Greetings from Orlando airport as I head out west for the next few days.

After the initial knife to the downside, the past seven weeks has been a series of flops and chops, gaps and reversals and loads of wild action. But when all was said and done, it was nothing more than what I told you about how bear markets work. We have seen nothing more than a very stretched bear market that bided its time until moving averages caught up to price. A quick glance at the S&P will show that just yesterday, it touched the declining 50 day moving average. Today, selling picked up right off this all important area.

While the NDX and NASDAQ have held up better because of a few big cap names starting with Apple and Amazon, so many areas of the market had built bear flags. Those bear flags are now giving way as Financials, Steel, Coal, Oil and just about all commodity areas break into new low ground. On top of that, I am seeing areas like China, Brazil, Emerging markets and just about every other country break off wedges or into new low ground.

It is what it is. As I have written, take away the wiggles and the waggles and you have classic bear market action. Classic in how it topped…classic in the reaction to the top….classic in the bounce…classic in the run up into moving averages and now classic in the selling right off the moving averages,

The blame today will go to the Fed but frankly, I don’t. The Fed’s ineptitude has been on display for years. I still shake my head as to how one man who has been so wrong for so long, reactive instead of proactive…could have so much power. Oh yeah…Washington gave him that power.

I hope you realize bear markets only get unwound in time. No “twist,” no Qe3, and certainly no sham of a tax and spend bill will help. I have no idea how far this leg down goes both in time and price. I just know that the bear continues with many areas already leading into new low ground. If you would like to get an idea of those new lows, just check tomorrow’s Investors Business Daily and you will see how this list has now picked up markedly and in many sectors.


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.