On Friday, some key support levels were taken out and as I have always told you, support levels can always be taken out and then taken back and everything starts to repair itself. But not much I saw today excites me.

And yes we a lot of jello movement on the plate. A lot of back and forth today because when markets are stretched and extended from the norm, you’ll tend to get more whippy action. And, of course, you’ve got a lot of shorts in the market right now and you had a lot of short covering throughout the day.

But there’s one thing that matters to me most and that is the big picture.

What matters to me most underneath that big picture is my sector analysis.

What to me most after that is, “How are people reacting to what we’re seeing? How are the masses feeling about the markets?”

But there is no better way of measuring the market than Price and Volume. Recently, price and volume has been nothing but “yuck.”

It’s a very sick market out there right now. Just remember one thing. When the market is sick all we tend to do is just sit back, looking at leadership and looking for a Follow-Through Day (FTD) in the market. That is, you find the low and 4 to 7 days after, you get a big, gigantic day, typically 1.75% on heavier volume than the day before which has the potential to turn that market. Doesn’t mean it will, but gives the market that potential.

So frankly, today is Day 1 on the Nasdaq and Nasdaq-100. I’m not sure that means much. Just remember, bottoms in markets can come out of nowhere sometimes. But most of the time, it’s a process.

I got a lot of emails over the weekend asking me what I really think about this market and where it’s going from here. I don’t know. I really don’t know. And I don’t pretend to know. I think there’s some more time and price. And we’ll keep reevaluating.

The most important thing is whether you got out of the way while the market is giving its clues. And the market gave out some very loud clues in the weeks past. We told you every single one of them. I hope you listened.

Important Things

  • The Dow remains trading below its 200-day moving average.
  • The Mid-cap 400 is also below its 200-dayh moving average.
  • The Russell 2000, the same.
  • The Small Cap 600…same
  • The Semiconductor Index is way below it’s 200-day moving average.
  • The NYSE is also way below.
  • The Nasdaq is sitting on it right now.
  • The Nasdaq-100 remains above its 200-day moving average. Keep in mind that a lot of that has to do with Apple.
  • The Transports…below the 200-day moving average.

Nothing good happens if markets are trading below the 200-day moving average. It’s a physical impossibility for the markets to go higher when trading below the 200-day moving average.


  • Japan is at 28-year lows for the market. We’re talking 1984. You got it. Back then, Japan was the end all be all. The Nikkei was in the 30,000s. Now it is sitting at 8295. Their debt is the biggest to GDP in the world, for a developed nation. And unfortunately, their demographics – they’re getting very old over there. But the debt is the big problem over there. Let’s keep our fingers crossed that we don’t follow suit.
  • The Financials continue to act pitifully. I have to tell you that I am so surprised that J.P. Morgan stock cannot find a friend. It went into more new relative low ground today, down .93 to 31. I guess credibility and trust do matter when it comes to the market. Nothing good is going to happen with the market as long as the Financials continue to be crushed.
  • The Transports were once down 100 today, finished down 64. But I gotta tell you, with the crashing price of oil, I would have throught that the Transports would do better. But they’re just breaking down. The Airlines were crushed today.

Nothing is turning up except for Gold. But I’m not so sure that’s going to last. Gold is most definitely the “fear trade” and the bet that the maniacal Bernanke will come out and just conjure up some more money out of thin air.


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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. 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.