Investor’s Edge: 08/31/2015
*As of Friday’s 8.28.15’s Close
By Gary Kaltbaum
Fox News Business Contributor
A few thoughts in and out of the market:
The Mets are 5.5 games ahead with just 32 games left to play. We can finally watch baseball into the end of the season.
The national media has been mostly silent on this but insurers just won huge health-rate increases. Yup…that Obamacare is just kick a–!
The national media has been mostly silent but a measly 200 Generals and Admirals came out against an Iran deal where it seems this president is negotiating for the other side. Just saying!
Monday’s open was a farce and has been played down too much. Time and price were nether efficient nor effective. Investors were ripped. Is this going to be the norm whenever things get out of hand?
The biggest movers this year have been “no sales” biotechs…but there is no bubble.
This whole week had nothing to do with Aunt Mary and Uncle Bob. When you drop 1000 on Monday only to be only down 100 by midday and then drop back 500, when you are up 400 on Tuesday and drop 600 in the last hour, when you fly all over the map moving 300 points at a time in minutes, when trading is paper thin, when a horrid sell-off turns into a vicious ramp and back again out of nowhere…the inmates are then taking over the asylum.
And the Fed. What an abomination of an agency that has to wait for data to come in before they move. The problem with that has always been that the markets move before that same data show up. It is sickening now that they have set up one day in September to be the end-all-be-all when it means absolutely nothing in the scheme of things. Whether they stay put for the zillionth time or imagine the horror of going from 0-1/4% to 1/4%, IT IS MEANINGLESS. Yes…that’s what the big move could be. Yet they now hold markets hostage making all wait with bated breath. These interlopers should have been shut down ages ago. We will now have to hear the daily drumbeats from every Fedhead on a daily basis, each contradicting the other. We long for the day when markets stick the middle finger back at these people who do not have any idea what free markets are about.
After “the most stretched, extended and oversold market we have seen since 1987,’ markets finally got the “vicious bounce” it should get after such a move. At one time Monday morning , the Dow was 2300 points below its 50 day moving average. This never lasts. Markets always revert back to their norm. One just does not know in what time frame.
The best way we could describe where markets are right now is “no man’s land!” It is a place where one does not have the greatest of edge if they are bullish. On the long side, you would now be buying after a vicious rally but under a massive longer-term breakdown of markets. After we scanned over 2500 stocks and 200 sectors, all we found on the daily charts were a crash and a ever-lighter wedge back up…which we must say is not usually good news. If you were a bull, the best thing you would want to see is a few weeks of backing and filling to let things settle down before potentially moving higher into resistance. Unfortunately, in bear markets, it is these areas where markets sell off from…continuing the bearish trend. But markets do not give a #@%# what people think so be ready for anything and everything as China just buys up their market with more debt, Europe announces the potential for more QE and our Fed, well our Fed cannot be audited so who knows what the heck they do on a daily basis.
There is no leadership. There is only a small percentage of stocks even above the 50 day average. There are hardly any new highs. There are maybe just a couple of sectors in play. So…take your time, go slow, keep your wits about you. We do not believe a multi-month top in markets here and around the globe just ends with a few days down, albeit a few big days down. We believe there is more yuck on the horizon and would not try to be a hero. We would talk currencies but don’t want to put you to sleep. Let’s just say there is something very wrong there also. There is going to be a lot of countries p—ed off at each other. Mark those words down.
For us? We are headed midweek to Tokyo for business and a little sightseeing. Who knows? A Kaltbaum Capital Tokyo office may be in the offing. Hopefully, we can see some good Japanese professional wrestling.
Investor’s Edge: 08/28/2015