2 days of trading left in this nauseating year of 2011…nauseating because the market has been nauseating since February. That’s when a lot of things topped out.

I’ve been saying that this market’s going to be a pain in the rear end and very tough to play. I’ve been saying that for eons.

A lot of the market is in a bear market.

Foreign markets are definitely a lot worse off than we are.

No leadership — until the past couple of weeks. What was the leadership? Food, drugs, beverages, tobacco, household products, utilities, municipal bond funds, a few REITs, discount stores…in other words – DEFENSIVE ISSUES. And, of course, I also told you that it’s not good when defensive issues lead the market. And when you combine that with the fact that the economically sensitive areas are the ones that are in the bear market, it gives me pause.

But what else have I been telling you? I’m not worried about December so much. And frankly until last Monday, I wasn’t sure we were going to get that usual end of the year markup. But we got it.

My thought process was, we’re ok until January. BUT AS I ALSO HAVE TOLD YOU, I’M WORRIED ABOUT JANUARY. Because typically in markets that are not in good shape, once they paint it up into the end of December, they come selling in January, not necessarily in the first day like they did in ’08. Some times it’s two weeks later.

After today’s action, I am not so sure that the painting of the tape is not over and that they ended it today. I can’t say that for sure because we have walked into markets that looked so bad, and the next day they gapped it up 250 points. But every time they did that, they gapped it up on “another save in Europe,” another TARP…another this, that or the other thing.

Anyway, I’m just letting you know from my weary eyes…and wary eyes – I don’t like the action, knowing they could gap me up 250 points tomorrow.

For example, even with the recent rally that we’ve had up, commodities of all stripes are bearish as all heck…STEEL, MINING, COPPER, ALUMINUM, FERTILIZES, OIL, CONSTRUCTION, COAL, not to mention GOLD and SILVER which got obliterated today. FINANCIALS, while the budged upward, only budged. Foreign markets as I told you remain bearish and the Shanghai Index out of China is at new yearly lows. SEMICONDUCTORS are weak on a relative basis.

So I think you just need to be careful.

Frankly, not much has changed except, I was worried about January and another leg down. We’ll see if today started it. 

SPECIAL NOTE: Be sure to register now for my next live Webinar on Saturday January 21, 2012. I will talk about the important implications of early-January’s market action…and much more.  Click here for more information


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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.