Your Job Remains Simple…
In my last report,
I told you that a bounce was in order. I just felt that the May lows for the
DOW/S&P 500 was going to be a place where the market put up a fight. So
far…success. On top of that, the down and out SOX also decided to get legs.
The SOX remains vital to the health of the market as it has led the market up
and down for years.
I told you that a bounce was in order. I just felt that the May lows for the
DOW/S&P 500 was going to be a place where the market put up a fight. So
far…success. On top of that, the down and out SOX also decided to get legs.
The SOX remains vital to the health of the market as it has led the market up
and down for years.
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As of this writing, futures are down on the raising of the terror alert.
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Thoughts:
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No matter what I say today, if the DOW/S&P 500 break the May lows on a closing
basis and stay there for a decent length of time, I would suggest that the
longer-term prospects would dim and I would be more than likely calling it a
broad-based bear market.
basis and stay there for a decent length of time, I would suggest that the
longer-term prospects would dim and I would be more than likely calling it a
broad-based bear market.
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Major indices are still trading below all major moving averages. I cannot get
emboldended until the markets can penetrate them.
emboldended until the markets can penetrate them.
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There remains a complete lack of leadership in the market. I do not believe
STEEL and OIL-related issues can lead for very long.
STEEL and OIL-related issues can lead for very long.
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I still have many more stocks and groups in poor technical shape than in good
enough strength to move up.
enough strength to move up.
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While I finally have started to see some powerful moves off of earnings, the
amount of names blowing up continues at a high rate.
amount of names blowing up continues at a high rate.
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It remains a time to not do much. I believe we may enter another period of
whipsaw…which will drive most crazy. For you, the job remains simple: go
slow and recognize that this is going to remain a very tough and challenging
environment.
whipsaw…which will drive most crazy. For you, the job remains simple: go
slow and recognize that this is going to remain a very tough and challenging
environment.
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I believe we can still see some upside testing here…but I don’t think much.
There is months of resistance the market needs to get through…and that will
take a while…if it ever does. Volume has been tepid telling me this bounce
has not been backed by the big money crowd. That must change to get
follow-through to the upside.
There is months of resistance the market needs to get through…and that will
take a while…if it ever does. Volume has been tepid telling me this bounce
has not been backed by the big money crowd. That must change to get
follow-through to the upside.
Gary Kaltbaum