01/11/2013: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST
https://archives.warpradio.com/btr/InvestorsEdge/011118.mp3
JUST LETTING YOU KNOW
Definitively…
We had a big gap up the first day of the year on the announcement that…hey they’re going to tax more and not cut spending. But markets were relieved. The market sat around and edged above those highs yesterday and that’s the story.
For this week, the S&P was up just 5 points…but at the highs of a two-year range.
The Dow was up 53 on the week…still not at the highs.
The Nasdaq was up 24…still has some work to do. It’s back up to the March 2012 highs, but not at the September 2012 highs.
The Nasdaq-100 is not back up to the March 2012 highs and has some work to do.
The Russell 2000 has broken above resistance, but keep in mind it’s just a smidge above the highs of April 2011. So that’s 21 months of no gains on the Russell 2000.
And the NYSE looks about the same as the Russell. No gains in 21 months, but we’re back up here.
And the good news, so far, is that after this gap – there’s been no give-back.
Also, we’re starting to see a few names move up and out.
But for me, we now have earnings season coming out. And what we’re going to be watching for is simple: Reaction.
For example, today Wells Fargo (WFC) reported earnings. The stock opened up somewhat badly, down about 3%. But finished down only 1%, so it got defended on any selling and that’s good. We would love to see that, where stocks don’t open so well but they immediately got bought up.
We also know we’re going to see some stocks that gap down and stay down. And we’ll stay away from those.
And then we’re going to find stocks that break out and gap up because earnings are so good. And those are the ones that we recognize have strong demand that’ll beg us to take a look at them and that’ll start next week where a decent amount show up. And then the week after – a ton of earnings to come out.
Foreign markets continue to have a better relative strength than ours. And do you remember many months ago when the market wasn’t acting well, I was telling you that the markets weren’t acting well, but that the Foreign markets were outperforming us? That should have been my cue to starting jumping on them because we know for a fact that Foreign markets outperform us when the market goes up, but they also underperform us when the market goes down because they’re smaller markets and they’re easier to move, and less liquid. That’s that story.
Foreign markets are stretched and extended a little bit to the upside. They’ve been pulling in here for the past week. Wouldn’t mind see more.
I’m also watching the Financials closely because when they don’t go bad, the overall market will typically not go bad.
I saw a little subtle distribution in some names this week, but nothing to get twisted over.
Our currency continues to splat.
The Euro continues to be strong.
Places like Japan continue to – on purpose – crush their currency in order to lift asset prices. They’re onto our game.
And we’ll see how long it lasts.
So that’s a little bit of an overview on what’s going on.
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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.