kaltbaum premarket

Futures up a wee bit off the fake job’s report.
For me, the best thing the market can do after the gap this week off the fiscal stiff…is to sit. The worst thing for me is it just goes higher. The good news is bases have been formed and a lot has broken out. The bad news is that it is a lot of stuff…growth aint happening…and may just be waiting for earnings. Last year, as earnings were reported in January, growth kicked into gear.
I expect higher markets. You just do not break out like the nyse and russell have done, like foreign markets have done…and expect the market to just turn down. Yes…I do know most of this is govt interference and money printing but we try not to rationalize things.
Lastly, gold and silver being wacked again. Remember my thesis on gold eventually going much higher like it did in its final move of the 70s bull market….there first needs to be a bear market…and I am not talking just 10-15%…so let’s hope gold washes everyone out before the hopeful final climactic move.




Today was boring compared with yesterday. But it was okay compared with yesterday. There’s nothing wrong with a pullback day. I’d like to see a few more days like this, but I gather we’ll get something tomorrow in way of movement from the fake jobs numbers. And yes ladies and gentlemen, it’s fake. Don’t argue with me. It’s fake.

Go get a chart of how many people they have taken out of the workforce over the past four years.



And then email or call the government and ask them for the list of those people that have left the workforce because every person that leaves the workforce makes the unemployment rate look better.

So we don’t buy into the B.S. that’s going on there. The bottom line is…if you don’t have a job – not good.

Now things have gotten somewhat better. I don’t know how much better. But we’re going to need to do more.

As you know my biggest worry is that anything that’s going on – good or bad – is on the back of massive deficits that they have to pay back one day. But that will be for another day.

GOLD: When Every Bad Day is a Good Day

I do this once everybody couple months just to go over the thesis that we have here based on the late-70s.

  1. It is not a prediction. We are predicting nothing.
  2. We are not telling you to do anything.
  3. We are outlining precedent.

Most often gargantuan secular bull markets, in anything, end in something called a climatic run. In other words, you’re in a bull market for 10…12…15 years and you go through many bear markets during that time, which are normal.

At the end of the cycle you get something on a chart that looks like an Eifel Tower.

You’re going up…you’re going up…and then all of a sudden it goes parabolic. And you double the money within a week’s time. After a decent run, that’s the climatic move.

And 100% of the time, those climatic moves will look like the Eifel Tower.

Straight up…straight down.

Gold Chart

So about 15 months ago on my radio show, I outlined for you what Gold did in the late 1970s, after a gargantuan bull market. It went through a bear market, bottomed and then took off. The final move in Gold was four-fold over months and it doubled in a matter of a couple of weeks. And that was a top and you went straight up and then straight down. Broke the back off of a climatic run, and that was the end.

I believe it was January 1980.

Well it’s my contention that Gold will probably do the same thing. We don’t know, but we’re watching out for it.

A part of theme was that we have to go through a bear market or a long phase of whittling people out of the market. And as you know, Gold has done nothing for many, many months. In fact  Gold topped out in August of 2011…so about 17 months.

Now the good news for Gold people is that it’s not down that much. 185 to 161…not much.

Now that bear market that preceded the big run in Gold back in the 1970s was about a 40% to 50% drop. I don’t know if I’m seeing that this time and that’s because we are in an unprecedented money printing time.

But the question that I get is, “Why isn’t Gold running now, with all the money printing?”

It’s simple. Gold is still digesting the move it had that has been going on for many a moon. That’s why.

Just go back to 2004. The GLD was 44 bucks. It’s now 160. This is quite normal. So I just want to remind you that nothing is going with Gold.

I’m watching.

And the goal is simple here. If we have a repeat performance of the 1970s, the goal is to be on it – and on it in a big way. You usually do not see such uniform precedent. But we’re seeing it right now. And everything that Gold is doing is kinda sorta happened in the late 1970s before the move.

So stay in gear.

Stay in tune.

