A few early morning notes!

By Gary Kaltbaum
January 6, 2015

It is not even 10 am and we are already receiving a bunch of emails asking us if this early action tells us we will stabalize soon. Really? It’s not even 10 am.

This is why we use the terms “trees” and “forests.”

The trees are the short term wiggles and squiggles. That’s the intraday action, the daily action, the gaps to the upside, the gaps to the downside and all that crap.

The forest is the big picture. That is how many stocks are in bull versus bear, how many sectors are in bull versus bear, how many countries are in bull versus bear, what sectors are in bull versus and bear and so on.

We can reverse up today. We can finish down 400 today. Anything is possible. We don’t know. What we do know is the big picture continues to worsen as more and more names went to the negative side of the ledger this week. Of course we can rally. Of course we can bounce. After all, as we write this, the DOW is down 800 points in 5 days. It would be normal to have some sort of rally soon. We actually believe we could have a short term rally soon.

Nothing is ever 100% sure especially when you have maniacal central banks at the ready. They will probably start yapping soon as they watch markets swoon. We do believe there will be some type of QE4 this year as our fed is addicted to easy and easier money whenever trouble looms. Maybe that helps or maybe the markets finally ignore. Time will tell.