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.

Short but sweet to not confuse the issue! 

Markets do not just top in a day, but they do give warning shots. Warning shots come just about the same way every time... with distribution and with leaders hitting a wall. This does not occur once, but multiple times before a market totally gags. For me, yesterday was just that... the first warning shot. I have seen distribution in past weeks but the leaders were fine. But yesterday, the market started coming after the leaders. HALF FULL - it may just be nothing more than pulling in the leaders... because they have had a good move. HALF EMPTY - it is the start of something more. I do not know which it is. 

I do have a couple of issues here. Markets had been wedging up on unimpressive volume and the logical spot to hit a wall was near the 200 day. The DOW hit the brick wall right there. Other major indices have only hit the 150-day average. I do not guess here. I watch...and let the market tell me. If we start to see more distribution... if we start to see leaders puke... if the all-important FINANCIALS, RETAIL and SEMIS roll over, then we will be talking. I mention those three because they have been and remain the lagging groups. They would have to crap out to tell me the market is losing areas that have helped the market off the lows. Then, watch the COMMODITIES. These areas which I have talked incessantly, continue to lead. The market will not buckle until they buckle. You know the groups... STEEL, STEEL, and more STEEL, METALS - ORES, and of course, the OILS. Nevertheless, this will continue to be a very tough proposition both physically and emotionally. Take your time. 

Lastly, I ask myself the question; why are the CEOs of the major financial firms as well as Uncle Hank now coming out to tell everyone that the worst is over for the credit crisis? I must say this unnerves me because these are the same people that said there was not a problem in the first place. These are the same people who delayed admitting their problems late in the game after first hiding them and lying about.

Are they now telling the truth or are they trying to talk the markets up again? These dudes just scare the heck out of me.