Paris…nous sommes avec vous!
By Gary Kaltbaum- November 16,2015
garyk.com
@GaryKaltbaum
Fox News Business Contributor
Paris…nous sommes avec vous!
We have been specifically telling you in the past week that the good low we called for on October 2nd and the ensuing rally was getting narrower and narrower. In fact, it was getting so narrow and suspect to our eye, we timely wrote to you last Sunday that: “It is the same type of tape we had before the market tanked in August.”
So…after last week’s dumping, where do we stand?
Our proprietary scan of thousands of stocks show only about 3 out of 10 stocks in good shape. This number never got to 5 out of 10…which is pathetic considering the NDX was in new high ground while the Dow, S&P and NASDAQ were knocking on the door. Again, it has mostly been a big cap affair as small and mid-caps and the average stock completely under-performed the indices.
45 new yearly highs…a whopping 440 new yearly lows. Again, pathetic and telling you how weak the market has been underneath the surface.
Groups in good technical shape…a handful. Groups in poor technical shape…the rest. This has been ongoing while the markets rallied up. In last Sunday’s report, we listed the numerous areas that were still bearish, leading us to believe there was trouble ahead.
The groups that had been holding up now look to have topped on a near-term basis. In fact, we believe the parked money that was selling everything to buy up Amazon, Google, Facebook and a few other “nifty fifty-types names may be over as those names got too extended and were distributed hard on Friday. They still do have strong relative strength but…
There is a lot more we can say as advance-decline figures continue to have a series of negative divergences, bullishness has picked up and flat out, most of the market didn’t come close to the major indices.
The transports remain weak…in spite of plunging oil. Commodities remain weak. The NYSE remains weak.
Short-term wiggles aside, this market is back on the defensive and would respect it. Big, broad tops take a long time and we may just be in one.
A few other notes:
For months, you have been told a rate hike was in the offing. For months, we have told you no. We continue with our stance, doubly so if markets head south.
Pay no attention to the masses that say the market has to go higher in November and December. We are well aware of seasonal strength. We’ll let the market decide. Even if we get some sort of central bank-induced rally, we continue to believe it will be narrow and more than likely, just be putting off the inevitable.
Speaking of central banks, while we do not believe Mrs. Bubble will raise rates, we are 100 percent sure that Europe will extend their money printing as well as ramp up even more money printing. Maybe this juices the market during the holidays.
SHORTER-TERM, markets are oversold. If markets open up badly tomorrow because of the terror attacks, we suspect a low can be put in within a day or two. But that will not and does not change the overall picture that we have laid out for you.