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.

 

Test of Stock Blotter

[table id=2 /]

Test 4

Gary:

Looks like it’s working. I will walk you through everything when you have some time.

Eddie

Test 3

Gary:

I am testing something that should allow your subscription posts to get sent via email. If you get this email the test was successful.

Eddie

test email from Eddie

Gary:

I am testing a way to for you to post articles for your subscribers, while simultaneously sending them the same message via email.

If you get this email, it means that my test works because all I did was post this article to the site.

Eddie

P.S. It looks easy and you may be wondering why I didn’t figure this out months ago. Well, I did tons of research and this method simply didn’t exist back in April.

TROUBLING ACTION IN MANY AREAS

Greetings from Venice, Italy. Wow…quite the amazing place. In the past 2 weeks, my family and I have traveled to Barcelona, Naples, Rome, Florence and the Amalfi Coast. Having a blast. You must…you must…you must visit these great cities. Finishing the trip off in London before coming back home.

Lots going on since I have been gone…just continues to be the mother of all news-driven markets. Taxes, debt, Italy, Greece and on and on. It never stops. One would think the DOW would be at 7,000 by now with all the “bad news” that is out there. The fact that the major averages were just near recent highs amazes me.

We head into a big earning’s season next week so pay attention. Before I left, my last few reports were becoming more positive. This was based on long-term moving averages and support holding. On top of this, I liked that many growth leaders were turning up. So while long-term support held, the top of the range is acting as a strong ceiling. The main reason major averages can’t break out is that there remains too many areas in poor shape…that if not resolved to the better, should come back to haunt the market.

I am worried about the SEMIS. They are imploding again as the SOX could only rally back up into the 50 day. They were smoked in past days on worsening outlooks. Those that know me know that I put major importance on this group.

I continue to be worried about the FINANCIALS. I must repeat…THEY CONTINUE TO ACT LIKE IT IS 07 ALL OVER AGAIN. In fact, many important big names are near or at recent lows…some yearly lows. This is very important and bears watching. Just take a gander at MS ,GS, BAC, BK, WFC, JPM and many others.

I am worried about many countries around the world not only lagging but breaking down…some badly. Take a look at the charts of ETFs like FXI, EWZ, EWG ,EWH representing places like CHINA,BRAZIL,GERMANY and HONG KONG. Many others look the same.

I do not like that I have seen in recent days many failed breakouts.

I am not thrilled that the S&P is back below the 50 day. I am not thrilled that we are already seeing higher volume selling in the market.

To recap, long term support held…but a move back into recent highs was smacked down. There remains very worrisome underneath-the-surface action while all this is going on. This remains the toughest of all markets. A market that gaps up one day and gaps down the next day. A market that is still in a trading range that goes back 6-7 months. A market that simply drives many up a wall. Should be quite an interesting earning’s season.

 

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 WEEK STILL ROLLING

A very strong and much better-than-expected PMI has the juices still flowing. All good news. Recent action should serve as a lesson as you never know what can come of a market putting in a low or putting in a high. Just to backtrack…last Friday, I wrote that major averages were on the cusp of breaking long-term support and needed to put in a goal-line stand. As the week moved forward, it got easier and easier to say the hold of long-term support was getting stronger and stronger. Knowing this, I even started buying. Based on what I am seeing, the 200 day is a definitive hold now. Anything can happen in this nutty world, but for me, odds favor the recent lows will not be violated in the short term. The internals and technicals are that much better. Important DOW names like IBM,MMM,UTX have turned the corner racing up their right side. The same goes for many sectors of the market.Keep in mind, there is still plenty of resistance. There are still plenty of uglies…so my best guess in the near-term is that this now very overbought market will soon start spending some time consolidating recent gains before attempting higher prices. I am not in the camp that the market is just going to break out to new highs. Resistance must be worked through.

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.

 

COPPER TURNING UP – VERY IMPORTANT!

I watch everything. I especially do a lot of intermarket work to tell me the driving forces behind market moves. One of the most important linchpins for the market has been the direction of copper prices. It has been an excellent gauge of what the market thinks and potentially on the economy. It has been a good indicator both up and down. Today, COPPER is on the verge of jumping above important resistance. All other commodities are very strong today. In recent days, the market has held long term moving averages like a trooper, leading to nice upside this week. This move in COPPER may be another piece to the puzzle. Of course, the move must stick. I am just happy to see the move occurring. Could be another notch in the market’s belt.

 

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.

200 DAY NOW ACTING AS STRONGER SUPPORT INTO QUARTER-END

I am already being asked if this is THE low. Let’s hope. For now, I see it as a low in the short-term.  Won’t go any further yet. Yesterday I told you the 200 day was providing support into the quarter-end window dressing period. As of this second, the support is now stronger. While major indices are only a couple of percent off of it, I am seeing some good underneath-the-surface action appearing. Leading growth names, in particular, are not waiting for the market. Commodities are also joining in a little upside, including the recently weak OILS.  Of course, this couldn’t happen without a weakening DOLLAR. Now, before you get all excited, just realize markets have massive resistance overhead, end of quarter is near and next up, the always enjoyable nonsense of earnings season…where everyone seems to beat guidance. The one area that should scare the bulls remains the FINANCIALS. Watching the charts of GS,JPM,MS and others continue to remind me of 07. Even today, they are not only not up, but they are being sold down again. But the good news, the bounce/rally off the all-important,vitally important 200 day continues. Of course…don’t blink.

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.