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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.
Happily, the 12 week trading range I have been writing about is slowly resolving itself to the upside as resistance levels, I have mentioned previously, have been taken out. More and more stocks are now breaking above their 50-day average...and more and more stocks are coming up the right side of bases. This is a start. It must continue. Not everything is perfect but this market is really starting to remind me of 1975.
In late '74, tons of bad news came out culminating with a horrible jobs number. But in December of '74, the market bottomed off the 1973-74 nausea and had a good year.
Now...you know me better. I will continue to watch the day to day action and if distribution shows up, if stocks break back below moving averages, I will adjust. It just seems to me the news being reported is about as dire as dire can be. We saw none of this at the tops. The DOW/S&P/NASDAQ have now all edged above the 50-day average and will need to hold. Short-term, markets are overbought...so maybe pullback time soon...but the charts are shaping up.
Sector-wise:
COMMODITIES are also coming off their crash lows as they held support and started moving above first resistance. It is of my opinion that no rally can happen without COMMODITIES but time will tell.
CHINA seems to be the leading COUNTRY again as it moved above its 50-day moving average first. COMMODITY countries also are getting the bid here.
BIOTECH looks to be the strongest group here as MYGN,CEPH,AMGN and a few others are either breaking out or close to it. Their bases may need to form a little more but so far, providing great relative strength.
The more and more names that break above the 50...the more and more names that start to break out...and the ability for the market to continue higher in the face of overbought conditions are all a good thing. Just keep in mind, markets are a process, not an event as some make you believe. I do recognize volume has been light on this recent move up...but there seems to be a clear lack of selling here.
Earnings will be coming out in droves soon...and it will be important to see the reactions. We already know the numbers are supposedly not supposed to be good...watch the market.
Lastly, please pay zero attention to the talk of AS THE FIRST 5 DAYS OF JANUARY GOES, THE MARKET GOES. This is nonsense.
Disclaimer: The opinions expressed herein 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.
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