07/27/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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https://archives.warpradio.com/btr/InvestorsEdge/072718.mp3

JUST LETTING YOU KNOW

Quite an interesting two days.

Going into 3:00p Wednesday, the Dow was down 200. The Nasdaq was down big. And then a leak about how the Fed going to announce more printing of money, come this week when they meet. And it reversed the market about halfway.

But the market still looked kind of awful. The market was messy and range-bound, with not much leadership.

Thursday morning, the futures were down Dow 50 or 60 points. And then a gentleman by the name of Mario Draghi, who is the president of the European Central Bank (basically the head of the European Fed) announces that they’re going to do everything in their power…meaning they’re going to print a lot of Euros.

So we gapped up 250 points yesterday, which for me, is a good start. Investor’s Business Daily called it a Through Day (FTD) because the major averages never broke support.

So the futures were flattish this morning.

And Mario Draghi opens his yapper again. Futures immediately go up. And at one point today, we were up about 100.

And then, the news comes out about just what Draghi’s doing to do. The going to cut rates, do a long term refinancing on whatever debt there is, and they’re going to buy bonds.

But you ask, how are they going to do this? How is it possible?

It’s simple. They create money. They are going to the school of Greenspan and Bernanke (especially Bernanke) and they’re creating money out of thin air and adding it to the system to hopefully fix things up. Now in Europe, yields in Italy and Spain have skyrocketed. It’s the same thing that has happened in the U.S. except that our Fed bought 60% of our bonds in the past year. Well, they’re following suit in Europe.

We’re not talking about small amounts of “printing of money.” We’re talking about trillions. Trillions!

And if there’s anything we know, the market loves it.

And the market immediately went from 100 to up 220, settled in…but let me be clear and concise here. I don’t care about yesterday’s 250. I don’t care about today’s 187.

I care about whether growth stocks are showing some real strength, backed by conviction and breaking out of range. And today, we finally got some.

And simply put, let’s hope it sticks.

But 7 out the past 8 FTDs failed. Some miserably.

Now the cynic in me is saying it’s just “more money printing” and it’s “end of the month window dressing.

But the market guy in me says, “Man, there’s some compelling good action here, over the past day, and a gap.

Let’s hope it continues. I don’t have a prediction. I just have a hope. I know where leadership is. I know where strength is. 

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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.