10/15/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST
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https://archives.warpradio.com/btr/InvestorsEdge/101518.mp3
JUST LETTING YOU KNOW
Coming into today, the market’s been under distribution and I’ve just been reporting the news to you. I haven’t predicted anything. I’m just reporting the news. You’ve seen the Nasdaq and the Nasdaq-100 all below the 50-day moving average, which does not kills things. There’s been plenty of times when things break below the 50-day moving average, sit right under them and then turn right back up. It is not a death knell. The death knell is usually the 200-day moving average which is much lower.
Besides that, really nothing else fell below the all-important 50-day moving average and that’s good news.
For sure, there has been some internal damage. More and more stocks have broken support and/or moving averages. Fewer and fewer stocks are working. But until markets break you gotta be careful.
And you know why I’m starting with this?
Man! Most emails that I receive (and I get a decent amount) are all on the bearish stance. I think that’s good news. So many people are bearish. And it’s not just my friend Big Al who’s out there and who’s always bearish. People are taking their money out of mutual funds left and right. They don’t want to be in stocks. A lot of bears.
Now there are other ways of measuring bulls vs. bears and I can rifle off a few that are that are too many bulls. But I just think overall, people are nonplussed about the market. I think that’s good news. We’ll see.
Now I want to read an email. I was asked, do I think we’re going have a bear market this year?
As you know, we don’t predict. We deal with what’s a hand.
I don’t think we’re going to have a bear market this year. I don’t think there’s any way.
When I mean a bear market, I mean the major indices come undone, most stocks come undone, the 200-day moving average gets taken out, and no rallies. I see zero chance in my opinion. But we will adjust if that occurs.
And the main reason is that the Financials continue to act okay. Sure, Wells Fargo came under pressure last week. Sure, the regional bank index is still under pressure. But then you got Citigroup today which is up almost 2 bucks on their crappy earnings. I don’t understand their earnings. They’re so convoluted. But the market liked it. And until the Financials really crap out, there’s just no way we’re going to have a bear market. I’ll think we’ll have selective bear markets. If the Semiconductors are in a bear market, I think the Transports are not in a bear market, but are lagging. I think there’s a lot of areas that are in bear markets or lagging badly.
I just don’t see a bear market this year.
And, of course, we have something out there named Mr. Bubble who’s printing $40 billion in a month or $1.33 billion day. And as I told you, when you have a fixed amount of assets and a ton of money added to chase those assets, those assets are going up in price, notwithstanding the corrections that occur.
But today’s a better day. Something happened today that I think is of note – where we can basically find a spot where we have a great understand that he markets are getting in trouble. That’s what happens in pullbacks and in bounces. Because we can find an area where the market’s showing some support that tells us where we have to draw the line. Now granted, tomorrow Goldman Sachs reports. Along with them you’ve got PNC Bank.
…Johnson and Johnson and Coke and United Health, all three in the Dow. After the close, you’ve got CSX which is a rail. You’ve got IBM and Intel, two very important techs that are in the Dow. Wednesday, before the open, Bank of America, Bank of New York, Pepsico, U.S. Bancorp, M&T Bank.
Wednesday after the close, American Express in the Dow, Lam Research, Wynn Resorts, and Xilinx.
Thursday, Alexion Pharmaceuticals, BB&T Corp, another bank, Danaher, Fifth Third Bank, Keycorp, Travelers in the Dow, Phillip Morris, Morgan Stanley, Nokia, and Verizon. Chipotle and Google after the close that day, as well as CapitalOne Financial…and Microsoft in the Dow.
Friday, you’ve got General Electric, Air Products, Baker Hughes, Kansas City Southern, McDonalds in the Dow, and Schumberger…
So there’s going to be a lot of jello moving on the plate and we’ll have much better idea on the reacting to the earnings reports.
Stay tuned.
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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.