There’s nothing to do. In fact, it’s acting like caca.

But I think that sometime this year, Gold’s going to take off. And my plan is to have a good portion of the bucks sitting in it, as the printing of money causes some issues.

As long as the Gold trades below the 50-day moving average (and now sitting on the 200-day moving average) don’t even have to think about it.

But I thought it of note today because it had a bad day. And if we’re going to have that run again, every bad day is a good day.


6-7 pm EST

Best of Investor’s Edge
Saturdays 1-2 am EST

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.



Updated 2:14 p.m. — Ohio Rep. John Boehner, R, won a second term as speaker of the House on Thursday over the dissent of a handful of House conservatives.

Following a bruising first two years as speaker and leader of House Republicans, 10 conservative lawmakers cast votes for someone other than Boehner during a roll call vote in the first hours of the new Congress. Several other conservative Republicans abstained from voting. Boehner received 220 votes of a total of 426 cast.

While Boehner won re-election to the speakership with the overwhelming support of the GOP, he also narrowly avoided the 16 total defections from fellow Republicans that would have triggered a second ballot of House lawmakers on electing a speaker. That would have been the first time a second ballot was needed since 1923, and a mild embarrassment for Boehner.


SOURCE: http://firstread.nbcnews.com


Treasury Secretary Timothy Geithner reportedly plans to step down at the end of January even if lawmakers don’t reach an agreement on the debt ceiling debate.

Geithner, the only original member of President Obama’s economic team still in place, has signaled to White House officials that he will leave at the end of the month, Bloomberg reports, citing “two people familiar with the matter.”

It’s rumored that Geithner has been trying to leave his post for some time. Bloomberg reported in June 2011 that he was looking to step down after the debt ceiling debate. Obama reportedly went to great lengths to convince Geithner — who was a key negotiator in both the debt ceiling debate and the recent “fiscal cliff” talks — to stay on for the rest of his first term.


SOURCE: http://www.huffingtonpost.com

kaltbaum premarket

Small change this morning…RAX is a little too far out…and needs some pulling in. The best play is pullbacks after yesterday’s gap but not sure you get much. Last year, market gapped up 1st day and went up for the whole first quarter before topping out.

Bottom line, you have to go with the evidence at hand…if it doesn’t work, it doesn’t work…but the nyse,russell,china,japan, a bunch of europe, financials,transports all break out…and not seeing a lot of bullish reports. Mostly, if you read the paper, they say….great day in the market but caution as there are more budget issues…or crap like that.
Holy crapomatic Batman…for starters, for your review, all these names had breakouts of some sorts today:
On top of that, the midcaps, nyse, russell broke out with everything else furiously coming up the right side. Foreign areas like eem,efa,fxi,ifn also breaking out or broke out.
It doesn’t take a rocket scientist to realize a market operator has been hamstrung in a holiday week…where things were getting in trouble and where a decision in washington would move the market one way or the other…which it did on a big gap today. It also doesn’t take a genius to realize things have quickly become overcooked. The best thing market can do is sit/pullback here…but market couldn’t give a crap.
Any pullback of 1-2%, one needs to own EBAY,EXPE,MA,RAX. One also should look to own market proxy in here somewhere. I do not have an exact number but feeling this breakout looks real and any pullback should be nominal.
I know it is a pain in the rear on how big a list I gave you but it tells you about the market. I cannot promise you this isnt a fakeout…all we can do is act on evidence at hand. The foreign markets are leading and our market was just waiting for the fiscal crap to get done.
One area that refuses to rally is the retail…so be careful there…many of those names look actually shortable but no shorts in this market right now.




While I was gone on vacation, the emails I got were 9 to 1 asking about the Fiscal Stiff. Many were asking about waiting to invest until the Fiscal Stiff was fixed up. And I just emailed back to everyone the same words: “Can’t blame you for sitting tight.”

