By Gary Kaltbaum
Fox News Business Contributor

Except for the typhoon (massive flooding north of Tokyo), the 5.6 earthquake and dropping a 20 pound dumb bell on my foot (just 2 broken toes), Japan was fabulous.  Great people, beautiful country and the best sushi we have ever had. Put it on your bucket list.

We have had several themes recently.

After a long topping process and a nauseating drop, we thought the action of 8/24 was about a climactic a washout as we have seen in a long time…thus our thoughts it was a low for now. Nothing has changed there.

This past Tuesday, we thought buyers got the upper hand after the market kept playing defense near recent lows…and then Wednesday saw another nauseating reversal. But then Thursday and Friday’s action once again showed a little bit of that upper hand. It “feels” like it can continue and will now watch for major indices to move above near term resistance. That said, after that, markets will have the massive overhead resistance that it topped out from.

Which leads us into the Fed.

It sickens us that markets have to continue to remain hostage to the whims of a few. We would like to tell you we have the powers of Kreskin but we have no clue how the market will react to whatever they do or don’t do. We have been saying for at least a couple of years both sarcastically and seriously that the Fed will never raise rates unless the markets forced them to. We do believe finally there is a chance they move…but the move remains meaningless as going from 0-1/4% to 1/4% changes nothing except maybe affecting how speculators go about their day. If Mrs. Bubble does not raise rates, we suspect a big pop but that’s just a guess.

Just keep in mind, now more than ever, it should be clear that governments around the globe have no interest in seeing markets go down. While in Asia, all we heard out of pundits was how governments needed to save markets…and in turn,  governments came out and said they would. China is just the loudest poster child but we also heard Europe stand ready for more QE. We are not so sure we can even call them markets any more.

It’s about time someone on Wall Street goes to jail!

SOURCE: http://www.nytimes.com/2015/09/10/us/politics/new-justice-dept-rules-aimed-at-prosecuting-corporate-executives.html?smprod=nytcore-ipad&smid=nytcore-ipad-share

What happened to “buyers have the upper hand?

Greetings from “typhoon Tokyo” where we are told the sun may come out tomorrow.

The “buyers have the upper hand” mantra lasted all of 1 day and 10 minutes…and that is what defines bearish phases. Volume was heavier on Wednesday’s reversal to the downside than Tuesday’s strong day to the upside. Anemic and short-lived continues to be all bounces/rallies have and that is not good news as declining moving averages catch up to price.

Short term wild action aside, the big picture remains the same as major indices remain BELOW massive resistance formed with high volume breakdowns. Leadership remains just about nil and as stated, rallies don’t even last more than a day.

The other part of the equation is that here in Japan, all everyone talks about on Asian tv channels is how markets need government intervention to save the day. I guess they really don’t know what the word “markets” mean! They don’t realise it is all the government interference that is causing all the nonsense. Do you hear that Janet?

Why would anyone buy shares in China if one can’t sell?

SOURCE: http://www.nytimes.com/2015/09/10/world/asia/in-china-a-forceful-crackdown-in-response-to-stock-market-crisis.html

Buyers finally get the upper hand!?

Greetings again from Tokyo as we were warned about typhoon season…and typhoon season we have received. We are writing this Wednesay 3 pm Tokyo time. Having a blast here and now Mets 6 up with a rousing comeback with 24 to go.

Looks like there was a lot of conference calls over the weekend between central banks in order to get the house in order. Central banks know they cannot have a big bear market so they will do everything in their power to keep things afloat and asset prices going higher. Remember, what’s another $15-20 trillion of printed money when you have already printed that amount? And don’t get us started on China and what they are still calling a market. I know markets. Markets are a friend of mine. China, that is no market! But that’s the noise. The real story is market action and that’s all we care about.

Our best guess recently was that the lows of 8/24 would not be taken out any time soon as we felt a massive washout occurred that day. But the aftermath of that day has been nothing short of wild both up and down with gaps to the upside and downside. Last week’s almost 600 point Dow drop was also less than thrilling. But after the nauseating drop, a nauseating back and forth and last week’s poor action, we think Tuesday’s action is significant and believe it confirms our thoughts that the 8/24 will hold for now and think buyers may finally have the upper hand. We did not believe they had the upper hand on the 1000 point bounce on 8/26-8/27 nor the 600 point rally on 9/2-9/3 but Tuesday’s action felt different.

To be clear, after the wild action we have seen, anything is possible. It is very tough to gauge such moves but we are comfortable for now in our thoughts. Keep in mind, while we think we can have more of a recovery, in order to really get things going, leadership will need to show up. There is not much. There are a few airline names, auto parts retail, cruise lines, better action in housing and housing-related but not much more. We will let you know if more show up. We suspect more upside is in the offing but after that, massive resistance that markets broke down from will be next.

Market’s now in no man’s land!


By Gary Kaltbaum
Fox News Business Contributor

Greetings from Japan…a magnificent place to visit. Visited Kyoto, Nara, Osaka and of course, Tokyo. We will be back home Sunday from our 25% business trip, 75% fun. No really, we are hear on a wee bit of business.

We were all set for our award winning look back at the Fed induced 08 collapse as well as what we are seeing now coming out of the geniuses that are running the world. But we kept adding to the report as there is a lot to say. We will now wait until the upcoming weekend for its release.

In the meantime, the Mets remain 5 games up on the Nats with 25 to go.

After the recent huge drop, markets are in what we would call no man’s land. They are simply still stretched, extended and oversold to the downside. A good bounce can occur at any time but notice, as of this second, bounces have been anemic and short-lived. The 1000 point pop on the Dow was normal considering the drop.

