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
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Last Monday, I penned these words:
"Obviously, this is why the DOW is popping here.
Most of these DOW stocks are popping of of earnings. For them, it is good. I do
not want to throw cold water on what I am seeing but I am just letting you know
that for this second, this action is reminding me a little bit of last April. At
that time, the NASDAQ/NDX were laggng while mega-cap defensive-type issues were
leading the way. Then May showed up. Again, I do not want to throw cold water
but I really want to see the NASDAQ/NDX/RUSSELL 2000 to confirm even more. We
just came off a gross drop, a follow through only 3 weeks from the top...and now
this."
Well...the market is now REALLY reminding me of
last April...right before a correction occurred. Why?
From my studies of the market, when the DOW leads
by a wide margin, it is close to a top of some sort. Add in the fact that the
DOW is 600 points above even short-term moving averages, and you have the
makings of a pullback. This pullback did not start Monday. It started a few days
ago when the A/D topped out.
Other evidence:
Small-cap indices haven't been close to keeping
up with the DOW. It should be the opposite. The RUSSELLL 2000 is gagging
already...on the first meaningful down day. This is a negative.
I believe the REITS are down...kinda like the
Yankees. I mean done. Many are rolling over badly after a long move up.
Many RETAIL names are rolling over after the
first day down. I do not like the charts in FD, TGT, LOW, HD, CHIC, SKX, JCP,
BBY, CC, SPLS, KSS.
FINANCIALS never caught fire in this recent move.
The end of the world is not at hand. I am just
letting you know that the market has now started some corrective work. The job
now is to see if any pullback turns into something worse. This market has been
feast or famine with no in-between...and yes...May has now arrived.
Gary Kaltbaum