Because if you think about it – if the Fiscal Stiff did not get signed, the market was probably going to react negatively. And in fact, in the days leading up to where it got done, the markets were getting hit pretty decently. Understandable.

And it’s also understandable that we all realize that we are dealing with forces in the markets that we’ve never dealt with before and on magnitude that we have never dealt with before…being the trillions of dollars of printed money. And all this stuff coming out of Washington…the constant interference…the making of crises in order to further agendas. It’s not an easy go.

So let me just cover this for a moment:

  1. The Republican Party has been neutered. As I have stated on my radio show, they are not Republicans. They are RepubliCONs. Even Paul Ryan, the supposed savior, voted for a deal that raises taxes and does not any do any spending cuts.
  2. There is a bottom line to all of this. Taxes are going up on everyone. Don’t believe it’s just on the wealthy. It’s everyone. In fact, in case you didn’t know, the payroll tax that was reduced to 4.2% in 2011-12 just expired. That’s $1000 extra tax to everybody.
  3. Part of the deal was supposed to be spending cuts and as I have told you on my radio show, there will be none. Now, the Republicons could have been smart and said, “Listen, you said $3.00 of cuts for every $1.00 in whatever. Where are they? We’re not signing until you do it. But the Republicons were scared of their own shadow. They signed on to anything. And the most amazing thing to watch where I was, is that the President made fun of the Republicans – even before it was signed. He spit in their face? Why? They should be. They wussed out.
  4. The outcome will be this: We will be in the 20s in deficits over the next four years, if not more. And more money will come out of the earners and be placed in Washington DC’s hands.

And that’s it.

The poor will not get any richer because of it.

The middle class will not get any better because of it.

It’s a scam. The amount of money they raised will run government for 3 days.

But ha! The kicker…

Remember what I’ve told you about all of this. And it was easy. If they are allowed to raise tax rates once. They are going to be chomping at the bit and they’re going to after it and there’s going to be multiple tax increases going forward.

The same day that Obama, my president, felt comfortable that this deal would be done, he was out there stating, and by the way, I’m not done yet.

He said it!

And they he blamed the Republican congress for the deficit — just completely made up.

So we have a president that has completely taken himself out of the equation that he’s been no part of the debt and has had nothing to do with the deficit. He’s at the top of the mountain overseeing everybody and you’re the ones screwing up and I’m here to save the day.

And the Republicons let him get away with it.

I applaud the President as a politician – the best I have ever seen. But, at the same time, he’s the worst I have ever seen plus Boehner (who I have been blasting on my radio show), and the rest.  

So my biggest worry is that we do not have any checks and balances now because the Republicons and neutered. And they’re going to go for it.

And unfortunately, you’re going to see tax rates continue to go higher for everybody because you cannot take Federal spending from $2.7 trillion to $3.7 trillion overnight with the government never taking in more than $2.4 trillion.

Guess what they’re going to try and do?

And they’re getting it done and it will not change a thing.

Spending looks to be going up to over the next 10 years to $5 trillion a year.

So you got me on what the end game is. You got me on what the goal is.

But that’s where it stands.

Elections have consequences.

The Market

We headed into the Fiscal Cliff. The market was getting hit. The worry had to be, man if they don’t get something done here, this markets going to get hit.

Well they go something done. Don’t ask me why…the market wanted to go higher obviously. And you had a little be of a moonshot in the past day and half.

Today the market gapped up 200 and something, sat around all day until 3:30p and then it had one little mark on close at the end.

