09/06/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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https://archives.warpradio.com/btr/InvestorsEdge/090618.mp3

JUST LETTING YOU KNOW

When I woke up this morning, the Wall Street Journal headline was:

Europe Outlook Dims As Bank Meets. Downturn Deepened Over Summer Complicating Choice For European Central Bank Officials.

We have under 2% growth here in the U.S. The unemployment rate is in the 8% range. There will be an unemployment number tomorrow and one more before the election.

Let me tell you my thought process: They’re going to lie. I’ll leave it at that.

So we have all this negative economic news. In fact, in Europe, they’re in negative GDP.

We had a manufacturing number this week that was recessionary. And I could go on.

In the past two weeks, I have told that there’s been a certain pattern of fear and greed in the market that has been setting up. It doesn’t set up often for major indices. That pattern is a “Cup and Handle.”

It means that the market hit a high a few months ago, came down and corrected and then came back at the highs – making a cup. Then pulled back and for three weeks sat tight – making a little handle.

That is typically a bullish pattern, but we will need to see the market and what makes up the market – break through the highs. And if it does, that would be bullish.

Now keep in mind that, just because something breaks out of a trading range doesn’t mean the market doesn’t tuck its head back in the next day and turn tail. There are things called failed breakouts. They do happen. They don’t usually happen in markets though. We’ll see.

The Nasdaq broke above the handle today with volume. The handle was 3100 and the old high from late-March 3134 and the market nudged just above it. The Nasdaq-100 had good symmetry at 2800, broke through there today, and closed at 2829. Classic looking.

The S&P 500 which had very good symmetry in the 1422 to 1425 area, broke through today and closed at 1432.

When you look that that past two weeks, the patterns were very tight.

The Dow – almost. It needs to get above 13,338 and it closed at 13,290. Keep in mind that the Dow is only 30 stocks.

The Russell 2000 needs to break above 827 and closed at 839 and the old high is 847 – we’re getting close.

On top of that:

The financials, represented by the XLF, broke above resistance today and so did IYF. So did the KBE and the KRE, which are back indices.

Do I need to go further? Do you catch the drift?

It was very good day in the market today.

That’s all.

Let’s just hope to sticks because if does, there’s going to be a ton of opportunities to take advantage, while nobody believes it and all the news is bad.

I’ve told you why this is happening and why it would happen. The Fed is going to print a crap-load of more money and today it was announced by the European Central Bank that they’re going to do the same. In fact, they used the word “UNLIMITED.”

So now you have central banks around the globe printing the crap out of money that is not even there today in order to juice things. We know Bernanke targeted the market in his Jackson Hole speech. He talked about how since March of 2009, look at what the market has done since QE1. He’s given himself a victory lap. And you know what?

It’s working. But you may ask, what if next week the Fed decides not to print more money?”

Well, I would suspect, the market will go back down. But I think it’s in his genes. This is what he does. He creates bubbles.

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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.