Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show "Investors Edge" on over 50 radio stations. Gary is also editor and publisher of "Gary Kaltbaum's Trendwatch"... a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary's Daily Market Alerts click here or call 888.484.8220 ext. 1.
I am heartened that so many agreed with me about everything I have been saying in this report, on radio and on my tv appearances. This administration and leadership campaigned down the middle and then immediately showed exactly who they are: way way way left, anti-business, pro-government, high tax, class warfareites. If they cannot learn a lesson from losing Ted Kennedy's seat in Massachusetts... then they will never learn.
Americans do not like their intelligence insulted. Unfortunately, or maybe fortunately, many have still not learned as the president just took it up a notch with his "us against them" rhetoric. I have news for this president and anyone who continues this route... IT AIN'T GOING TO WORK.
The market has topped for the near-term and probably the intermediate-term. For me, intermediate means up to a quarter. We'll know in time if it is longer than that. Many are blaming President Obama's numbskullish rhetoric against the banks for causing this. To be clear, that did not help... but the market was topping anyhow. President Obama just gave the market an excuse to move lower immediately. Already, the market may be a little oversold but instead of buying pullbacks, it is time to sell bounces.
I have no idea of the duration of this correction nor price. One can only look for signs that the selling is abating and buyers are getting the upper hand again. My guess is that we will get a lot of up/down action but eventually visit the longer-term 200-day average... which is quite normal for an intermediate correction. Currently, that moving average is about 7-10% below where markets sit right now. I do not believe this is just a few days' phenomenon but of course, we all know that with markets, anything can happen.
The DOW, S&P, NASDAQ, NDX, TRANSPORTS all sliced through the all-important 50-day average though the NASDAQ and NDX are just a smidgen below. In the past three days, over 1700 stocks broke below the 50-day... many which had not breached this area all the way up. Stocks lead indices.
EMERGING MARKETS broke below the 50-day.
Leading foreign countries like BRAZIL and CHINA have rolled over.
FINANCIALS (thank you Barack) have completely broke down. Does this man know these companies have shareholders and employees?
The SOX is almost in "freefall" slicing easily through the 50-day. The SOX has been a leading area since the 90s and always needs to be watched.
Companies are reporting good numbers but still selling off.
I can go on and on but you get the hint. The market is being distributed here... amazingly following the January 4, 2010 template I outlined for you in past reports. In fact, in my last report, I stated the market was still acting fine BUT:
"I can leave it at that but can't. Just recognize the market is 10 months along off the lows without an intermediate correction. Just recognize the last time I saw a market like this, it was January of 04... in where the market started a good correction. Maybe it is meaningless but it is uncanny comparing the bottom in 09 to the bottom in 03... so I watch. Also, bullishness measured by put/calls as well as surveys, is moving into extreme territory. So I watch. But as of this second, I do not have much to complain about."
Going to be an interesting 2010.
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we can not assure its accuracy or completeness. Neither the information or 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.
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