Why I think oil has topped
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 one of my recent reports,
I stated that I was seeing many tops in the OIL complex and that the OIH
looked like a “big giant top.” A break below 134 would be a negative and a break
below 130 would be bye-bye.
I am now seeing that top starting to occur as the OIH is now
falling off. Keep in mind, this is representative of many OIL SERVICE names. On
top of that, the XLE, which represents BIG CAP OIL is now rolling over as it has
broke short term support as well as moving averages. Names like COP,MRO and
others are topping out. I would completely avoid this area for now as OIL PRICES
look to be headed into the mid 60s.
On top of that, I told you that other COMMODITY areas were
also acting like they would follow suit to the downside. That is occurring also
as ALUMINUM,STEEL, COPPER and anything you can drop on your foot are going down.
Most charts are rolling over. I would be avoiding these areas also as changes
are in the wind.
This could be good news as it could give cover to the FED.
Lower COMMODITY prices is a good thing and could start to take all the
inflationary talk off the table. At least, that’s what the BOND MARKET has been
saying.
TECHNOLOGY continues to get most of the bid right now as the
resistance levels we outlined for you on the NASDAQ have been taken out. The SOX
is leading the way. And when the SOX gets going, investors hold on for the very
last drop. It is not often that “markets” get in trouble when the SEMIS are in
gear. Keep in mind, the SEMIS are still way down from the highs and have plenty
of damage to repair. This is occurring while all the news is bad in SEMILAND. At
the highs, all the news was good. A lesson to be learned.
You can see how important it is to be sector-specific right
now. Even though the D0W and S&P are a smidge from the highs…even though the
NASDAQ and SOX have the bid right now, there are still plenty of uglies in
RETAIL,TRANSPORTS,HOUSING and other areas. In fact, BROKERS are now rolling over
badly which is less-than-thrilling. I am playing this game sector by sector
right now…now more than ever.
Gary Kaltbaum