LUNACY ON ALL FRONTS

After watching three days in where 500 points was the norm, I thought I would check in with a few thoughts on a few subjects.

THE MARKET

The motto of this market is simple. Don’t blink! The moves are off the charts. The moves are outlier events. There is no way to get a feel for these moves as they are random,silly and stupid. The big picture is gross. I can count on my hands the names of stocks that have held up above moving averages. Except for GOLD and a few GOLD stocks, it has been one gigantic knife to the downside. You must realize that this did not come out of nowhere. The internals were deteriorating for months as noted in this report. The short term is getting more interesting. It is silly to come to any conclusions but I am letting you know that I am closely looking to see if the past 3 day’s action provides some sort of a low.. During bear phases, lows are sometimes carved out when you get wild swings like we have seen the past 3 days. I gather the next couple of days will tell us if this ridiculously extended market gets even more extended to the downside. The FED may just have put a big say into the matter.

THE FED

Where do I start? I can go back to Greenspan but I may fall asleep. Bernanke continues to try and manipulate markets taking from some and giving to others…all the while trying to get people as well as institutions out of cash and into the markets. This is nuts. I continue to not understand how one person has so much power with the markets. Unfortunately, he is just like the politicians and just like the big hedge funds. They are all good at using debt and leverage. That is all Bernanke is about. He continues to tell the savers to go take a hike. You are getting zero on your money…so if you want to earn something, you must go elsewhere. Of course, all that money was given to the banks. But now, Bernanke has told the banking institutions to go take a hike also. You don’t want to lend? Well, you are going to get nothing even if you go out on 3 year paper. You want to go out 5 years? How about less than 1%. So Mr. Bank..go out and loan that money and you will make a few points…otherwise…nada! It is ill that this man just told the markets that for 2 years out, rates will stay low. This is unprecedented yapping on this man’s part and to be clear, this will only end bad. He has one goal…get the markets back up. To this man, up markets cure all ills. As I have told you, all bad news gets glossed over if markets are cooperating. It is only bad when the markets say so. So…he targets the markets. But what have we got for all this nonsense? You tell me. Never screw with free markets. But frankly, these markets haven’t been free in a very long time.

THE SUPERCOMMITTEE

Hahahahahaha! That’s a good one. Super? You mean the people that put us into $16 trillion of debt are now super? They will now put on capes and all of a sudden, life will be better again. How many times do I need to write…don’t p–s on me and tell me it’s raining? Just go look at the lineup. You might as well throw a snake and a mongoose in a box. Nothing is going to get done!

LONDON

Noticed a couple of media outlets saying that what we are seeing in London is a fight between the haves and have nots. What’s my favorite line? Last I looked it is a fight between hooligans, crooks and whatever you want to call them and decent people who work hard and want to live in peace. There should be no quarter and no excuses for these nutcases.

Back to the markets and the Fed. Shorter-term, I do believe there is a big bounce out there somewhere. Tuesday’s bounce did not stick but this week’s lows are still holding. Maybe we get the bounce that sticks for now out of the past 3 day’s nonsense. Markets remain ridiculously stretched,extended and oversold…so they are primed for a good bounce. I am just letting you know that emotionally, I think it will be very tough to play…and I am one that this recent drop bypassed. I do believe everything the Fed is doing amounts to another type of QE3 as they have no other ammo left except to continue to create the easiest monetary policy we have seen in our history. I would not be surprised if that out of their latest “move” that markets react better. Frankly, I was surprised by yesterday’s ugly…but then again, they are not going to make this easy.

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.

 

THANK YOU S&P

A few thoughts and then the markets.

Thank you S&P. I gather that surprises many of you as I have railed against the rating’s services for years. That hasn’t changed. There should have been criminal indictments against these companies for what they did with mortgage securities but right now, they did us a big favor. At least, S&P did. So excuse me Mr. Buffett for disagreeing with you. I know that is not a smart play. But it is my contention that if the con game went on for too much longer, what you saw in the market last week would end up being a walk in the park. I could not be happier that the debt bomb is now front and center. I have been writing about this for quite a while. This will hopefully shut up the deficit spenders but somehow I doubt it. I do want you to keep in mind, these rating’s services are nothing more than publishers of opinions.

Tim Geithner doesn’t matter. What’s the deal with trying to get rid of him? He is nothing more than Charlie McCarthy to Edgar Bergen. In my world, he is not even to be paid attention to. I know…sounds disrespectful. Sorry…just stating the facts.

