JUST LETTING YOU KNOW
The stance remains the same. Listen up.
- Until the breakout that just occurred fails – you get the point. And the breakout occurred on the S&P on September 6th. Today, you saw some extra volume in a lot of stocks because it was quadruple witching. I believe a lot of it happened at the end of the day.
- On the fundamental side of the equation, we believe the markets are not going up for normal reasons. It has nothing to do with the economy that’s just muddling through, or employment numbers that are fake are worse than they tell us. Or the earnings growth and sales growth in the market which is really blah at this point in time. It has nothing to do with Europe which is still in recession. It has everything to do with the printing of money here, by Europe, by Japan, and easing in China and everywhere else. What the final outcome is going to be…we don’t know. We have a though on that, but that’s down the road.
For now this is good news and notwithstanding pullbacks – which could occur at any time – the markets in good stead.
Except…the Transports continue to act horribly. This is one area that is sticking out like a sore thumb. I would also avoid a bunch of the Semiconductors too. Transports have been mutilated in the rail stocks from Norfolk Southern’s bad numbers. You already know that the airlines have been affected by the higher oil prices.
To be repetitive, ignore the Dow Theory which is says that if the Transports are heading South, the market will eventually follow. Well so far the market has not followed.
And I do not want to ignore what is working, just because something else is not. If we start to see distribution (big volume selling), if we start to see leaders getting in trouble and things breaking down…we’ll let you know.
But so far, so good.
On the other end of the spectrum, the bull market in Housing stocks – is getting more bull. And that’s good. Very strong day today. Again…I own Housing stocks. I don’t own enough.
I really don’t have a lot of complaints except…you know you pick up today’s USAToday newspaper and they have an article about how the markets going up much higher this year. And they interview a few guys that are always bullish, never bearish…when market dropped 56% the stayed bullish all the way down…but they’re still quoted in the market today. So just be careful of that noise.
I don’t like see all that bullish talk. I don’t like bullish articles or bullish front covers. I don’t want to hear that we’re going to 25,000 on the Dow. I don’t want to hear anything.
Too much bullishness is not good. But I don’t think it’s off the charts.
So far the market is cooperating just fine.
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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.