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.
In the week leading up to September 1, I thought the market was getting into some near-term trouble. Then September 1st hit with a huge volume drop. Several distribution days combined with September 1 should have started a correction...but nope. Instead, many areas held support with the market having another ramp up to new highs...leaving the bears and the shorts again scratching their heads. For me, there is one bottom line...in bull phases, surprises happen to the upside...so surprise. Just about everything is in gear. I can only find a few bearish areas...the dollar, retail-auto parts, schools. Everything else is in a certain stage of bullish action with the lagging commodities the latest to move. So after this latest move, let's pick a few things apart:
The market is again near-term stretched, overbought and any other term you may use to describe this action...so don't be surprised to get some pulling in. But any pullback would not change the big picture...and that is the market is in shape. Overall, market looks great. Shorter-term, would love any pullback...but continue to watch how pullbacks are fleeting and if you are not buying in the first day of a turn, you miss out.
Let's break it apart.
AIRLINES now moving up right side on volume...any light volume pullback is buyable.
AIR FREIGHT popped on earnings...any light volume pullbacks are buyable.
With those 2 areas as well as RAILS teasing breakouts, the TRANSPORTS had a big day Friday coming up right side. As an index, can be looked at on any pullback.
OIL STOCKS were up Friday on news...but OIL PRICES plunged. This has to be watched because if OIL PRICES keep dropping, not sure OIL STOCKS can go much further. OILS have very good charts.
COAL stocks are breaking above multi-month resistance.
FINANCIALS are basing after recent move but a bunch have not recovered from the September 1 ugly day...on a daily chart, many have now poor volume patterns but one good day could change that...and any name can be looked at breaking above resistance.
GOLD is on the verge of a major 19 month breakout of a longer term base on base formation. Probably needs a pullback first...but the major set up is there to occur. The longer the base, typically, the bigger the move.
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