SOME RELIEF

After another nauseating high volume sell-off, the market is getting some relief. As I write this, the Dow is up 80 and the Nasdaq up over 30. It did not start too well as futures were way down. The market is in the midst of testing the recent lows of last week. I just urge you to remember, the market remains in a downtrend. I could not blame you for trying to catch some longs. In fact, some of the higher beta, growth names are covering some territory to the upside. Again, just remember the market is in a downtrend. This means rallies tend to be sharp, quick, make you feel good, suck you in but then ultimately disappoint as those rallies are fleeting. Eventually, we will get playable rallies that last weeks. This is a characteristic in bear markets. Markets will typically first have a follow through day that gets things going. I am not sure we are there yet. Regardless, this market is going to remain a tough enterprise to navigate even for the best of stock market operators.

Just a couple of sector notes:

I am seeing the Auto parts retailers starting to bubble up. This group has done well in the past when markets are defensive as it has turned into a defensive group. Maybe something to watch.

Also, you do recall I thought Gold was going to put in a double top. As soon as it broke the highs again, I knew I was wrong. Since, I have been amazed how lackluster gold stocks have performed in comparison. I am letting you know that the gold stock group, as a whole, may be completing a loooong base to possibly play off of. I am still not sure but if the group indeed breaks out, could be something to look at. The GDX is a good proxy for gold stocks.

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.