12/06/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

Byaaronmat-admin

https://archives.warpradio.com/btr/InvestorsEdge/120618.mp3

JUST LETTING YOU KNOW

I’m very careful about every word I say on my radio show. So I did a dissertation yesterday on how great big stocks that have done so well – top out. That’s all I did. I went through the psychology. I went through the fear and greed. I went through the physical action that a stock will do.

I went through the reactions of the masses as well as the analysts…as this big top occurs.

And when I was done, I said these words: “I am not saying Apple is making one of these big tops. What I am saying is that so far, everything Apple has done reminds of all those characteristics of major tops.”

Now I think I forgot to say one thing after to that. And basically that is, as long as Apple is below the 200-day moving average, nothing good can possibly happen. It’s impossible. Of course, when you get really extended to the downside, you can rally up to that 200-day moving average. You can make money that way quite randomly. But you can’t be a gigantic big moving stock to the upside without being above it. It’s physically impossible. So I’m adding that part.

So somehow after doing that kind of dissertation, there are always a couple of you that didn’t listen. And what it came down to was that I said: “Apple’s got a major top and it’s over and done with and that’s and it’s over and it’s going to follow suit with all the other names that, on average, dropped 72% from the high.”

So let me be repetitive ladies and gentleman. Apple is in its own private bear market right now. That’s a fact and it doesn’t take a genius. It’s trading below the 200-day moving average. And when it went into it, it sold off hard and on very heavy volume, indicated that the big money crowd has been selling. On top of that, you’re getting all the bulls coming out giving excuses…”Oh its margin requirements…oh, it’s tax selling…nothing else.”

And my point was, that’s a problem because in the past when you have these big drops, after the stocks 20%…25%…30% down, the excuses come out – “Everything’s fine.”

But then it goes down 50% and things are so fine anymore. And then you wind in in the web. That’s all I’m saying.

But I’ve got news for you. Apple sells products. They may come out with another great products. There earnings may re-accelerate again. It’s got a low multiple (which, by the way, I think can also be a negative) but that’s it. And then let’s what how it plays out.

What I expect from Apple is exactly what it did today: Wild action…action that the day traders love. Because when you become a wide and loose stock, you will start trading all over the map on a daily basis.

So just be careful.

And the other thing I want to mentions that 10-week moving average has just crossed below the 40-week.  These are weekly moving averages, not dailies. They have more impact.

So I just want to let you know. 

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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.