JUST LETTING YOU KNOW…

Today was a very good day in the market.

Yesterday, I said the market’s looking a little tired here and maybe it’s gonna pull back. Well, the Dow was down 74 today. Pullback? Gary doesn’t think so. That was a fake number. All they did today was sell off all the Dow stocks.

And you know what they did? They were buying growth. You know I’ve been complaining and whining that growth has done much. But they got some sort of a bid today. Get me a good three months of “growth stock land” and I’m a happy guy.

So pay no attention to the Dow today. It is meaningless. For me, it was actually a bullish day in the market today…not bearish. I pay little attention to the Dow. If the Dow’s down 74 but Nasdaq’s up 11 and the Advance/Decline line at 2:1 to the positive…that’s what I need to know. That’s my take.

Next week, there’s gonna be a lot of earnings coming next week. I think around a thousand names. Now we get to add this Facebook IPO. And we’ll see.

As long as major averages stay above the now rising 50-day moving average…when the pull back into them, they hold…ALL GOOD.

My complaint here? Everybody’s bullish. I’ve been telling you the past few days that sentiment is now off the charts. Just to give you a clue what that means. When everybody is bearish, there’s nobody left to sell and the market can’t go any lower. Conversely, when everybody’s bullish and everybody is all-in with their money, there’s nobody left to buy. So we watch these extremes. And we have our quirky measurements, such as the types of emails we get. But we follow the newsletter writers which are notoriously bad…and they’re now ridiculously bullish. There’s hardly any bears. There’s also this “American Association of Individual Investors.” Everybody’s bullish. There’s hardly any bears. We also watch options…a lot of call buying. I’m not a big VIX guy, but the VIX is stretched to the downside.

Also I’m saying is that, the conditions on a sentiment basis are something to watch. Sentiment is not a primary indicator. It is secondary. We watch price and volume first. We just stick that sentiment into the “file manager.”

There’s also something called the relative strength index. It is now exactly where it was, the last two times we had some pretty good tops and entered some pretty good pullbacks. Does that mean the same thing happens this time? No it doesn’t.

We just follow the bouncing ball. It is the sum of the parts that we follow. There’s not just one thing we look at. Just want to keep in you in the loop on that.

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.