The Fed Cut, But Can the Markets Save Themselves?

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.

FOX BUSINESS NETWORK OCTOBER 15TH

That Iranian terrorist dude answering questions at Columbia University...he actually had the same look on his face that Paris Hilton had when asked by Larry King what passage from the Bible she liked the most. I have had nothing good to say about Columbia and had nothing good to say about President Lee Bollinger...but that was one heck of a public dressing down...and well-deserved. This Iranian puke should have been arrested when he stepped foot on our soil.

Forget talking about the "market." I am paying very little attention to the major indices right now. I am giving most of my attention to the continuing 2 way tape here. It doesn't matter what the "market" does because:

When the market goes up, it is led by the same areas I have been yelping about for a while. This includes OILS, COMMODITIES, SHIPPERS, FERTILIZERS, CHINA, INTERNET, GAMING, GOLD/SILVER and now add in the SOLARS. There also continues to be a slew of growth names previously mentioned in these columns. Some are going parabolic.

When the market goes down,it continues to be led by the long list of sectors I have been bearish on for quite a while. This includes HOUSING(which continues its "give-up" phase. I continue to expect one or more publicly traded names to disappear), most RETAIL, LENDERS, AIRLINES, RAILS, AIR FREIGHT, TRUCKERS, MONEY CENTER BANKS, REGIONAL BANKS, S&LS, BROKERS, SEMIS, HOTELS, RESTAURANTS, DRUGS. All this with markets near old highs. It is also important you measure how much these areas underperform when the market goes up. They seem to have no leadership qualities whatsoever.

On top of that, large caps continue to lead while small and mid-caps continue to lag. Again, a quick glance of the NDX versus the RUSSELL shows this divergence.

Very simply, this is the mother of 2-way tapes. I believe it is going to continue that way. I believe the good may get gooder and the bad may get badder. Pay less attention to what the DOW does and more attention what is underneath the hood...and do not think for a minute that the curveballs are over. The FED may have done its thing to save the markets...but the market will still have to deal with some serious issues in the real world.

Gary Kaltbaum