12/11/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

https://archives.warpradio.com/btr/InvestorsEdge/121118.mp3

JUST LETTING YOU KNOW

Of note today – Gold and silver were weak. Oils were moderately green. Financials were green, but a few of them came back for much of the day. Semiconductors were very strong.

And the rest were pretty much mixed.

A few things happened today that are of note. A few little resistance areas were taking out. The Nasdaq got back a smidge above the 50-day moving average. The Nasdaq-100 is sitting on it. The NYSE is in the upper range again. Midcap is in the upper range again. The Russell 2000 broke above a little resistance. The S&P 500 broke above the past week’s resistance. We’re overbought now and we’ll probably get some pulling in.

Texas Instruments said earnings would be down 20%. The stock broke out of a mid-level base today on almost 2x average volume, helping the Semiconductors up.

If you look at the SOX right now, it’s coming up the right side trying to do better, after that reversal on November 16 like everything else. When you look at the SOX, you will notice that back on June 4 and July 17, it undercut the 350 and finished above it which is exactly what it did on November 16. So 350 on the SOX is a definable support level and it is muy importante because, along with the Financials and Growth Leaders, if they don’t go up, the market isn’t going up.

So we watch them all very closely.

Salesforce.com broke out on more than average volume, but it was also had -3% earnings growth. They do have strong sales growth though.

I just want to mention one thing on a defending basis on Apple. For me right now 520 is definable support. A closing break below that level would not be good. How do I come up with 520, especially when the stock was just 505 on November 16? Well it finished about 520. You can go backwards. On May 18, it hit 522 before stopping its decline. On November 16, it broke below 522, but finished at 527. And in the past days, it hit 518, but rallied above 520. On Monday it hit 521 and has held so far.

A break below 520 takes it into a further abyss.

The Fed met today and they meet tomorrow. I believe they make an announcement at 12:30p ET. They can’t lower interest rates. They are at zero. They are already on QE 3. They are printing $40 billion a month. They are still on Operation Twist. They are printing a heck of a lot of money and, in my opinion, they are acting like we are in a massive depression and that unemployment is at 20%. In my opinion, they are insane and are creating dislocations in the market that they’re never going to be able to unwind…it’s a sheer impossibility. They are funding a deficit which is asinine to say the least.

But it has come to be the norm now. And you know why they get away with it? Because it helps markets.

But you can only help markets for so long

They helped the Housing Market too, until House Market decided to laugh back.

As I have said many times, I so hope I am wrong. Price and yield make absolutely no economic sense in bonds. But people who are unwary and that live in the now and don’t think about what could possibility happen down the road are buying at any price because the Fed forces them. We told you awhile back, it may be a couple years. Just remember with the House Bubble, the seeds were sown in 2000, 5 1/2 years before the top. Now this Fed is much more maniacal than the last.

Just be aware. Bubbles wreak havoc when they bust because when the pop, the bad comes furiously and swiftly and you get run over.

We had one in 2000. I remember it like yesterday. You had stocks with now revenues trading at $3 billion market caps…trading at 300 and they went to 150 within days. The rallied to 230-240 where everything seemed a-ok. And within days they were back to 150. And within a year they were at a buck. 

LISTEN TO GARY LIVE ON WEEKDAYS 6-7 PM ON A STATION NEAR YOU AND AT GARYK.COM

6-7 pm EST

Best of Investor’s Edge
Saturdays 1-2 am EST

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.