JUST LETTING YOU KNOW
Some Good News on Today’s Action
The Dow was up 136 today. The only weakness was in Walmart, which is kinda sorta breaking down on a near-term basis in the Dow.
I thought we’d come back strong yesterday because Europe and Asia were actually strong coming in and I was wondering “Why weren’t we strong yesterday?” I guess the market had it in store today.
A few things:
- On the show yesterday, I had said that we’re still in a corrective mode, but as long as the XLF…it’s just Financials…and the IYF held the 50-day moving average and did not go down from here, I didn’t think it could get much worse.
- The XLF and IYF, like troopers, held the 50-day moving average well today. And that was muy importante today. Why? Remember the thought process. Not much bad happens if financial stocks are doing well. They are an important cog in the wheel for obvious reasons.
- On top of that the Semis. I just need to say this: I don’t why, but the Semiconductor numbers – the earnings and sales growth – are terrible. Just letting you know. If you look at the SOX you will see a near-term turn to the upside. The SOX has been an anchor on the Nasdaq and the Nasdaq-100. It can possibly help at this point in time.
- We’re past earning season. The numbers were not good. But hey we’ve got a Fed printing $40 billion bucks a month in QE3 as well as that Operation Twist. There’s nothing off the table. As have told you, when money is created out thin air to chase a fixed amount of assets, assets usually go up in price.
- On top of this, the Commodities and Commodity Countries. I have told you in the recent past that foreign markets have been acting better than us. They got some juice today. So the metals, mining, steel, copper, aluminum, construction, mining, oils (to a little bit of a lesser extent) – all had very strong day. When you have a chance, look at the XME. It’s the metals and mining ETF. Go look how it’s ridden up the 50-day moving average off the lows since late-August. And recently, it really tagged on several occasions and has held it every time. That’s potentially good news. Why? Commodities are 20% to 30% of the market. I think oils are like 20% themselves. So that’s good news.
- Major indices. I can be quite definitive in my statements here. The Dow at around 12,977, up to 13,000 which is right at the 200-day moving average. The S&P 500 at 1400, the Nasdaq at around 2960ish, the Nasdaq-100 at about 2660 – all vital support levels that held today. Some were right at the long-term 200-day moving average. Others in between.
As long as the financials and those numbers that I gave you hold, the markets are out of trouble for this second.
The markets have been correcting for about seven weeks. During that correction, you’ve had bounces and bounces failed miserably, heading into lower prices. I am just saying that today, we found another area of near-term support that may or may not be broken. The all-important Nasdaq is holding the 200-day average – not good news. We want these things to hold the 50-day moving average. That’s a bullish thing. Bouncing off the 200-day moving average is kinda normal the first time down.
As long as the support levels hold, the market has a chance to get going again.
If they break, it is going to be bad news. The fact that the financial started to get into gear today, is mighty helpful.
In Growth Stock land, it’s not very pretty. On a day like today, you would expect an Apple to be up 20 points. It was hardly up. Amazon was down. It’s not great out there. Growth land has become barren. But the market for stuff is acting better here and we’ll see how that plays out.
Housing has held the 50-day. A lot of the construction stocks did well. The XHB actually broke out into new high ground. That’s the Home Depot, Lowes and homebuilders and a few others. That’s putting in a news base above the ascending 50-day.
So I just wanted to make the point today about some of the major averages and some of these muy importante area. Are we out of the woods? I don’t know. We can rally up for a few days and then go toast. And, of course, on Tuesday we have the election and maybe the market moves on that.
What I do know is we’re entering a seasonal good time. The Fed’s still printing billions and billions and billions. Europe is now printing billions and billions and billions. And I think it’s something that has to be thought about and watched. And the fact that the Nasdaq and Nasdaq-100 held the 200-day today – I have to give it some credence.
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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.