JUST LETTING YOU KNOW
November 16 was a Friday. That day the market was in a fall into that day. That day was getting real ugly. And on that day we had something called massive put buying. The whole world was buying puts on the market, betting on further downside AFTER a big drop.
And that day the market turned around and finished up on volume, which just about always will lead to upside testing.
Well, fast forward to today.
We walked in. The market was up strong. Couldn’t hold it. Turned around to the downside. Hmm. And interestingly enough, ladies and gentlemen, where did that occur?
Well, the S&P 500…right at the 50-day moving average. Why do I bring this up? Go look at what contained the S&P on November 2. Go look at what contained the S&P on November 6. And maybe, just maybe…as of this second, look at what contained the S&P today.
Yes, it was that all important declining 50-day moving average.
To continue with that, the Nasdaq on October 17 rallied just above the 50-day before tanking. Today, the Nasdaq rallied just above the 50-day before selling off.
The same goes for the Nasdaq-100 to the penny today. In another words, the Nasdaq-100 hit the 50-day on 10/17 and 10/16 and today to the penny. I’m not making this up. Go check it out. The 50-day moving average is at 2700 on the Nasdaq-100…tagged it and closed at 2671.
Well, you’re getting my point. Just letting you know, in here at lower highs, we got churning and distribution at these levels.
What does it mean. I don’t know. But if we’re in a bearish phase, this is how they play themselves out. So we’ll be watching this closely.
Just letting you know, at the very least, I think this rally hit a short-term high today and probably now has to do some mucking around or pulling back or sitting around before we can potentially move higher from here. That would be the guestimate.
That’s regardless of if news comes out from the “them politicians.” It’s regardless of any other news.
Keep in mind, we’re now in December. They did the mark-up period and we entered in December and all of a sudden they couldn’t keep it up today. How interesting.
I’m watching closely as we head in to January.
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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.