There remains very little in the way of leadership, hardly any new highs, hardly any groups in shape with the rest of the world on board with the ugly. Worldwide bearish action is usually not good.

We will let all the strategists tell you it is just a correction. (They are praying) We just knew if 2040 S&P was taken out, look out. The drop has been quite the drop. We expect more backing and filling but a big warning. Major indices seem to be tracing out nothing but a trading range…AFTER the big drop. Normally, when a big drop cannot be bought up, it is only a matter of time before the next levels are taken out to the downside. So stay tuned. A break below the lows of 8/24’s crappy open will be ominous. Again, we say crappy because that morning’s open was full of bad prints and mis-pricing, thus we really don’t know the exact lows of that day. As we have stated, we did not think those lows would be taken out any time soon but last week’s action does not thrill. Bulls are hoping this will turn into another 1998 affair where markets had a short bear market and turned back up quickly that October. We have been bearish all the way down as markets have shown no reason to be in the bullish camp but we would be all for it and will gladly change stance if we start to see markets change their stance but as of this second, ain’t happening. And if we continue to see markets open nicely and fade away all day, you will continue to know the big money still has plenty of stock to go.

We will get the 2 day Fed meeting soon where on day 1, they will be sitting in a room playing Space Invaders, Galaga, Frogger and Ms Pacman. They will then wake up the next day to tell us blah blah blah. We continue to be amazed at the egos of these people that continue to rig,manipulate and hold markets hostage.

Greetings from Tokyo!

It is 730 pm Friday night here in this great city. Yes…we are 13 hours ahead. Jet lagging and jet dragging right now. Just a brief but nauseating note on yesterday. It sucked. Whenever markets are up big and give it back, we consider it as a day where the buyers could not hold as sellers took over. It is quite noteworthy that markets cannot get a head of steam considering the oversold condition. Fake job’s number out at 830 am your time.  We see futures also not thrilling. We will have our usual award winning weekend report for you. Do not miss it as we have been nailing this bear market for you. This continues to be a classic textbook bearish market with no leadership, anemic bounces that only last a day or so but still plenty of hope and prayer.

Our Three Thoughts!

Greetings as we continue our trek to Tokyo.  Loving these long trips.

We had 3 simple thoughts coming into this week that we wrote you about:

1) We were not out of the woods yet! Check! Market fell 600 points in 2 days. We just thought that first bungee jump bounce was just that.

2) Last Monday’s nauseating low would hold for now! Check!

3) Expect more wild up and down action! Discount double check!

Yesterday’s late action convinces us even more that FOR NOW, last Monday’s lows are not going to be taken out. Simple as that. (FOR NOW means FOR NOW!) The rest is all about being in no man’s land as price now starts to catch up with moving averages or you can say moving averages catch up with price. This happens over time while one moves down as price moves up.

Keep in mind…and let us say this loudly. IF THIS EVENTUALLY  HAS MORE TO GO ON THE DOWNSIDE, THESE RALLIES DO NOTHING MORE THAN MAKE EVERYONE FEEL BETTER, HAVE EVERYONE CALLING THE BOTTOM, SUCK EVERYONE IN AND THEN BURY THEM SOON AFTER. So careful. We believe there is a long trade out there for this second but not sure we can go further than THIS SECOND. This is a market that simply is going to p— everyone off before it is all said and done.

The next time we write to you, we will be hanging on the streets of the Ginza! Be well.



The Bull Case?


September 2, 2015

By Gary Kaltbaum
Fox News Business Contributor
Bazinga! As of this second, not feeling the bull case just yet but as we take off for Tokyo today, we just wanted to leave you with what potentially can turn into the bull case.

As we have stated, we do not think last Monday’s lows get taken out right now. We think it was A good low. We just do not think it is THE low. We believe it to be quite normal what has occurred the past few days…a gargantuan bounce up to relieve some of the vicious drop and a turn back down, retesting towards those lows. We suspect we will now see some back and forth.

The bull case is simple. The market must must must must must hold recent lows. This is not a big reach to say. Holding support levels give markets a chance to repair the damage that has been done. We cannot overemphasize the importance. What could cause markets to get defended and hold? Just the same things we have talked about for a while.

We expect the ECB (the lemmings) to continue to follow the maniacal Bernanke mantra…and that is more money printing.

We know the only goal of central banks is to keep asset prices not only afloat but also rising. That is potentially a lot of fire power.

Rate hike in the U.S? There’s no stinkin rate hike coming in the U.S. They haven’t raised rates in almost a decade. Why would they raise rates while world markets are being smoked?

China will just buy up their whole market, arrest you if you sell 100 shares and force you to watch Caddyshack 2 over and over again if you dare say a bad word about the market.

Market patterns look as bad as they can get. Not sure this is good news but one could think there is only room for improvement.

That’s it. Expect some more huge days up and down. Expect more “guess the gap” days. Expect daily wild swings. We continue to be worried that there is still massive margin and leverage out there and not sure all selling is out of the way. Let’s just hope recent lows hold. If they don’t, we then head into the 20s in which everyone then uses the term “bear market!” And if by chance, the lows break sooner rather than later, it will just tell you how weak markets are.

Do we have to say it again?

OK…we won’t. We’ll just let a 584 point-2 day yonking this week speak for itself.

Not saying we are not just going lower but after 584 points down in 2 days after the first big bounce off lows, time to kick back again and see how things play out. Just remember, every day market stays down is another day moving averages play catch-up on the downside.

No leadership, more damage but have the sneaking suspicion recent “bad print” lows do not get taken out just yet.  Would not be surprised to bounce up a couple hundred in here  but if they do crack the lows,  just means market is double ugly. Bulls in prayer mode right now.