I have been telling you once the markets wake up to the debt problem…look out! I hope these politicians know they are no longer just dealing with a debt problem but potentially a market problem.

“THE TEA PARTY HASN’T SPENT ONE TAXPAYER DOLLAR!”

Looks like the new talking point is “the tea party downgrade!” It started with John Kerry and David Axelrod…and I guess the usual suspects will parrot the same b.s. Nice try! Last I looked, the tea party has never spent a dime of taxpayer money. Last I looked, the tea party has not spent this country into a $16 trillion deficit. Last I looked, these average Americans are only interested in a better, more efficient and a taxpayer-caring government. How terrible they are! It is disgusting to see these political hacks continue with their talking points. The good news is that it is backfiring on them. And by the way, John Kerry voted for all this deficit spending.

I have still not seen the most important question asked of the culprits…and it is simple:

“In the year 2000, federal spending was $1.788 trillion. Why are you and what are you now spending double that amount on this year…just a decade later! ? Please be specific!” Wouldn’t that be a simple question?.

It should be quite obvious why I have been so cautious over the past few weeks. You should know that this drop did not come out of nowhere. I have been writing to you about the internal deterioration for weeks. Sector by sector and stock by stock went by the wayside. As the weight of this weakness became heavier, it finally tipped the market as a whole. Now what? BE CAREFUL! I have absolutely no clue what happens in the short run. The news is going to be fluid and when markets are so extended to the downside, you get action like we saw Friday as the market whipped all over the place. The big picture is much more important than tomorrow’s gap to the downside…and the picture is simple. The market has put in a major top. This occurred when major averages broke below the 200 day moving average joining foreign markets around the globe. Odds do not favor what many are saying that this is just a garden variety correction and all will be well in a few weeks. This feels and looks much worse. I told you I expected a 15-20% drop and would then re-evaluate. We are close. It will not take much more to turn this into a real Wall Street bear market which is 20% or more.

Getting back to the short term, anything goes. As I write this, Dow futures are down 230…negating some of the talk that futures would be down 500. Notwithstanding something really unprecedented, I suspect a short-term bottom will form soon leading to some sort of rally/bounce. All the news is bad. Everyone is scared and the market is already down 1500 points. But at this juncture, any bounce is for selling or shorting for the aggressive. This should be done into resistance areas or moving averages. Once the bulls come out again and once the bounce peters out, selling will show up quickly, setting the market up for another leg down.

 

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.

THE TREES

Futures just popped on a “supposed” better-than-expected job’s report…but have backed off markedly. Europe has bounced nicely off this morning’s lows also. Just keep in mind that a bounce/rally will occur at any time because the DOW just dropped almost 1400 points in 10 trading days. It would be normal to bounce up a few hundred points as you can cut the bearishness with a knife while markets are extended from the norm about as far as I have seen since 08. This doesn’t mean it has to. I am just saying that’s how things work normally.

Markets are going to be wicked. Markets are going to be random. I will wait until they calm down…hopefully after a bounce. I know there will be good trading opportunities on the long side as bounces are usually violent, vicious and quick. You get to pick your poison as you will be trading against the major trend.

Remember, bear markets are great for us. We know how to sidestep them…and they eventually end, leading to another monstrous fat pitch on the long side.

I will be on Fox Business at 2 pm today and on Fox News Channel in the 11 am hour tomorrow with Neil Cavuto. Also…you may want to listen to my radio show from yesterday where I explain how bearish markets work. The link is here:

http://archives.warpradio.com/btr/InvestorsEdge/080418.mp3

 

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.

 

IF THEY DON’T STOP, EVENTUALLY THE MARKET WILL STOP THEM, PART 5

For the past 2 years, I have been writing reports with the same title on several occasions. Simply put, if they didn’t stop the deficit spending, there would eventually be a tipping point…and it will be the markets that stop them. It is my take that the markets have finally had enough. Politicians around the globe kept taunting the markets with their out of control spending ways…we may now be seeing the outcome. This is not just about the U.S. but around the globe. It is my take that the recent debt ceiling shenanigans finally showed the markets that nothing was going to get done. Let’s spend $10 trillion more over the next 10 years and then cut $2.4 trillion and call that cutting spending? I DON’T THINK SO. But it doesn’t matter what I think. It matters what markets think. Markets are fighting back across the globe. Debt hurts. Gargantuan debt that can never be paid back…killls! It amazes me to watch some say we haven’t spent enough. They need to be muzzled. Again, please recall that Lehman, Merrill, Wamu, Countywide and Bear did not go out of business.

