kaltbaum midday

The crooks are already out on wall street. Whenever there is a big down day, someone floats something about the fed and more QE. Today, it is unnamed sources in the financial times talking more fed QE is imminent. These people are lucky I do not run the SEC.

 
As far as today, when fed rumors are yapped, the dollar drops…and commodity areas bounce including oils, CAT-types…and that is exactly what you are seeing. But I am paying more attention to the many names that are breaking down here…Of course, it is early…and will have more thoughts after the close. They aint going to make this easy. Take your time and dont feel the need to trade too much.

BACK INTO THE RANGE

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We have been asked several hundred times in recent weeks why we weren’t more bullish. Methinks we are starting to see the reason why. Here have been and are our thoughts.

While markets have drifted up in recent weeks, a few things stuck out like three sore thumbs that told us we needed to kick back before committing to the bullish side. They are things this report has talked about many times over the years.

First and most importantly, one must look underneath the hood instead of just looking at the indices. Underneath the hood, we had been telling you that leading the market were FOOD, DRUGS, BEVERAGES, TOBACCO, HO– USEHOLD PRODUCTS, UTILITIES, TELCOM UTILITIES, REITS and BOND FUNDS. Sorry….these are the most defensive of defensive issues telling you something is up. And usually, what is up is that the market is forecasting a severe slowdown in economic growth if not more. No…we are not in a depression as some are saying…but we are in an anemic economy where any more weakness can tip things over.

Secondly, there has been little or no leadership in growth stock land. It is a must to see leadership in this area as it has always led bull phases. Not only that, we have recently seen major blow-ups in previous leaders like Chipotle, Intuitive Surgical, Whole Foods and Monster Beverages.

Lastly…where was the volume on the way up? Volume has not been strong. Volume has not been compelling. Volume measures conviction of the big money crowd. If they don’t have conviction, strong up moves are usually not sustained.

So we walk into a trading top on Friday and then into today. If we were to take the real bearish case, we would tell you to overlay last summer to this summer. It just about looks the same. For the bulls, they had better hope it doesn’t turn into something like late July-early August of last year. We believe the market is in one of those nauseating trading ranges right now. If resistance gets taken out, we get more upside. Resistance was not taken out so we head back down. If support is taken out, then we will talk about a good leg down. Here are short term levels to watch. DOW 12,450…S&P 1325 and then 1309…NASDAQ 2837 and then 2818…NDX 2522 and then 2510. Longer term…DOW 12035…S&P 1266…NASDAQ 2726…NDX 2443.

Our favorite areas continue to be all those defensive areas…but on pullbacks into support/moving averages. Keep in mind, they do not have the strong earnings growth to keep them going infinitum. We would also add we continue to like the housing sector…yes, the housing sector continues to show tremendous relative strength versus everything else.

Lastly, we are constantly bombarded on whether the Fed will enact another QE. It is our position that the Fed has been printing money for years…will continue printing money and will never stop the insane printing of money until the day the market stops them or until sane people take over at the Fed. The only issue is the timing of an announcement of the QE in order to try and goose the markets. We gather you have an understanding as to how we feel about Bernanke and friends. Nothing personal!

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.

kaltbaum premarket

I hate gaps. Market down about 1.5-2% this morning as Europe down 2.5-3%. Asia wacked also. I thought a trading top was put in Friday but this could be more. I cannot play a big gap down…and will sit. Very important you recognize that many growth names topping with some with major tops. On top of that, recent strength has been in recession-resistant, defensive areas.
 
Keep your capital. I am quite happy this service did not buy into the recent move to the upside as many got bullish on the move. Should be another interesting day.
 
Lastly and amazingly, this market continues to trace out last summer. For the bulls, they had better hope it doesnt.
 

kaltbaum email

A few changes on my leader’s list. First off, I have mentioned to you that names like ISRG and CMG look like late stage stuff. Well…they are now major late stage failures. We do not want to see more. Leaders right now are either sitting or failing…giving us nothing to do. This latest move up was the semis, oils and defensive names…not growth leaders.
 
