Investors Edge – 10/15/2014 Hour 1

Investors Edge – Hour 1

SLOW CRASH!

CLASSIC TOPPING PROCESS LEADS TO CLASSIC MARKET TOP… LEADS TO SLOW CRASH!

By Gary Kaltbaum
President, Kaltbaum Capital Management
Fox News Business Contributor

Unfortunately, the process has led to the market top of consequence that we thought was occurring. Now we are seeing the market ‘event” that we were worried about. We do not like using the other word.

Keep in mind, the past two meltdowns were caused by excessively easy monetary policy…which caused massive “over-leverage” of the one-sided trade. The Fed has again been successful at setting those conditions as you are seeing the “over-leverage” just start to come off.

At this juncture, somewhere in here has to be some sort of relief rally but notice under these conditions, the rallies only last a few hours. We keep our fingers crossed now that a panic of some sort does not occur but cannot rule it out as the conditions for such are out there. In any case, the market is in definitive bearish form that should not be toyed with.

We are no Milton Friedman but we have to believe the market is forecasting a global slowdown if not outright recession. The printing of money did nothing but interfere with free markets and an economy that should be left alone. The grand experiment employed by the few who have no faith in the US economy, an economy that has thrived for so long, has once again distorted price and yield which gave rise to too much leverage for the third time in 15 years. When will they learn their lesson? And we are only a few percent off the highs.

Add in a feckless administration…and you fill in this blank.

We expect the Fed to intervene in some fashion if things worsen. Yippee!

Investors Edge – 10/14/2014 Hour 1

Investors Edge – Hour 1

THERE’S ALWAYS MORE QE!

A big up day ends not so big…though strong TRANS,SEMIS and SMALLCAPS for a change. We do suspect there is a bounce of consequence out there as the recent drop usually gets worked off with some upside. But there was something else we saw that caught our eye. A fedhead named Williams, by no accident, came out and stated if economies headed south, more QE needed to be looked at. We do not believe anything is said by these people without a reason. Thus…our expectation of more QE may have just been telegraphed.

WHETHER OR NOT IT DOES THE JOB LIKE IT HAS DONE FOR MARKETS FOR YEARS…IS ANOTHER STORY. BUT WE TAKE NOTHING OFF THE TABLE AS THESE PEOPLE DON’T KNOW THE MEANING OF MODERATION WHEN IT COMES TO ASSET BUBBLING EASY MONEY!

Investors Edge – 10/13/2014 Hour 1

Investors Edge – Hour 1

IT IS NOT GOOD NEWS WHEN…

The TRANSPORTS open up 175 points on the back of a proposed buyout in the RAILS…and finish down 175 points. This is indicative of major institutional distribution.

The maarket teases the upside and downside throughout the day…only to melt down again into the close. This is indicative of major institutional distribution.

Just about every pundit on the tube is saying no biggie, everything is ok, it is just a correction, market is cheap…and blah blah blah.

The only good news is that the market is beyond oversold…in which areas like ENERGY are beyond stretched to the downside beyond all norms. This can lead to a good counter-trend rally, even a vicious rally. But the fact the market and certain areas can get so oversold and stretched to the downside is again indicative of major institutional distribution.

And now…earnings about to come out in droves. Expecting random, wicked and vicious action to both the upside and downside.

HOW ABOUT A GOOD STORY OF THE DAY?

SOURCE: http://www.dailymail.co.uk/news/article-2790317/she-said-yes-moment-airman-recently-returned-middle-east-interrupts-nfl-match-propose-cheerleader-girlfriend-routine.html

Investors Edge – 10/10/2014 Hour 1

Investors Edge – Hour 1

Investors Edge – 10/09/2014 Hour 1

Investors Edge – Hour 1

NOW THAT WAS RANDOM ACTION…MAYBE!

Markets reversed on heavy volume yesterday off of nauseating lows as THE FED CHANGED THEIR STANCE AGAIN. This column has noted for years that the Fed is doing everything in their power to stop markets from going against their wishes. So…in an about face, instead of a time table for raising rates…it is now WE WILL LET YOU KNOW. One fedhead, in a timely fashion, stated we should not raise rates for a long while. And away we go.

But let’s be smart here. After scanning the market, for us, not much has changed. What has changed is probably gold is done on the downside for now as the recognition of easy money forever comes back to the forefront. Remember, we have told you the fed would never raise rates unless the market made them raise rates.

After that, we just had a big oversold rally in areas that have been trashed recently…with the best areas holding support. The strongest groups remain BIOTECH, RAILS and BIG FINANCIALS with all holding their 50 day average yesterday. One other note…notice how the SOX held the 600 mark again..the place of the breakout and the recent hold. Also notice how strong a move the SOX had yesterday off that support.

The one thing that gives us pause this morning is how Europe is having a non-reaction to yesterday’s big move…especially the German Dax which we give a lot of weight to. As of this second, the Dax reversed a decent move up but there are still a few hours left. We will continue to watch this closely.

We would suggest that some backing and filling is due as we enter earning’s season…and as usual will pay attention to the reactions for clues.