The markets put them out of business.

As far as the markets, I have been telling you for months that there was a good chance we were in a big topping process. But nothing bad happens until the 50 day gets taken out. It was taken out. I then told you that if the 200 day gets taken out, it would invite heavy selling indicating the market was giving up. It was taken out and as you can see, it invited heavy selling…with hardly any let-up. I have also told you I expected a 15-20% drop from the highs akin to what happened last year…but would re-evaluate if we get there. We are getting there. I must now tell you that due to the market having a bull phase of over 2 years, that just may be it for the cycle and a “Wall Street” bear market will occur. For me, a bear market starts when indices break the 200 day. Most of Wall Street use the 20% threshold. No thanks.

The tape is a mess. Except for GOLD, everything has tuned down and turned down badly. Again, at any moment’s notice, the market will experience violent bounces, some last hours, some lasting days. We saw one yesterday. Be very wary of those calling the bottom on every up day. They did it in the last bear…and they will do the same again. The market will decide when it wants to turn back up…not someone’s opinion.

 

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.

THE TREES OR THE FOREST!

In having the privilege to appear on television, host a national radio show as well as write to you, I am always measuring my words carefully. At junctures like this, even more so. The market has obviously turned bearish and most likely, the past five months were nothing more than a topping out process that I have written about so much. For me, the completion of that process is a break below the 200 day…which has now occurred for just about everything.

World markets are amazingly worse than ours. I just need to remind you that if indeed this bear phase has more to go, you need to know the rules are different. In bull phases, oversold conditions start new rallies that last and go into new high ground. In bear phases, oversold conditions only serve to halt the selling for the time being until the selling shows up again. This usually occurs on a bounce, typically a vicious bounce which tends to get everyone bullish again. So be careful. The trees is the short-term maniacal action…just like today’s whipsaw The forest is the big picture…which as of this second, isn’t pretty. Yes…there will be great trading opportunities if caught correctly…but it is always better to trade with the major trend. As always, you get to pick your poison. My best guess remains at the very least, this will turn into something akin to last year in which major averages dropped 15-20% from their highs before turning up. If that occurs, at that point, I reevaluate on whether the so-called 20% bear market threshold gets taken out. I do know the Fed is out there and more than likely, a QE3 will be announced. I am not so sure it will have the same effect as the first two as markets become smarter and smarter on whether something like printing money will work again.

 

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.

 

YUCK!

The market remains in trouble…and in spite of oversold conditions, continues to get rocked. A few more things sticking out for me:

The Transports are in imploding mode. Not good.

The German DAX continues to implode…not to mention other European markets. The DAX has been a pretty decent leader of moves.

Some stronger retail names now look like they are starting to roll over.

This is on top of all the other nausea I have talked about.

Again, a clean break of the 200 day moving average and the next leg down will be assured. A few indices are already below with the rest on the cusp. If that occurs, expect something akin to last year when major averages dropped 15-20% from their highs. The worry this time is that the Transports are indicating recession. I knew the economy topped months ago but looks like it is getting worse.

 

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.

 

THE CON GAME CONTINUES

I just watched the President come out and state Washington was on the verge of $1 trillion in spending cuts over 10 years. I also heard him say it was the lowest level of spending since Eisenhower. I also heard him say things got done because of Americans whose voices Washington heard. HAHAHAHAHAHAHAH! Let me get this straight, since Obama became President, annual spending has gone up about $1 trillion/year…and now we are going to get cuts of $100 billion/year…and of course, a committee to form a committee to look at other cuts. Again…hahahaha!

Nothing has changed. The con game continues. As I told you, there will be no default as the debt “ceiling” is going to be raised again, averting the made-up default. Yippee…yeah…yeah. Before I talk about today’s nonsense, I must go backwards to show you how we got here. It was easy. Take a few pretend conservative Republicans, a crisis that brought TARP together, a Democratic House, Senate and Presidency and a dishonest mainstream media and you have a simple recipe’ for $16 trillion in debt. LET ME REPEAT THAT. THIS COUNTRY HAS INCURRED $16 TRILLION IN DEBT WITH NO END IN SIGHT. This has all been done on purpose. Federal Government outlays have almost doubled in 10 years…thus your deficits. I don’t want to hear it was because of Bush tax cuts. The fact…and let me repeat…THE FACT is that revenues soared from 2003-2007. It’s about the spending stupid and Bush was no angel! Under Bush, yearly deficits ran anywhere from $150 billion to $450 billion. That was bad enough. The Republicans could have done something about those deficits but did nothing. Back then, Republicans were ok with deficits. They did nothing. Enter Barack Obama.

