kaltbaum weekend report

N– Breaks 50 day…off list for this second.

V-Holds 21 day on Friday.

 

SHW- Adding back SHW as it gets back above 50 day and now basing above it.

 

Real crappy week but notwithstanding the Middle East really blowing up, I believe Friday’s action potentially puts a near term low in. But caution…in bearish phases, bounces will only last so long. They serve to work off oversold conditions and when they peter out, selling shows up quickly. So shorter term:

 

For starters, it is a shortened holiday Thanksgiving week…where normally you will see seasonal strength but I am seeing other things.

 

Apple looks like it had a pretty decent high volume reversal. I am now seeing all kinds of reports telling about Apple’s drop…after it was already down 200 points from the high. If Apple rallies up, things will follow to a certain extent.

 

I am also seeing a few growth names looking like they are going to hold their longer term 200 day averages. I expect them all to eventually break but when it first time, usually a bounce occurs. Take a gander at AMZN,GOOG,EQIX,BIIB and a few others.

 

Look where the financials are holding…XLF and IYF right off the 200 day.

 

Finally, saw the highest put buying since May…after a big drop.

 

So…odds favor we bounce here…but it is important to recognize that the short term is the trees. The forest is that all major indices are trading not only below the all-important 50 day but the vitally important 200 day average. On top of that, when I do my sector analysis, I am down to a handful of groups that remain in uptrends like HOME IMPROVEMENT RETAIL, HO– USEHOLD APPLIANCES, INSURANCE BROKERS and that’s about it! I can promise you with leadership so thin, there is not going to be a ton of upside on any bounce.

 

Now I want to make sure you know that the new bs is the fiscal cliff which I call the fiscal stiff. The new mantra is that when a deal gets done, the market will pop…and everything will be just fine. They don’t tell you market topped out way in advance of all this. On top of that, someone will have to explain to me how raising taxes will be good.

 

Since the service sold in advance of the drop, the service has no stocks to sell on the bounce. But the service has been waiting patiently to short bounces and that is what we will do.

 

I am sure there are those that want to play a potential bounce. I will let you decide as I have no interest in playing short term moves off of weak conditions…in a shortened holiday week.