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WHO NEEDS TO WAIT FOR OUR FED? CHINA NOW JOINING THE PRINTING PARADE!

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WHO NEEDS TO WAIT FOR OUR FED? CHINA NOW JOINING THE PRINTING PARADE!

We typically do not write in the middle of the day but things are getting noisy. And we are not talking about the market. We are talking central banks. While all the divergences are still out there, China announces 500 billion of printing and at the same time, Yellen leaks 0% for a long long long time. As usual, a stumbling market gets juiced and life is good again. So we now have Europe and China printing oodles and oodles…as Bernanke University is open for business.  Short sellers may have to put their life jackets back on because there continues to be a direct correlation with the trillions printed and equity markets. Call it manipulation, rigging…doesn’t matter. We call it the reality of the situation and thinking they will never stop unless and until markets stop them. None believe there will be any repercussions of all this interference because so far, there have been no repercussions. Psychology and human nature dictate people will repeat and repeat behavior as long as it provides pleasure and no pain.  The spigot opens even more than it already is.


GARY ON MONDAY’S GROWTH YONKING!

USmoneyprinting1200

GARY ON MONDAY’S GROWTH YONKING!

Monday’s action was a yonking of growth and the average stock while the DOW was up.

While the DOW was up, the a/d was over 2-1 to the negative.

While the DOW was up, new lows outpaced new highs…which is amazing.

While the DOW was up, the Russell 2000 was down the equivalent of 200 DOW points.

Leading growth names were simply blasted. Social media, tech, biotech and the like were shown no mercy. Volume was heavy on many of the moves.

Add Monday to the already weak areas mentioned over the weekend and….NORMALLY…we would tell you something is up…and to be cautious. But in a Fed-induced money printing market, we have seen this before. Not as bad…but we have seen this before. There will be a time where all the weakness does lead to a double-digit correction. Time will tell. Just realize that underneath-the-surface, the market looks more like the Russell than the Dow. If you are invested, it remains a large cap land as small caps are still in a coma.


GARY ON THE MARKETS CHURNING UP HERE!

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GARY ON THE MARKETS CHURNING UP HERE!

A lot to digest this week as underneath the surface, a lot of jello moving on the plate…and it is not in a good way.

While the major indices are at or near recent highs:

The small caps continue to woefully underperform. This theme has been going on for months.

Bearish action can be found in:

AUTOS,CONSTRUCTION MACHINERY,COAL,ENERGY,GAMING,GOLD/SILVER,HOUSING,INDUSTRIALS,
METALS/ORES,RESTAURANTS,REITS.

Toppy action can be found in BIOTECH and SEMICONDUCTORS. These two areas have led…so they will be important to watch. There is potentially a classic double top in the SEMIS. This is a pattern that shows up AFTER a big move in where a high is made, a drop takes it down…and a secondary high is hit at or near the first high.

While the major indices at or near recent highs, amazingly, new yearly lows outnumber yearly highs.

Our proprietary survey of stocks in good shape versus bad shape continues to woefully lag major indices.

We would like to add a few other things to ponder.

The bond market looks to have topped as yields are now heading north. This move topped out the REITS badly in the past week and probably the UTILITIES. This should be watched as the Fed has had its way with rates by printing trillions. To her credit, Yellen has been rolling it back…with more to come this week. The question is whether she will blink if we get a decent correction and just start printing again.

Sentiment remains a joke…meaning no bears. As we have stated numerous times, the numbers we follow are at multi-decade lows. One has to go all the way back to 1987 to find them…not kidding.

Do not get us wrong. There is still plenty working. In fact, big FINANCIALS have been starting to move out of range. As short rates stay down and long rates move up, margins expand…thus the reason for this move higher. We shall see if it lasts. On top of FINANCIALS… AIRLINES,CHEMICALS,HEALTHCARE,HOTELS/TRAVEL,INVESTMENT BANKS,RAILROADS,RETAIL and TRUCKING continue to act well.

We just believe the market may have been churning in the past week or so. Churning usually changes a trend. One good down day will start sending the major indices back down to the 50 day average where there will be a big test. That said, one good day could take us out of range for another leg up but with a lot of warts. We suspect it is the former.


THE LEVERAGING OF JUNK BONDS! YEAH!

junk-bonds

THE LEVERAGING OF JUNK BONDS! YEAH!

We have been telling you for a while now that the big bubble is in the bond market…specifically junk bonds. In fact, we are finding bonds that would have yielded 10% just a few short years ago…now yielding 5 %. We just found a bond that we bought yielding 5% a few short years ago, now yielding just over 1% on an equivalent basis. Now we get the leverage back into the system by people using other people’s money. Does anyone remember the leverage in the CDOs, CMOs, M-O-U-S-E? So we repeat…when things come undone, and they will because that is what the Fed is experts at…booms and busts, look to the junk bond market first. Read on!

SOURCE: http://davidstockmanscontracorner.com/wall-street-at-work-aggravating-risk-citi-says-leverage-junk-bonds-at-2-3x/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+Mid+Day+Friday


GARY ON THE MARKETS

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GARY ON THE MARKETS

We will have a bigger report over the weekend but had a couple of thoughts today.

The market trades tight in here. There is a case for churning in where the market trades with no progress…leading to a change of near-term direction. There is also a case for this being the pause that refreshes before higher prices. Instead of being in one camp or the other, we take the stance of NEXT MOVE WINS. We suspect the next move will happen soon enough as volatility has contracted. So get ready! More over the weekend.


MY 9/11 THOUGHTS!

Tribute in Light

MY 9/11 THOUGHTS!

As I woke up this morning, I turned on the tube and noticed the major network’s first news story was not the 13th anniversary of 9/11. I then noticed the front cover of USA TODAY had no articles on it. I then noticed the WSJ only had the picture with the lights shining at the site. I am not sure this is good news or bad news…that such an important date is tucked away on this all-important day. This was a day where we all realized that the bad guys could inflict harm here. This was a day where we changed how we traveled. This was a day that changed how we thought. This was a day where an enemy was defined. I worry that 13 years have drowned some of this out and as we get farther away, it will only be drowned out more.

For me, I remember exactly where I was, what I heard, who I was with, what I said, what I did the rest of the day to the minute, what I told my son. I remember that whole week the market was shut as there remained worry there was going to be more attacks. I personally did not know anyone who perished on that day, but I knew many who knew many that were. I have spoken to many of them. Their lives have changed forever.

I was just in Israel for a week where over 300 rockets were shot into the country. Does anyone believe that if possible, these culprits would not be doing the same to us? We must never forget that unfortunately, there are many on this planet who do not value life and just live to kill. We must never forget that these terrorists are jealous of our greatness. We must never forget the lives that were lost, the families that were broken apart and make sure we do everything in our power that this never happens again. After 13 years, our prayers still go out to those affected by what happened on 9/11/2001!

 

 

 


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Investors Edge – 09/15/2014 Hour 1

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Investors Edge – 09/12/2014 Hour 1

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Investors Edge – 09/11/2014 Hour 1

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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. 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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