And I quote:

“When I’m president, I will go line by line to make sure we are not spending money unwisely!”

The President immediately rammed through an $800 billion stimulus and if I recall correctly, a $400 billion supplemental spending bill.

And I quote:

“We Can’t Treat Tax Dollars Like “Monopoly Money”

And I quote:

White House budget director Peter Orszag : “The President strongly believes that as the recovery strengthens and job growth returns, we will have to take the tough steps necessary to return our nation to a fiscally disciplined and sustainable path.”

Of course, all lies. This President has taken the deficits into the stratosphere. Accrued debt was $6.3 trillion upon the Obama inauguration. At the end of fiscal 2009, accrued debt was $7.5 trillion. You know where it is now. This from a new President that said he was going to be fiscally responsible. This also does not include his healthcare bill in which we are told will cost $1 trillion…just multiply by 5-10 times.

Deficits happen on purpose. This President promised to unwind the massive deficits but didn’t. This President said one thing and did the exact opposite. He could not have done it alone. The mainstream media, as usual, fell on their swords. No longer were they watchdogs, they were lapdogs. Many who excoriated George Bush over his deficits now said deficits were not only needed but were too small. I get a kick out of every time I see Paul Krugman call for higher spending. These people don’t even care that they are on the record from years before. And I quote:

“We have a world-class budget deficit,not just as in absolute terms, of course — it’s the biggest budget deficit in the history of the world — but it’s a budget deficit that, as a share of GDP, is right up there…comparable to the worst we’ve ever seen in this country…. The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent.”

The deficit at that time in 2004, $417 billion. Fast forward to the last year…and I quote:

“These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.”And I quote:

“And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Deficits now…a measly $1.5 trillion. Yup…$417 billion is a horror show…$1.5 trillion is not a problem and just fear mongering.

Enter the tea party:

While the massive spending occurred, many became angry. Out of this anger, a new “party” was born…the Tea Party. Their words and their thoughts started to gain traction…so much so that they affected the elections in a major way. Republicans took back the house and almost the Senate. How did the media react? Did the media embrace these ordinary Americans they cared so much about? Nope…they tried to turn these people into racists and extremists. I will not bother you with some of the quotes. They are nauseating. The amazing thing is that these quotes didn’t just come from non-events like a Bill Maher but they were parroted on a daily basis by numerous hosts on a cable station owned by NBC. They were trumpeted by journalists from important newspapers like the NY Times. Imagine, people who care about the fact that this country will never ever be able to pay back these debts that have been incurred over the past decade…and have gone into hyperdrive in the past few years..and you are a racist and the extremist.

THE DEBT CEILING

There isn’t any debt ceiling. There is only debt and no ceiling. The debt ceiling is going to be raised again and again and again. There wasn’t any deadline. It was purely conjured up out of thin air…nothing more than a scare tactic. That’s what these people do. There was a very good chance to use some leverage and all that was done is a measly $1 trillion cut OVER 10 YEARS and some sort of a committee on more cutting. Don’t p—s on me and tell me it is raining.

I have watched this year at the State of the Union, Obama said “now is the time to act” on the debt. Instead, he produced another debt-laden budget. Think 97-0 voted down.

I have watched incredible scare tactics against the elderly by the President himself. The media said nothing. What do you think they would have done if that was George Bush scaring the crap out of the elderly?

I have watched the word “compromise” used hundreds of times. The mainstream media has been blaming the Tea Party all week for not wanting to compromise. How was the compromising when the Dems had the White House, Senate and the House? Does anyone remember, “we won…get over it?” I judge a politician by what he or she does with unfettered power. You saw what this man did when he had such power.

I have watched journalists call ordinary Americans terrorists. One called a good woman a slut. Why? All to protect an administration that has run amok with taxpayer dollars. This President just does not care. When he had the ultimate power, he could have done wonderful things. He was loved by many. Those that were skeptical, were hopeful. He could have got anything done. He sure did! Instead of using the bully pulpit to put this country on better footing, he has ripped the taxpayer apart for years to come. But we could not get here without the Republicans. There is no victory here. As I told you last week, there would be no default. I am telling you now there will be no cuts. They will just be replaced with more spending.

The only hope at this point is that there are 300 million people in this country. Somehow, some way, we need to find almost 535 people out of that 300 million that will actually do something about what we are seeing…and that is the destruction of future taxpayer earnings.

