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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
A big shout out and get well to my dad who is back in the hospital for the third time in the past couple of months. I think watching Eli Manning caused the problem this time.
You don't need me to tell you what has happened since the beginning of the year...so I won't. The only thing I want to tell you is that things are now very stretched. That's all. When things get stretched, risk picks up in the near-term. The last time I was thinking this way, it was end of November/early December. The market then went through a correction of a few weeks and a few percentage points...stopping and rallying right off the 50-day moving average. The good news was that it ended up being a normal correction off of extended conditions. Markets always revert back to moving averages after a period of time...whether they are bouncing after a drop or pulling back after a rally.
Currently, the NASDAQ 100 is at 1747 with the 50 day moving average at 1680.
Currently, the NASDAQ is at 2316 with the 50 day moving average at 2238.
Currently, the SOX is at 529 with the 50 day moving average at 485.
I have seen times where the markets have been a little more stretched than this...but not much. I am just saying I suspect we have some corrective work to do as we enter into earnings season...and that started yesterday. Markets will either make a right turn and stall...letting the moving averages catch up over the next few weeks or they will start pulling back into them.
This in itself does not change the playing field. The latest move has been more than impressive...and in yesterday's pullback, I found very little damage being done. The OILS reversed down on volume but remain in bull mode...and big-cap BIOTECHS have topped...but that's about it. Just letting you know pullbacks are a normal course of business in the market. Sometimes, you have to let the market come to you. I know it is not easy but you have to keep your emotions in check when things do get too extended. It is something I have to work on every day.
And don't get me started about the DOW being back under 11,000.
Gary
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