 
 
 
 
AAPL- Setting up well into earnings…but 5th stage base. My question…how late stage is this…earnings will tell Tuesday.
ALXN- Still sitting strong…earnings this week.
BIIB- Pulling in towards 50 day. Never been thrilled with numbers but strong group.
CERN– Breaks down out of wide and loose pattern. Done for now.
DLTR– Also comes off leaders page as it breaks the 50 and feels later stage…and maybe for the group. Told you recently I was not thrilled with bearish wedge.
EQIX- Just holding 50 day and reports this week.
EXPE- Holds 50 day but not thrilled with up-down-up action. Earnings soon.
MNST– Major chart break with big volume. Off list for now.
PETM- Very strong…hardly budging.
PRGO- Still fine but looks headed towards 50 day.
ROST- Late stage group but acting fine.
SHW- Reversed on volume on earnings. Still above 50 day but has had a good run.
TRIP- Still above 50 day.
TJX- Still fine…but have to watch group. Continues to ascend nicely.
ULTA– Off leaders list for now with Friday’s break.
V- Held 50 day to the penny last Thursday and back in base after failing breakout. MA not trading well.
WFM– Another major chart break…off leaders list.
 
 
 
So you can see 5 names gone…a few others just holding…with names like CMG and ISRG blown up. This is worrisome. Take all the clues you want but for me…it is how are the growth leaders doing. PCLN also looking a little like CMG and ISRG…so will need to watch earnings on that one.
 
 
 
I am adding back EBAY off recent gap to the upside. I would add AMZN back but they report this week…and earnings will be down again. I will probably put MLNX on list soon on its major gap to the upside but want to see if it puts in a handle or a flag here…or just fades.
 
 
 
From Friday, UNP broke back below pivot on downgrade so no play. I really liked the C short but not going to play after down 2% on open. I think the market remains a pain in the ass here and think it probably put in a trading top Friday. Of course, the almighty AAPL may have a say Tuesday as it is probably the only real market mover these days.
 
I think market hit a trading top Friday but know we are entering month-end b.s. But I think this is going to remain tough and want to keep capital until we get direction. I am more apt to play some shorts…but into the next bounce.

Chipotle (CMG)

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I received an email asking me how one could have avoided CMG being down $75 in the premarket. After all, Chipotle has been a leading growth name for quite a while. One needs to know CMG has been a teflon stock. No matter what they said or did, the stock would still ascend. But all great stocks have a shelf life. The companies behind the stock usually go through a certain period of time where their growth is strongest but as they get bigger growth slows. Through the move up, valuations get more expensive and more and more people pile on because they believe nothing bad could ever happen. But most stocks give good clues before they have major tops. To be sure, sometimes they don’t give clues. But in this case, there were enough clues for me to be out of the stock. First off, the stock has been living BELOW its 50 day moving average most of the time over the past 13 weeks. That in itself is not the end of the world but one needs to know, a stock cannot ascend unless it is above this important moving average. On top of this, its relative strength line has plunged. Adding to that and most importantly, look at the action of 6/27 and 6/28. What you see is simply “big money crowd” liquidation on those two days…and frankly, I never argue with that type of action. The recent bounce only made the chart give a look of a “wide and loose” pattern…which typically fail.
 
So I think the stock gave you clues…not necessarily that the stock would be down $75 in the premarket today….but most definitely, in recent action. Combine that with the fact the stock had already had a big run…and you get the potential of a big drop if the company says anything negative. If you own the stock right now, my rule would give it a few percent underneath the open and just get out. If you owned, hopefully, the gap is overdone and gets bought up.
 
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.

kaltbaum premarket

First off, I received a good email asking me how one could have avoided CMG being down $75 in the premarket. One needs to know CMG has been a teflon stock. No matter what they said or did, the stock would still ascend. For me, the only thing that kept me out of the stock recently is that CMG had lost its leadership characteristics with the 50 day declining and the action quite faulty. Also, I would note the action of 6/27 and 6/28. That was serious “big money crowd” liquidation…and frankly, I try to never argue with that type of action. So I think the stock gave you clues…not necessarily that the stock would be down $75 in the premarket today….but in recent action. Combine that with the fact the stock had already had a big run…and you get the potential of a big drop if the company says anything negative. If you own the stock right now, my rule would give it a few percent underneath the open and just get out. If you owned, hopefully, the gap is overdone and gets bought up.
 
Futures down decently…more on the s&p than the nasdaq because of goog and msft being up. ISRG is also down 30…sndk up 4 even though earnings down a measly 80%.
 
So…UNP is downgraded this morning. So let’s not play. I want to see how the stock takes the downgrade. Also, C is down almost 2% premarket…so we have to wait on that. Just notice that C,JPM and a few others have meekly rallied into resistance/moving avgs where you get the best place to short.
 
So…doing nothing premarket. I will advise if decide to do something intraday.

kaltbaum email

Past leaders CMG and ISRG blowing up in aftermarket.
 
I have no conviction on the market here…but I do have plays. Keep in mind, a crapload more earnings coming out in next two weeks.
 
