Why I’m Watching the Financials
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
click here
or call 888.484.8220 ext. 1.
The market experienced its second distribution
day since the follow through on March 21. Any more distribution could put an end
to this fledgling rally. We say this because studies have shown that
distribution soon after a rally starts…usually ends the rally…and quickly.
The fact is this rally has come with warts since day one…specifically the weak
FINANCIALS. As you know, we believe FINANCIALS are an important proxy for the
market.
We also make note of what we said at the end of our last report…and that is
there was still plenty of stocks in poor technical shape. We stand by that…and
want to make sure you know that the tape is very split. You cannot throw darts
here. We have been trying to give the market the benefit and then Wednesday.
Now…let’s take a look at the charts of the major indices…not liking the
patterns at all…and thinking any more distribution kills this rally.
Tops take time. They do not happen in a day. We are now thinking that first day
down on Feb 27th could turn out to be the shot across the bow. We would keep
things on a short leash. Nothing wrong with being cautious. At the very least,
there are very few bases to buy off of…and now we get to enter earning’s
season with the market showing some distribution.
Now to our best friend…the Fed. The Fed released their minutes yesterday. In
those minutes, we found out that they finally admitted that they think the
economy has issues to deal with and at the same time, inflation is worrisome. We
found out that they are thinking more on the side of raising rates than lowering
rates. This is the first time they have told us there are issues…in plain
English. We need to let you know that in the past, slower growth and higher
inflation was not a great recipe for equities. We all know markets are due for a
good correction…if not more. Time will tell.
Gary Kaltbaum