06/12/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/061218.mp3

JUST LETTING YOU KNOW

We’ve been telling you very simplistically that the market’s in corrective mode. We think last week’s low will hold for now. After yesterday’s action, I said “I think last week’s low is still going to hold, but I’m not so sure after yesterday’s action.

Well, I’m pretty sure today that last low in the market is going to hold for now. When I use the term “for now,” it just means, for right now. It’s not three months from now. It doesn’t mean I’m calling it the low.

The fact of the matter is that the market has still not experienced something called a Follow-Through Day (FTD), where you get a good 1.5% to 2.0% move in a major index on volume heavier than the day before. A FTD occurs 4 days off the low. Today would have been the 7th day. Now…it was a very good day. But let me remain another part of my equation. I think there’s going to be a lot of whipping around right here. And we are getting it.

Two Fridays ago there was a massive drop on volume, breaking support. Last Wednesday, there was a big move up…holding. Thursday, there was a reversal to the downside. Friday…a reversal to the upside. Yesterday…an ugly reversal to down the downside. Today, it was a good accumulation day on the Nasdaq.

That is good news.

My leaders list continues to leads pretty darn well. There is some pretty good strength in some of those names.

Here’s my take:

  1. The Nasdaq needs to get above 2882 and stay above. That’s for starters.
  2. The Nasdaq-100 needs to get above 2570 to 2580.
  3. The NYSE needs get above 7634.
  4. The S&P 500 needs to get above 1335ish. If that occurs, then we’ll be up to the 50-day moving average and we’ll see what happens there.
  5. The Russell 2000 is lagging. That would be an issue of you ask me.

We need to get through resistance. I don’t care why today happened. I care that it did happen and the market is still defending underneath right here. Also, when I look at foreign ETFs like the FXI, the EEM, the EFA, the EWZ…they’re showing the same characteristics of defending the lows the past couple of weeks, but again – any break of these lows and – good night nurse as Archie Bunker used to say.

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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.