Pullback Time?

Gary Kaltbaum is an investment adviser 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.

A few comments before I get into the market.

CNN is now VNN... Vulgar News Network. I cannot believe they took what amounted to good Americans who just wanted to voice their opinion and tried to turn it into a joke. I cannot believe that some of their reporters treated ordinary Americans like dirt... and live on air. I cannot believe they were so vulgar. This speaks volumes. The elitist, biased mainstream media continues to be scary. They have license to attack anyone they like and license to kiss up to anyone they like. I did not see this network act like this when maniacs were throwing rocks and lighting fires in protest. I did not see anything like this when good Americans voiced their opinions about the war in Iraq. CNN should be ashamed of themselves. In fact, just about all the mainstream media should go back to journalism school. I have news for them: they had better not underestimate Americans and their voice. It is not extreme to be upset about trillions of dollars being spent on pet projects and on criminal financial companies... that goes for this administration and the last. The same goes for MSNBC but at least they don't try to hide their bias. They have already changed their name to BONBC.

Speaking of the media... why aren't they railing against the Napolitano Homeland Security report putting our great veterans into a bad light?

Hugo Chavez is a puke. I am in hopes President Obama washed his hands right after shaking with this slimebag who is destroying his own country. This man is not just a socialist. He is a dictator and getting worse by the day.

Raise your hand if you believe the financials being reported from the financial companies!

Speaking of Financials, House Speaker Nancy Pelosi is saying that the American people are demanding "discipline and accountability" and promised to create a legislative commission with broad oversight to investigate the causes of Wall Street irregularities and their full costs to taxpayers. Terrific. I like a good investigation. But while you are at it... and I guess this is wishful thinking, how about some indictments Madame Speaker? How about a few perp walks? And after you are done with that, how about a commission on the accountability of all of Washington DC? Washington DC, after all, makes AIG look like a walk in the park these days.

Ok... the market is overdue, way overdue for a pullback as any pullbacks so far, have lasted one or two days. I think we are getting close to a pullback as markets are overbought... but I could have said that last week...and the week before. Remember, overbought can also be a good thing as overbought also means the market has been strong. But pullbacks are the trees. The overall market is the forest and for me and the overall market has improved. I am seeing a plethora of names and sectors coming up their right side. I am seeing low-level and mid-level bases breaking out and I am seeing nascent leadership show up in CHINESE names, RESTAURANTS, RETAIL and other CONSUMER areas. I am seeing COMMODITIES come off the lows. I am seeing HOMEBUILDERS, yes I said that... come up the right side. This is all good but in the near-term, I just think this whole market needs to pull back first. I am hoping for pullbacks back towards the 50-day average which would be S&P 800 AND dow 7500. Any pullback should be controlled and rotational right now as extended stuff pulls in and new names come to the fore.

I am seeing many people NOT believe this market because of 20 months of nausea. I am seeing the disbelief because nobody believes the economy will get better. I have news for them. The market and the economy are always in a state of flux and you had better put your bias away. It is not easy but it is a must. I had been bearish until March 12th when the market experienced another follow through day. This did not mean the market would turn... but as I have told you for years, it is the one characteristic that ALWAYS shows before the market turns. I have no idea how long this move lasts or how far it goes... and frankly, I don't need to know. The market will show topping signs before it turns back down. Until those signs occur, you must stay in lockstep with the market. You must ignore bad news and you must get tunnel vision as to WHAT IS HAPPENING. It is not easy... even for me who stayed out of the bear. From my studies, typically, bullish rallies in secular bear markets can go up 50-75% and last up to 9-12 months. Keep in mind, a 50% move only takes us back just under 10,000. That's how much damage was done.

Watch GOLD here. No one is talking about GOLD now after everyone was talking about it weeks ago. GOLD is sitting right on its 200-day average where it would be normal to bounce. As far as the economy, I am definitely seeing signs of stability but I am still not seeing anything that resembles positive momentum. But hey, stability is a good thing after everything we have seen. I expect better numbers on the job front in the months ahead as unemployment will stabilize and hopefully, jobs will start to be created again. After all, zero percent interest rates and $12 trillion should do the job. Right?

Disclaimer: The opinions expressed here in are those of the writer and may not reflect those of Wunderlich Securities,Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.