Take Your Time and Pick Your Spots

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.

Since I am in a not-so-good mood, I figured I would take the time out to vent a little bit. I may have torn my brachial plexus which means I am sitting here in a sling...and in pain.

Just keep in mind that when I vent, I have only one goal in mind...and that is to help you...the trader and investor. In fact, all I try to do on my radio show as well as my Fox News Channel appearances is to help. I am not right all the time...I am not wrong all the time...but I will always have the best of intentions. My rant was going to be about some of the things I am seeing on Wall Street that I don't like...things that reminded me of some of the shenanigans that occurred prior to the 00-03 bear market...but something else came up that raised my ire...so will hold the rest for my next report.

Henry Blodget...yes Henry Blodget has written a book about investing. This is almost akin to Dr. Phil writing a book on how to lose weight. The title...get this..."The Wall Street Self-Defense Manual!" I have nothing against this man personally and yes, I believe in second chances. In fact, one of my favorite thoughts is that it is not what you do on the first try that counts...but what you do on the second and third try. I have had my own second chances. But...sorry...not Henry. Not Henry who slapped on STRONG BUY recommendations out to the public while telling his friends in emails that those companies were a "piece of crap!" Not Henry, the dude that made millions of dollars even though he couldn't find Mount Everest on a map. Not Henry, the dude who made tens of millions only to pay back $4 million in a fine. Can I sign up for that? Pay me nearly $20 million...screw the public...pay a $4 million fine...then get hired to contribute to Fortune, Newsweek and others...and WRITE A BOOK. The sick thing is that people will buy this book. I don't know what is in it...I don't care what is in it. This man is a creep who got lucky in a mania...who is barred from my industry for life but now gets to sell HIS piece of crap to that same industry.

As far as the market is concerned, I am just going to sound like a broken record. Until major indices break even short-term support and or moving averages, you must continue to give the market the bullish benefit of the doubt. And to add another positive, the lagging TRANSPORTS continue to play catch-up in a big way...moving to an all-time high. For weeks, this area had been lagging but no more as RAILS and TRUCKERS are smoking. Once again, we believe the talk of a recession and doom just ahead to be folly as there is no way the TRANSPORTS would be doing this before a recession occurs. The market remains the best forecaster.

The main issue is what to do with a market that is extended, overbought and becoming very bullish in sentiment. I say to take your time and pick your spots...as there are fewer and fewer sound bases to buy off of. This is not because the market is in bad shape but because many individual stocks remain extended from recent moves. Shorter-term, we could say the market is due to correct but the market had that chance a week or so ago when the BROKERS were breaking down while the NASDAQ and NDX were teetering. All have resolved themselves upwards as again, corrections remain affairs that last days...not even weeks. One day, this will change...here are those levels that would tell us potential problems could lie ahead...DOW 12500...S&P 1428 and NASDAQ 2450...all at the 50 day moving average. Until this report tells you it has occurred, it remains crazy to go overly bearish...and almost psychotic to short anything...as my friends who are nothing but short are almost closing shop.

Gary Kaltbaum