kaltbaum weekend leaders report

Before Friday, I would have been saying we are experiencing nothing more than a light volume,seasonal strength move off of very oversold conditions as well as very bearish sentiment conditions. I thought the bounce/rally would be somewhat short-term…but I think the action looks to be better. I know Friday was half day and light volume but seeing some good things. The EURO turned the corner (FXE)…and believe it or not, I follow the Aussie Dollar…which is breaking out. (FXA) This is driving the move in foreign markets which is now driving up our market. As the dollar drops, all the weak dollar plays kick into gear. Names like IBM and MCD will get moving only because of that…but it counts. On top of that…check out the EWG (Germany), EWH (Hong Kong), FXI (China), EWT (Taiwan), EFA (eafe index). Foreign markets remain much stronger than U.S. on a relative basis. Look at a name like SAP or TM.

 

 

Received lots of questions this weekend as IBD classified a half day, light volume, no institutions action as a follow through day on Friday. This turns the market back to an uptrend. You are right to ask questions as this call seems to fly in the face of the simple rules outlined for a follow through day. But for me…DOESN’T MATTER. If things start to break out and hold…good. If they do not, there is nothing to do. In other words, the market will have to do a little more proving but in the meantime, we can look to do some probing.

 

On Friday, I wrote to you to probe the GLD and the SLV. Every time GLD breaks above the 50 day, we will take a position with a stop below. I believe that eventually a larger move is in the offing and as you know, I have outlined for you that most big bull markets end in climax run. Gold went up 4-fold in the final months back in 79-80 with the last move being a double within weeks into the highs.

 

 

Here is the small leaders list but as you can see a couple names buyable here…with stops. I would only take partial positions as of now.

 

 

Keep in mind, if I see this move failing, there could be a ton of short set ups as the market has rallied back into resistance.

 

V- New high but no new entry.

 

 

Adding REGN but no entry as of yet.

 

 

Possibly looking to add back EBAY.

 

All positions should be on the smaller size right now. While officially market back in uptrend, we are certainly not in a bull market right now. We are more like testing the market.