What the action in gold tells you about this market
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 “Investors Edge” on over 50 radio stations. Gary is also
editor and publisher of “Gary Kaltbaum’s Trendwatch”…a weekly and monthly
technical analysis research report for the institutional investor. If you
would like a free trial to Gary’s Daily Market Alerts
In Monday’s report, I penned the following two
paragraphs:
“OILS are finally obliging my thoughts. They have become over loved, over
owned and extended. They have also had quite a run in the month of January. This
pullback is about as normal as can be considering the extended condition. Let
them come to you. They are still in bull mode for the most part.“
“This also now goes for all the COMMODITY groups. They have all become very
extended and need to revert to the norm. How does this occur? By pulling back
into support or moving averages. This includes GOLD, SILVER, COPPER, ALUMINUM
and anything else that comes under this umbrella. These areas are also in bull
mode…just may need some rest.”
We now know what happens to stocks that have gone vertical. They come back down
to earth. Every commodity group was slammed for big losses on Tuesday. GOLD,
SILVER, OIL, GAS, COPPER, ALUMINUM, STEEL…you name it…it got hit. My guess
is that a decent top has been put in and at the very least and most optimistic,
they will need to take time to heal the damage. In fact, I found over 25 OIL
stocks that broke below the 50-day MA…and on volume. Since these groups have
been important to the health of the overall market, you may want to sit up and
take notice. After doing my scans, here are other thoughts.
I am seeing many momentum names put in tops. I am not sure this is a good thing.
This includes
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and quite a few others. This is certainly NOT bullish. GOOGLE dumped another 17
points.
RETAILERS are breaking down. In fact, the
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RTH |
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I still have a decent list of strong stocks…but not many coming out of quality
bases. The one area that is still in good shape…and that is important…is the
SEMIS. Let me be clear, if the market loses the SEMIS, party over. So
far…nothing to worry about. Just a head’s up.
Gary