside.

My job is to react as swiftly as possible. As you know, I have kept you out of
the minefields since just about the start of my writing. Here is specifically
what I want to see from here to embolden me…a follow-through day. I want to
see the market have a better than 1.5% – 2.0% gain on heavier volume sometime
next week. If you want a better understanding of this type of day, get O’Neill’s
book “How to Make Money in Stocks.” This would confirm the rally and let me
start to buy stocks. Buy stocks! Wow! I hope I remember how to.

What don’t I want to see? Believe it or not, I don’t want to see another one of
the five-day rips to the upside covering 1000 DOW…like what happened in July
and October of last year. “V” patterns simply do not hold.

In the meantime, I am seeing other positives.

It seems, as of this
writing, that the July and October lows are holding for the third time. Lows
become stronger when they are retested over a long period of time.

The NASDAQ is still
leading. It is a positive divergence that the NASDAQ never even came close to
the lows of last year. In fact, it only undercut its February lows on
Wednesday.

The NASDAQ 100 is now
above its 50- and 200-day averages. This is a start. As I have always told
you, just keep watching the SEMIS…as they continue to lead both up and down.

I was asked several
thousand times if Thursday could be the low. My answer is to not worry about it.
Let the people who have called the bottom hundreds of times tell you that. The
disciplined trader/investor knows that predictingÂ does not work. If this is the
start of something longer-lasting, it will not hide. Many quality bases will
form and start to break out. Leadership measured by the NEW HIGH LIST start to
show. Doubt fills the air as the markets continue upward. Let’s just take one
day at a time. I do have a sneaking suspicion that the market will remain tough.

Lastly, notice I did not mention war or any other news items. The market will go
up if it wants to…regardless, in spite of or because. It gets spun any way it
goes.

What I Don’t Want To See

BUY THE FEAR, SELL THE GREED

Quick Links

Company Info

Contact

Company Resources