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Gary Kaltbaum Intraday Breaking Setups
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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. If you would like a free trial to Gary's Daily Market Alerts click here. 888-484-8220 ext. 1
I do not have many complaints about last week's action...but I do have some things you should know.
Near-term, markets "feel" overbought and extended. All this means is at best, I believe the market may hit a wall for this second. It does not mean the market will even pull back. This would not be a negative. It feels like the market used up a lot of gas last week and may be time for a little refueling.
Technically, there are a few things I like.
RETAILERS, for the most part, are turning the corner. Most RETAILERS report earnings in the next 2 weeks, so things can change. I am just seeing many names turn up and start to move up their right side. This is a key group that brought the market down when we called the top on in early August.
OIL STOCKS are doing the opposite. I believe OIL STOCKS continue to act toppy and should be avoided. At best, they are going to continue to go through a period of consolidation. Near-term, they feel lower.
HOUSING is trying to turn the corner. There are stronger names like (BZH | Quote | Chart | News | PowerRating) and (CTX | Quote | Chart | News | PowerRating) and weaker names like (TOL | Quote | Chart | News | PowerRating) and (HOV | Quote | Chart | News | PowerRating). I believe they will attempt to move up their right side. Just keep in mind, this is probably the group in the latest stage of its move.
The SOX action has been amazing. I have never seen a group in such poor technical shape ramp up with the rest. This happens 1 out of 50 times. There are still a ton of ugly names in this group and should be stepped on lightly. It is now bumping into massive overhead resistance in the 450-460 area.
The NDX has come straight up. It is outperforming the NASDAQ. I would love to see light volume pullbacks and then a breakout to new highs.
The TRANSPORTS hit all-time highs on Wednesday's breakout. I don't think I need to say more. A couple of names have actually gone parabolic...(CHRWD | Quote | Chart | News | PowerRating) and (EXPD | Quote | Chart | News | PowerRating). You would think they will rest somewhere in here.
Lastly, everyone I speak to is saying interest rates are going higher form here...everyone! Do I hear a near-term bond market rally?
On the not-so-good front:
Only about 50% of all stocks are in good shape. This could come back to haunt the market down the road. Even if major indices do break out, fewer and fewer stocks are working. Only time will tell.
The NEW HIGH LIST has expanded but not even close to where it was the last time major indices were sitting at this level...another potential negative divergence.
All in all, the bulls get the benefit here. Volume patterns in the market are much better and the buying pressure we have been seeing has been on the powerful side. Never argue with a follow-through day. The Oct 19th move has been speaking volumes.
Gary Kaltbaum
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