UNP broke out today on volume. You can probe in the 100-121 area with the idea it holds the 120 breakout.
 
I am undecided but when market is up, easiest to isolate weakness…so thinking C and maybe JPM are shorts right about here…with very low risk stop just above 50 day. I will advise on this in the morning.
 
I will have a full report over the weekend but looks like MNST is done…EQIX is close…and WFM on the ledge. All this while nasdaq gets bid off the semis and some big cap moves.
 
 

07/19/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/071918.mp3

JUST LETTING YOU KNOW

I get so many emails. I don’t watch anybody. I don’t ready anybody. But what’s sent to me and what I do see because I’m on the web, is that a bunch of people are talking “depression.”

There are people calling for crashes in the market. There’s out about depression and crashes. And about the end of Europe.

Now it’s very important that you recognize that I tell you on my radio show, that if they don’t stop, the market’s going to stop them because of debt.

But there’s no way of predicting depressions and recessions. I do think they’ll be a day of reckoning.

In 2006 when I was all over the place calling for a housing and credit bubble, I didn’t know when it was going to pop. Not a clue. I think there’s a government debt bubble. Not just in the U.S. but in many places. I don’t know when that’s going to pop. I have a thought process that it will.

Just be careful about dire warnings. We’re not in a depression. By the numbers, we’re not in a recession. I think we have an anemic economy built on some stilts and I wonder what happens if the Fed ever goes to normalcy.

And, of course, I worry about when we’re going to pay down that debt.

But if you read some of that stuff, you’d wouldn’t even be looking at the market. You’d be taking you money and running if you read some of that stuff.

You wouldn’t believe what some of them are saying…4,000…5,000 on the Dow…the end of the dollars a we know it. And I could go on and on.

The bottom line is, tech which was in a bearish market lit up on what I consider to be poor earnings for a lot of names. But sometimes when things are going down, they get washed out. When the bad news finally comes out, they start rallying.

That’s what’s happening here.

On top of that, some of the worst, down and out areas are no longer going down and are actually rallying.

20 some odd percent of the S&P are the energies. Guess what energy stocks are doing now because oil prices are now starting to kick into gear on the upside. Now eventually that’s not good. In fact, I think oil went from 90 to 92.60 today on a barrel. And that helps the market.

The Semiconductors…dead in the water…basically they had crashed. And now in the past 2 days, they’re up 7%, which helps the Nasdaq.

Is this just a reaction that’s going to last a few days and then turn back down.

Could be. Because I’ve got news for you. The earnings stink.

But you never know. And you never know what the market is potentially forecasting. The only thing I do know is that in the past couple days and today, the market got a bid.

So we want to look for leadership. Wait for earnings to come out. See the reaction. And go from there.

I do not think it’s going to be easy. I think the market’s a pain the rear end. 

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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.

QUITE TIRED OF HEARING WHAT A SUCCESS STORY THIS IS

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ANY BANKRUPTCY COURT WOULD HAVE GOT THE JOB DONE WITH NO COST TO THE TAXPAYER!

As reported Tuesday by the Huffington Post, President Barack Obama again touted his administration’s 2009 bailout of the auto industry to voters in Ohio Monday.

For three years, Obama has been trying to convince voters that the government’s $50 billion bailout of the auto industry was a success. What he isn’t telling voters is the truth.

Continued

SOURCE: http://www.examiner.com

kaltbaum notes

3 more yuck economic reports. Market initially sells down…but is now stiffening up. The SEMIS, OILS and now even some of the metals/mining areas are providing a floor on the market. When the worst areas no longer go down…market does not go down. When the worst areas come off the lows, the market comes off the lows. In particular, the down and out semis continue to get a bid despite what I consider to be bad numbers. It is a matter of they were already way down. The question is whether they can get going on these numbers. Time will tell.
 
A few more notes:
 
MNST,SHW,WFM are breaking the 50 day today…these stocks have been on the growth leaders list. But AMZN,EBAY and CRUS, which used to be on the list, are breaking back above…so some good, some not so good.
 
I am watching COF,EBAY,UNP for entry. All have broken out with EBAY gapping up.
 
Also wanted to menton that the financials again have a set up to go higher. If the xlf and iyf break out of this little range, that will also be a help to the market.
 
ULTA holding 50 day but not moving.
 
AAPL continues to set up well into earnings.
 
EXPE holds 50 day as EBAY helps the group…and TRIP really acting well. PCLN back above the 50 but only basing right now.
 
IBM is up about 65 dow points today.