This remains nothing more than a con game where they tell you to watch the right hand but they rip you off with the left. The con artists continue to treat you like you are idiots. The ceiling is lifted once again with many taking victory laps. Washington is again acting like they did something good for the people. Washington only does good for Washington. Amazingly, I am reading that the left is mad at Obama for supposedly giving in. I have news for the anyone on the left who loves massive government spending. You should be doing cartwheels and lighting cigars at this deal.

The markets will react well just to the fact that the fake default will not occur. Just don’t blink. If they do not stop…and it looks like they will not…the market will eventually stop them!

 

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.

 

AGAIN…MAJOR SUPPORT!

I will have a bigger report covering the con artists as well as the market on Monday but wanted to send this short note out to you today.

Major averages are now back at longer-term support…where they held nicely the last time. Remember, support is just that…a place where the big money crowd stand up to defend the market. As I write this, the S&P is holding the 200 day. The Smallcap 600 is holding the 200 day. The NYSE, Midcap 400 and the Russell 2000 have undercut but as I write this, are trying to reverse.

It is early, so anything can happen by the close. Just wanted to let you know we are back to that important juncture where markets held back in June. Also, add in the fact that you could cut the bearishness with a knife as the con-artists try to scare the c–p out of the average hard working American who caused none of these problems. It is still early in the day…but markets have already been hit hard on the fake default crisis. THERE WILL BE NO DEFAULT!

 

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.

IF THIS IS ARMAGEDDON?

This past weekend, I received no less than a couple of dozen emails asking me just about the same question. Should I sell everything in case no deal gets done? Frankly, I don’t blame them for asking. After watching the mainstream media trying to scare the crap out of everyone over the weekend with Armageddon talk, one would have thought the DOW would open down 1000 points.

To be clear, I am not saying the market is not about to top out and head lower. For all I know, the DOW finishes down 300 today. What I am saying is that coming into today, the market has ignored the dire warnings. In fact coming into today, the Nasdaq 100 was in new high ground with many other indices close behind. So before you start to go out and sell everything, why don’t you take a good look at the market first? Do not let others sway you. There is a simple procedure I follow. Watch the 50 day moving average. The market cannot go down if major averages are above it. As of this second, they are all above. If markets break below, then I will look to take action. Currently, the 50 day is about 2-3% below these levels.

Of note:

The market has been improving as of late. Even the worst areas, financials and semiconductors have come off their lows, thought they remain relatively weak.

A few bellwether growth names have actually moved out to new highs. I always like seeing that.

Again, all major averages remain above the 50 day. A break back below the 50 day will be a negative.

On the negative side, there should be no doubt that the internals of the market today are much worse than the last time major averages were at these levels…which eventually will come back to haunt things.

As far as the noise out of Washington, I expect a deal to get done. Why? The last I looked the next election is around the corner. Unless they all want to be looking for jobs come next November, something will get done. But I must say, a deal to raise the debt ceiling without cuts will ultimately have repercussions. Those that follow me know I live by a certain motto when it comes to these charlatans in Washington. It is simple logic. “If they don’t stop, eventually, markets will stop them!” Remember Lehman, Bear,Countrywide, Wachovia and Merrill? They did not go out of business. Markets put them out of business. Why? Too much leverage and debt. Where is the most leverage and debt right now? I will have more on this nonsense in the coming days.

 

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.

 

IS GREECE THAT IMPORTANT?

The “another life preserver for Greece” has markets feeling it. The EURO is strong which means the DOLLAR is smoked. This has markets juiced as the weak dollar/strong markets correlation continues. Overall, major indices remain in the same multi-month trading range I have been talking about but now, technically, the major averages have a chance to move out of range. Let me remind you that a breakout for major indices above old highs off of a long trading range is huge. A technician could not ask for more. Do not argue with it. I know the news stinks. I know unemployment is high. I know housing remains in a depression. I know Washington continues to destroy the future. I follow markets. They have been known to go against the least possible expectation. I did want to also add that for the first time in a while, financials actually have a bid as again, they get a life preserver when Greece gets one. I still don’t trust a word that comes out of their mouth but have to recognize, they do have an impact on the market. There may just be another leg up for this market…but don’t blink. Important resistance lies at 12753 and then 12876 for the Dow, 1356 and then 1370 for the S&P, 2879 and then 2887 for the NASDAQ and 2819 for the NDX…which is very close right here. Just remember, resistance must be taken out.
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.