Short notes on markets and stuff!

Why is it when Republicans vote for somebody they are deemed to be angry but when Democrats vote for somebody they are deemed to be intellectual and reasoned? Just saying!

Also, needed to point out the establishment still does not get it. We still have a long way to go but the establishment had better realize it is still the people who do the voting. You can parade out anyone you want to say anything they want but the voting public matters most.

Back to the markets:

We are being bombarded with emails not asking…but telling us the bear market is about to show its ugly face again. Ok…we got you!

Our thoughts remain the same. We are in rally mode but are massively overbought. We are in rally mode but instead of the bears paraded out, the bulls are full of themselves again.  We are in the 4th week of rally mode.

Leave no doubt that commodities are driving the bus right now. Commodities up…markets up. Commodities down…markets down. Leave no doubt that the under-performance over the past 12-18 months of the small and mid-caps were directly because of commodities. It is no coincidence that small and mid-caps have been leading as commodities bottomed. Yesterday, commodities backed off hard…small and mid-caps backed off hard. We are perplexed that so many say oil and commodities are going to go right back to their lows and even more. Do they not think a 70%-plus drop in oil prices could be it for its bear market?

We believe it gets tougher here as major indices are up and into massive overhead resistance. Leadership remains defensive as the new yearly high list is small and is laden with utilities, food, beverages, tobacco and the like. The best of the move has been areas that had been trashed over the past 12-18 months.

Could the bear market, bear trend, bearish phase be over? Could our call on Feb 11-12 of a low be THE low? Anything is possible. Just remember, China is buying up their stock market, Japan is printing and promising more, Europe is printing and promising more, the UK is printing money, negative rates are becoming more common and 0% pervades the globe…and Sweden is even printing money. Easy money continues to slosh around…and when that continues, again, anything is possible. We are just comfortable in knowing our studies of turns in markets picked up on the extreme bearishness and the massively oversold conditions on Feb 11-12 and we now look for the next big clue! The last good rally back in October lasted about 4 weeks, topped out for a few more weeks leading to the next wrecking of the market. This time?

Gary Kaltbaum