JUST LETTING YOU KNOW
As you the markets have been in corrective mode and they’ve been hit pretty hard. And when it comes to names getting hit, the market is starting to leave no stone unturned.
And it was one of those very rough days in the market today. But then something happened…the defense came it. Yesterday, on my radio show, I had outlined major support levels in the indices. Most of those support levels were breached today to the downside…during the day. At end of the day, most of those support levels taken back by price. This indicated defense in the market and that, maybe from here, in the near-term at least, the downside is limited.
Let me explain. What a market is going up and up and up on a strong up day, yet finishes close to the flatline or finishes down – that usually means that the buyers have been wiped out and sellers get the upper hand.
Today was the opposite. Though the market still finished down, the Dow today at one time was down 190 some odd points and yet it finished down only 76. The Nasdaq at one point today, was down 57 points, and it finished down only 11 on big volume.
This indicates defense, for now.
I don’t worry about why.
I don’t worry about whether the Fed decided to do something.
I don’t worry about “who.”
I worry about outcome.
And the outcome today was that the market has a chance to have a very bad down down. Now don’t get me wrong. There were a lot of stocks that were down a lot today. But then, there were a lot of stocks that came back today and showed some good defense.
So I’m going to call this day, a defense day, where the market had a chance to have a brutal downside day, but turned some of the way.
Let me be blunt and honest.
I have no clue.
And I don’t want to have a clue.
I want to play it by the book. I want to do my scans and know what the strongest names are. What names held up the best with the best earnings and that reacted well with the earnings.
I want to wait for a Follow-Through Day on the market that will tell me that maybe and potentially that the coast is clear. Notice the word “potentially.” I have this sneaking suspicion that this bad boy is going to get really touch.
So take your time.
Normally, I would tell you that today was a really good day and that the bleeding has been stashed. I can’t tell you that just yet. As I’ve been going through scans, it’s like a kid scribbling on a sheet of paper now. More and more names have broken and are out of the leadership category.
We’ll see what happens in the next few days.
I need some cards coming out of the deck.
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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.