JUST LETTING YOU KNOW
Today was another pullback day. But let me give you some good news:
- Volume was light.
- The Market needs to sit. You had the first day of the new year gap open off of the Fiscal Stiff news and, of course, the markets were getting into trouble into last week. And then on Monday, New Years Eve day, there was a story that they were getting the deal done…and that’s when the market started drifting up. It finished up strong on Monday. Then, the big gap on Wednesday. Since that big gap, basically things have been sitting.
- As I look at the Nasdaq, it’s basically sitting. The Nasdaq today was down 22 at one time, but came back, so it’s sitting in this little range.
- The Nasdaq-100, about the same – with a little pullback filling the gap a little bit.
- The Dow was down about 90 and filled in the gap a wee bit more.
- The S&P, a little pullback, no biggie.
- The NYSE, which is in new high ground, same thing. Just sitting tight.
- Russell 2000, same thing.
I know the Dow dropped 50 and dropped another 50 today. But I’m just letting you know that that’s normal. It reminds me of a market that, in a near-term basis is just a little pooped out and maybe just need to sit a little bit. But that’s all it reminds me of.
And frankly I’m not so sure we’re going to get bigger pullbacks. I’ve already done my scans today and the same areas that are relatively weak remain. The job here is one-fold for the next few weeks.
Earnings are going to come out in droves over the next few weeks. The job will be to identify those companies that have the strongest earnings and revenue growth, possibly the biggest surprises, and most importantly – a strong reaction.
Maybe we’ll find some breakaway gaps where stocks put in a base and it breaks out on a big gap. That’s what’s we’ll be looking for.
There’s been all this talk, as well as from myself, about how the 3rd quarter earnings and sales were not very good.
We’ll find out about the 4th. It was the holiday 4th quarter. We had hurricane Sandy. I think the market will bypass any talk of Sandy holding numbers back as that is an event and the market is a forward-looking mechanism.
The emails I mostly get and questions on “How is the market up?”
And I always answer the same: The Fed’s printing a trillion bucks a year.
Do you know what a trillion is? That’s 40% of our government spending.
A trillion, not attached to anything.
Europe…in the range of a half to a trillion.
All while we’re not in a Depression.
One would think we’re in the great Depression, like in the 1930’s, where we would see the things we’re seeing.
But no. They are trying to create an asset bubble.
And we’ll see if it continues to work.
For all the money that has been spent, we’re still where we were 13 years ago. And in the case of the Nasdaq and Nasdaq-100, still down 40%, if not more, from the highs.
The other question is: “Gary, what’s going to happen when they stop printing money?”
I don’t know except to say the one thing they better keep control of is interest rates. And we’ll how it plays out. If I’m the Fed, I don’t start announcing when I’m trying to lop off some of the bonds, mortgage securities as well as Treasuries. I don’t tell anybody. I just slowly, but surely do it. But I know how you get the “you know what” back into the Goose when it totals $3 trillion. That’s a lot of cake.
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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.