CONTINUED WICKED ACTION
Gaps and reversals…reversals and gaps. Rumors about this and that! How does one play this market? Lightly! But after all the noise, I just continue to look for any changes. For someone who has been overall bearish for quite a while, I am always looking for light at the end of the tunnel. Here is some potential light.
GOLD may be putting in a classic double top. This simply is a pattern that occurs many times to stop a move dead in its tracks for the time being. Gold has been the place to buy when the market has been hit…so maybe just maybe.
The market, kinda sorta, has now visited the lows three times and seems to have held for the third time off of yesterday’s vicious reversal. It is always important to recognize where a market decides to stop going down, at least in the near term, in a bear phase.
My short list of growth leaders continue to hold up. I must tell you that this is amazing as even in last year’s correction, most broke badly. I am talking names like Apple, Amazon, Green Mountain Coffee and a few others. If they ever break, look out.
Lastly, finally, some of my measurements of sentiment have finally turned bearish…of course, which could be bullish.
Hey…just trying to be an optimist. The big picture is still yuck…and for now, any bounce to me is from a continued stretched and extended market. Regardless, this is going to continue to be a tough market to play as one cannot be confident going home long or short just yet. There is just too many outside influences wreaking havoc right now.
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.
It’s true that some of the top growth leaders are holding up and that’s positive for now. However, on the other hand, it is typical for the strongest names to hold up for a while at the beginning of a bearish phase. O’neil himself observed that past leaders tend to finally break more than 5 months after the downtrend begins. They get supported for a while as fund managers come in, late to the game, and think they see bargains in stocks they missed on the way up.
completely agree…
I agree. Many leaders now will follow the herd of selling later which is what’s happening to the weak stocks. Looking at sector rotation is a clue too.