IT’S THE BIG PICTURE THAT MATTERS MOST!

Whenever markets have an up day, I get the same question:

Have we seen the lows?

I don’t usually get those questions on down days. Could that be it for the downside? I understand psychology. I understand about being swayed by movement. I have news for you. We are all swayed. The answer is…anything is possible. We live in not normal times. We live in a time of zero interest rates, the printing of money in order to send our currency lower and a specific goal of the Fed to have markets go higher. This is because the Fed’s actions have done nothing to help the job’s picture so they look to do something else. Anything can happen.

It is important to not get swayed by a few days but to look at the big picture. As of now, we have had a monstrous high volume drop, a violent few days that did a lot of washing out…forming a near-term low…and a move back up on lighter volume. These are not opinions. I am just stating facts. On top of this, except for GOLD, everything is still trading below the longer-term 200 day moving average…and I mean everything. Of course, there are a few stocks that continue to show strength…but I can count them on 2 hands.

Regardless of what some say, I have seen markets do V-shaped moves up…so it is not out of the question that the recent lows are the lows. But I would like to see some characteristics that define bull markets…not characteristics that define oversold bounces….before I get all excited. I have been one of the most bearish on the street for quite a while but you need to know, there isn’t a day that goes by that I am looking for clues that the market has indeed turned. So far, I have not seen them. I will know a lot more as we head into resistance. And if you want a potentially bullish template, go back to 1998 when the market had a violent move down, a V-shaped move up about half the way back…but then a violent retest that undercut the first low and then off to the races. I don’t predict that…but I am always analyzing previous market cycles.

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.

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