JUST LETTING YOU KNOW
Every time Gold has an up day, I get tons of emails asking:
“Should I buy it now?”
I received two phone calls in my office today from listeners to my radio show.
“What do you think about Gold here?”
And one of them got mad at me when I said, “I don’t know, what do you think?”
I’m not putting these people down. They’re interested parties. They want to make money. That’s all good. But study the technical of how things work in the marketplace. Certain things have to happen before a major move can ensue.
I don’t think Gold starts the next bull phase until that stops. There’s an anxiousness on every up day in Gold. Just remember a few things:
- You cannot have a bull market if something is trading below the 50-day moving average. And Gold continues trade below there.
- There are too many bulls on Gold. And even though we’re at the point now where Gold has done nothing since September of 2011, there’s still this anxiousness.
- All we’re deal with is precedence. All bull markets end some kind of climatic move.
I’ve been asked if the move into August 2011 was climatic and my answer is, I don’t think so. Typically a climatic move will go straight up and straight down. And all Gold has done is corrected here…and nominally.
So just be patient. As I have told you, if Gold going to have a climatic move that ends this 12-year move, I plan on having a significant amount of assets in it.
In 1979-80, the last move was four-fold within a year and the final move was a double in weeks. That’s a climatic move. I don’t think we’re there yet.
Apple (AAPL) was laboring all day and the Nasdaq was down 1 or 2. There was a little announcement out of Asia that the guy from Apple said, were not doing a cheap iPhone. Apple when down 3 to up 7 before you could say boo. That was good for about 18 Nasdaq points. It’s quite amazing the control that Apple has on the Nasdaq and the Nasdaq-100…16% of the Nasdaq-100 I am told. That’s silly. It shouldn’t, especially if something gets hit hard. And you never want to have a lagging index. Again, whether Apple goes up or down from here, they need to fix that up.
A Few Things That Should Be Noted
- The Euro (FXE). You had a good gap up and a follow-through today. A move above 132.03 would be real nice for the EURO.
- At the same time, you have the Dollar Index (UUP). You’ll notice something quite simplistic. November 16 was the last relative high and the Dollar swooned. That was the day the market bottomed. Do I need to go further on what’s going on? The market bottomed back in June also and I believe the ultimate bottom was on June 4. You’ll see that about May 31st was when the Dollar topped, dropped, rallied back to marginal high, and they gapped it down quick and that was it. Pretty darn good correlation between a week Dollar and the markets. And if the UUP breaks to 2157, there’s a decent way down.
- As for as the market is concerned, I’m just reporting this to you. During about 5 or 6 days of sitting around following a big gap to the upside on first day of this year, sellers refused to show up in a meaningful fashion in the major indices – even after a move up off the gap. Potentially, this is a bullish sign. Today the S&P edged above that little resistance and we are a closing high going back to last year on the S&P.
- The Dow basically did the same thing. The Dow has to deal with a little bit of resistance at 13,661. Keep in mind IBM has been a problem for the Dow. IBM has been the most important stock for the Dow price.
- The Nasdaq edged above the last few days, not by much.
- The Nasdaq-100, not there yet.
- And, of course, the Russell 2000 is already in new high ground over the last year. It was laboring a little today, but it has been leading.
- The NYSE had another good day today. It moved above the past few days.
- As of this second, Foreign markets remain in gear. Typically in bullish phases, they will outperform our markets. But, of course, in bearish phases, they will underperform our markets because they’re smaller markets with higher beta…and will just move quicker, both up and down.
How long this lasts, I don’t know. But after that breakout in some of the major indices out of 2-year ranges off that gap on the Fiscal Cliff deal – a lot of economical sensitive areas are going well.
Typically, when that occurs, it means the economies are improving across the globe. That would be great to see.
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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.