kaltbaum weekend report
First off, the leaders list which with EBAY and KORS coming off, is now down to 6 names…with a few just holding the 50 day. This list numbered 23 just weeks ago..telling you the ice was getting thinner. Please review all the names that used to be on. All came off list as they broke 50 day moving average. Just knowing to sell at this important juncture saves you a ton of money. Go through the following list:
AAPL,AMZN,ALXN,BIIB,CRUS,DLTR,EQIX,GOOG,KORS,LNKD,MLNX,RAX,ROST,SWI,TJX,UA,ULTA,WFM.
This is what is left. There should be no buying right now as market remains in correction which deepened in the past week. AMGN and N are sitting on the 50 day. EXPE,HD,MA bounced off the 50 day with V holding stronger at the 21 day.
AMGN- Pulled into 50 day.
EBAY– Looks like it is breaking also…off list.
EXPE- Sold down on PCLN/KYAK buyout but holds 50 day perfectly.
HD- Holds 50 day on Friday.
HD- Holds 50 day on Friday.
KORS– Breaks 50 day on volume…now off this list pending earnings report this week.
MA– Holds 50 day on Friday.
N- Right back down just under 50 day.
V-Holds 21 day on Friday.
In bull phases, one uses corrections and pullbacks into support and/or 50 day average to buy or add positions. In bear phases, one uses oversold conditions to gauge the bounces in which you look to short into as things move back into resistance and/or moving averages. Right now, this is a bear phase. Until the market gets a follow through day, you must be on your guard. Wall Street will stay bullish. Analysts will defend their stocks…and they will defend all the way down to a 100% loss. AAPL has dropped from 705 to 540 and now one analyst has downgraded but several have defended. It is almost fun to watch but it is no fun if you listen.
The negatives:
All major indices are now below the longer-term 200 day average…with the S&P just below. Nothing good happens if below.
The NASDAQ/NDX are leading down. These two major indices have led the market both up and down for years.
We continue to see big blow-ups in stocks off of earnings. This does not happen in bull phases…only bear phases.
The UTILITY index has imploded…another negative sign. Utilities top out a few months in advance of a bear.
The glamour growth stocks have been shelled. These stocks along with the leading growth names are key to the market.
The positives:
SHORTER TERM, markets are oversold. Even the put/call spiked on Friday indicating bearishness is finally picking up. But remember, the short term is the trees. Everything else is the forest…and right now, everything else does not look thrilling this second. This is all occuring even though the Fed continues to print money. For 3 years, every announcement of more money printing sent the market ahead. This time, the market was juiced for a day before turning down. I have said for months it will be very bad news the day the market ignores Mr. Bubble.
I expect a good amount of shorting if we get any bounce back into resistance. The best shorts in the market occur into the bounces as oversold conditions are relieved and the selling shows up again. I will start giving you names to watch in the days ahead.