Why Traders Need to be on Their Guard
Gary Kaltbaum is an investment adviser 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.
Major averages continue to receive a fair amount of distribution days…though some were holiday and option-related.
The TRANSPORTS have put in a near-term double top and have edged below the 50 day. RAILS and AIRLINES have come under a decent amount of distribution.
The RUSSELL 2000 has also put in a near-term double top and edged below the 50 day.
UTILITIES have edged back below the 50 day.
RESTAURANTS have broke down on a near term basis as quite a few names have been smoked.
Seeing a few BIG BANKS breaking not only short term support but maybe intermediate term support.
BIG BIOTECH has been crushed.
A few SEMICONDUCTOR names have broken support though the SOX is just sitting on the 50 day.
STEEL PRODUCERS have failed on a bounce INTO resistance and remain very weak relative to other COMMODITY areas.
HOUSING and HOUSING-related names are mostly under resistance and in not so thrilling chart patterns.
INSURANCE is now feeling toppy and starting to edge below short-term moving averages.
Several GOLD names have sliced through short-term moving averages.
The DOLLAR, which is almost as hated as Stalin, looks like it may want to fool the masses here and rally. As you know, there has been a direct INVERSE relationship between the markets, commodities and the dollar.
As you can see, we are seeing some deterioration in a few areas. This in itself does not end the rally but tells you the rally is now getting narrower. Simply put, fewer and fewer stocks are leading the market up.
We are into month end so thinking we may bounce but be on your guard. This market has moved up for 7 months without an intermediate-term correction. Corrections have been short-lived and shallow. Eventually, we will get one. I am just not sure if it is the midst of occurring right now or there is more upside first. So far, what we are seeing is a normal occurrence after such a run-up. I have seen many times where markets deteriorate, sit around and then repair and go higher. Markets were deteriorating into mid-July and on July 13th, markets turned right back up starting a second leg up. This is not out of the question. Just thought it was time to give you a head’s up.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.