The Market, As Is

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.

GO GIANTS!

On January 24th, I penned these words:

"I must make note that leading in the past two days has been RETAIL, HOUSING, TRANSPORTS and FINANCIALS. These areas have been the worst bear market areas. I am not so sure the worst areas can lead for a very long time...but will give them every chance. HOUSING looks like it broke a pretty decent downtrend in spite of all the ugly news. Keep in mind, HOUSING is still down 50% in the past year even with this move.

"Little did I know that these areas would rip to the upside. I gather they became so underowned ,that the slightest momentum would get them going. I have seen nothing to derail the move in these areas so far. I have little clue as to how long the moves last or how far they go. Just a big thank you to the Fed if you own these areas."

By definition, Thursday was a follow through day as the NASDAQ and NDX were both up over 1.75% on heavier volume. BUT...and a big BUT...is that IBD said it was not ...and that is good enough for me. The last 2 times I argued with them, they won...I lost. I believe they are seeing what I am seeing...and that is a clear lack of leadership, a clear lack of bases and major longer-term tops in place in so many areas. Keep in mind, nothing would have changed even if there was a follow through day called. The other part of the equation is whether leading stocks are setting up and breaking out...and on volume. I can count the names on one hand.

So patience. I have a sneaking suspicion we have not heard the last of the crazy action we have been seeing on a daily basis. I remain absolutely amazed at the constant daily reversals which have driven everyone up the world. I have stayed out of the carnage with a probe here and there. Until the market really shows me great set ups, I am taking my time.

LATE BREAKING NEWS

Yesterday, on my radio show, I said YAHOO had to be bought as their name and business were heading south. But I also said I did not think the price would be at a premium. This morning, MICROSOFT is in a bid to buy YAHOO for about $31. THEY ARE NUTS! Why pay up so much for a declining business with a declining stock? When all is said and done, I believe this will go down as a waste of money. If I was running MICROSOFT, I would have waited as this was a stock heading into the low to mid-single digits and at the very most , would have offered maybe a 10% premium to the market price. I do not know what MICROSOFT is thinking. I am sure the talking heads will say this is a wonderful deal...as they say that for every day. Remember AOL/TWX.

Gary Kaltbaum