This Had Better Work!

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.

So... "Helicopter Ben" and "Tax Tim" really... I say really mean business. I only have a couple of thoughts. Ok... I have a thousand thoughts but will only mention a couple.

If Uncle Ben really believed as he said that the economy would get better within another 6-9 months, then why would he have to print another trillion dollars? Hmmm! Anyone think of that? What does this man know? Then again, this is the man who couldn't find the Atlantic Ocean on a map. One trillion dollars... just let that roll off your tongue. This is a big matzo ball Uncle Ben. What if another trillion still doesn't work?

So, Tim comes out, finally, with a big bank rescue. Another big hmmmm! Isn't this exactly what Uncle Hank proposed in the first place? You all remember the SIV thing? I do! So... the Gambinos and the Gottis get to have their toxic assets taken off their books. Terrific. Supposedly, private capital will be drawn in because of government (tax payer) guarantees. Maybe I am crazy but isn't this exactly the thing that caused the S&L debacle of many years ago? Let's see here... very little capital, government backing... yup... all we need now is Charles Keating and friends to take part in the party. Bottom line for me...more insanity where government is simply going to create wealth for some while screwing others. This is government skewing the markets by guaranteeing some things while not guaranteeing other things. Why do I think this is going to end up very messy? I hope I am wrong.

So... we head into Monday where futures are smoking. The bulls, as usual, are snorting.

I can go half full or half empty here. I am not one to force my thoughts on the market, especially when it is in what I call no man's land and doubly because we all have to deal with government in our face on a daily basis. There is just no template in playing a market where on a daily basis there is another massive government move to make things better. Most of the market rallied right up into resistance and moving averages... where on Thursday, they hit a wall. This is normal. It is quite normal for a market trying to repair itself, to rally up into these areas, pull back and try again until they knock them down. I will give the market that. I must also tell you that the bottom of the market has picked up. This can be found by looking at the much less new lows on a daily basis even though major indices are much lower on a relative basis. This tells you fewer stocks are participating on the downside.

On the other hand, I do have worries. Most importantly, there is still very little leadership. I have one group besides GOLD that is working... AUTO PARTS RETAIL. Sure, that will lead the market. On top of that, the market has now experienced two distribution days in short order. I know volume was skewed Friday because of expiration but for me, it still counts. I will just go back to my thoughts. If we are going higher, it is going to take time as bases need to be formed. Expect fits and starts and loads of curve balls. If the market goes lower, well, you are used to that anyhow.

I am an optimist. I hope all these government moves work. I am just thinking... zero interest rates, massive infusions of capital, printing money ad nauseum, Enroning the balance sheets of the financials... what happens if all this still doesn't work?

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 can not assure its accuracy or completeness. Neither the information or 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.