JUST LETTING YOU KNOW
As you know, during my vacation, I went Italy, France and Greece. When I was in Greece. I spoke to about 15 people there and I let them know that I have a national radio show we talk about the economy, the markets, government, politics, taxes and the like.
I got some interesting answers to my questions on – “What’s going on there?”
Without being political, 90% of them said that they don’t trust their government, because their government made promises to them and now is not keeping them.
That’s what it came down to…that the government made promises to them that they are no longer keeping.
And I asked the next question carefully:
“But they’ve run out of money. Where are they going to get the money from?” I got some answers like:
I don’t care.
Oh, they have the money.
They need to start buckling down on people to pay taxes. (In case you don’t know, it’s very easy to evade taxes in Greece.)
But I found it quite interesting that most of the answers were the same. I will tell you that in the areas I went to, there were no riots and no protests. The tourism industry looked fabulous. I think there six cruise ships sitting outside of Santorini.
The only negative about the trip was that I pulled a muscle right before Paris. And for 2 ½ days my family went out and fun while I laid in bed.
As you know, I watch the Nasdaq the most and the Nasdaq was up one point since I left on vacation at the close of business on June 20. The market has done absolutely nothing since I left. But, actually, that not true. Because initially, the market got hit and the market came back up on that big gap to the upside on another “rescue” in Europe. Since left there’s been a lot of Jello moving on the plate, underneath the surface.
Commodities, oils, aluminum, copper, steel, metals, mining, construction mining…are still acting poorly and underperforming. So just completely stay away from that group.
Though…oil came off the floor and rallied up hard for two days. For me, oil prices were just stretched to the downside and they need to really up some. That’s all.
Semiconductors…I would stay away from them. If you look at the SOX, you will notice that twice in the past three weeks, it rallied up into the 200-day moving average and sold off hard both times, leaving it in its bearish phase which started back in March. Intel is on its 200-day moving average and just holding by its chinny chin chin.
The Financials…the day that the market gapped up on June 29 andthey rallied up for a couple days. But there’s still no leadership there. Wells Fargo looks okay, trading above its 50-day moving average. But after that, we’re not seeing much. In fact, if you look at JP Morgan, it rallied into the 50-day moving average and sold off. That’s the way a bear market stock acts.
I could go on and on.
Gold and Silver? Nothing going on there. My thesis on Gold continues to play out and I think there’s another 6 to 12 months of “blah” in Gold…which people get out of the Gold market because there only losing money. A break of 148 on the GLD (the ETF for Gold) and you’ll have a pretty darn good technical sell-off from there. And that’s why 148 held three times over the past 7 months. Silver – same thing.
Cloud stocks? I’d stay away from those. In fact, while I was gone, specifically on Friday, they just crushed them. Salesforce.com, F5 Network are dead on arrival. VM Ware, Citrix, Redhat, Rackspace – that whole group is a goner right now.
Technology? Not acting well. Software…really not acting well.
Dell, yuck. Hewlett Packard…holy smokes.
These are areas, I’d just stay away from.
Very mixed back in Healthcare, but drug stocks are strong. Go look at Merck in new high ground. Revenues up 1%. Bristol Myers, relatively strong. Pfizer, relatively strong. Glaxo, relatively strong. Are they leading? Not really. But versus that other stuff, quite out performing.
A lot of things happened while I was gone:
- The Supreme Court said the Healthcare Bill was okay.
- The President is calling to raise taxes. It’s amazing thing he’s doing that during an election year. It tells you what kind of election this is going to be.
- We did have a Follow-Through Day (FTD). The market gapped up on June 29 and finished up 277 that day. And the news that day was that there was another rescue in Europe. But it was for the banks. I was thinking to myself, “The rescue is now for the banks, and not the government?” So I think there’s less than meets the eye as far as that rescue is concerned. Remember, it’s been over two years that I’ve been talking on my radio show about “the rescue.” Two years ago, Greece was saved. And now two years later Spain now has 25% unemployment and they’re in a depression. Italy and Portugal have issues. There’s a lot of places that have issues. So I’m not so sure we’re out of the woods there.
- Another anemic employment number came out.
- Our deficits continue to get ever bigger and nobody’s doing anything about it.
P.S. I ate more pasta and pizza over the past two weeks, than I have over the past three to five years, but I lost a pound on a half on trip.
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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.