Now let me just tell you some of the things that happened today:

  1. The New York Stock Exchange broke out into new high ground…now approaching the highs of April 2011. Keep in mind that the New York Stock Exchange is basically in a two-year base building and looks like it’s going to attempt to break out. In the other words, the New York Stock Exchange has been hardly up in the past 23 months.
  2. The Russell 2000 – same thing. The Russell 2000, which finished at 873, was there in April 2011 and is now moving in to new high ground…or at least getting close.
  3. It’s very important that you look at weekly charts because a breakout from a 2-year range is meaningful.
  4. The Midcap 400 breaks out into new high ground. And again, the Midcap 400 has done nothing – you have to go back to March 2011, almost two years. So you have a two-year base breakout in the midcaps. Now the reason why the midcaps the NYSE are doing better is because they have a lot of commodity and foreign stocks in there. And guess what? Foreign markets have become strong. There is better relative strength in foreign markets than ours and they’re leading us now.
  5.  The Smallcap 600 – same as the Russell.
  6. The Nasdaq – not there yet. Coming up the right side of a base. The Nasdaq is overall, stronger than most others. While all those other major indices are basically flat, the Nasdaq is up about 6% to 7% in the past 22 months. Same goes for the Nasdaq-100.
  7. The Dow – also on the verge.  Needs a little more work also.
  8. The Financials broke out. Go look at the weeklies of the XLF and the IYF.
  9. Go look at the Foreign markets. FXI, which is the Xinhua China 25 Index, breaks out today from a 1-year range.
  10. The Emerging Markets, EEM, breaks out today from that one-year range.
  11. The EFA, breaks out today from the one year range. Those foreign markets had a lot of resistance overhead from March 2011, but they’re going to try.

I’m reporting to you news. You get to decide for yourself. But leave no doubt, I thought the market had a chance two weeks ago to make this move. And the Fiscal Cliff took it down. Now it is making the move. All we can do is keep our fingers crossed. It’s a start. 


6-7 pm EST

Best of Investor’s Edge
Saturdays 1-2 am EST

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.




SOURCE: http://www.zerohedge.com

kaltbaum midday

I will have a lot more to say tonight…
at 1245 pm, markets pulling in just a wee bit from the early morning frenzy. That’s ok…as they came straight up from Monday and today off of news-driven stuff.
There is no way I am jumping on this today. Markets are just back into resistance.
As of this second, a lot of names have tails today…nothing real bad but take a look at CRM or AMZN for starters.
The good news is that there has been a big pick-up in new highs and that means a ton of potential plays will show up.
Real weakness remains in RETAIL…RETAIL actually being sold badly today…very surprising on a day like today though we noted here the recent woeful action. Take a gander at ANN,AEO,COH,DKS,FL,GNC,
GPS,JWN,KORS,KSS,LTD,M,SHLD,TGT,UA,VFC….that’s some ugly retail.

kaltbaum premarket

You may not know this but the russell 2000 is flat over the past 23 months…the s&p is up a wee bit…the dow is up a few percent…is single digits…but things now may be changing. I really thought a couple of weeks back that the market could get going…thus taking a proxy and waiting for stuff to break out. It looks like only thing keeping market down was the assclowns in Washington coming to a decision. Markets were strong Monday and have a hige gap up today to start the new year. Notwithstanding the mother of all reversals, the longer term weekly charts will have breakouts from the handles that have been built over recent weeks…not at recent highs but on their way.

Now…I have to make an important point…THE NEWS SUCKS…taxes are going up…and deficits are going to continue to explode. But the world is printing trillions and that is trumping everything. Fundamentally, longer term, I think this is a horror show that ends badly but we deal with the markets today….and if this move holds, all good.


Financials remain strong. As I have taught you, not much bad happens in the overall market when this occurs.

World markets are breaking out…again, the news stinks…but Europe and Japan now printing furiously and China is easing big time. FXI and EEM moving into new yearly high ground. Germany, London, Hong Kong and many others doing the same.

I cannot in good conscience jump on this gap this morning but this will set up a ton as we move into the new year. For someone who could not do anything while market was correcting, it does not thrill to walk into a gap like this…but it is what it is. Growth leadership has gone nowhere…maybe it gets going now. Try to ignore the news and just watch the market. It is tough for me. Keep in mind, there will be more shenanigans out of Washington…but again, a trillion/year printed here and the rest of the world following. That is a lot of cake.