Post by fastwalker on Aug 28, 2004 8:50:38 GMT -5
;DFYI..
This One Indicator Works Amazingly Well
Wednesday August 11, 10:17 am ET
By Gary Kaltbaum
I have received a ton of email questions in the past couple of days. Here are the questions and my answers. The questions are shortened so I don't get carpal tunnel.
Can the market just stop going down today, turn around and turn right back into a bull market?
ADVERTISEMENT
Absolutely! I conduct my thoughts based on one thing...anything can happen. But...my job is to not predict such things. My job is to figure out what the ODDS FAVOR. Odds favor, right now, NO WAY, the market can't turn right back into a bull market. But if things change, my job is to react quickly Normally, things set up first before changing. Bad markets give clues as well as good markets. All I care about is THIS SECOND. As of THIS SECOND, I have seen nothing that tells me that's about to happen. I have not seen one higher volume day that tell me the big money crowd is accumulating stock. In fact, it has been the exact opposite. Rallies have been on light volume....drops have been on heavy volume....and most support has been broke. I do believe and said in my report Monday that we are due any day for an oversold bounce. That's what we got on Tuesday. Playing it by the book, I now wait for a high volume follow-through day. Even if one occurs, there is not a lot of leadership and not enough quality bases to buy off of.
If this is a bottom, it will take time to repair.
What charting service do you use?
I use Dailygraphs.com as well as the Daily Graphs hard copy.
What sectors do you believe will lead the market out of this malaise?
I do not have a clue but when they show up, I will find them. You can't hide leadership.
If this is a bear market, how long does it last and how deep does it go?
Once again, I do not have a clue. But, if I was pinned down, normal bear markets dump the DOW and S&P 25% and the NASDAQ 40% plus. Keep in mind, I never try to predict these numbers. I just let the market be my guide.
If OIL dropped back to $30, do you think the markets would turn back up?
This is a great question. My biggest problem is that everyone says it would help the market. I have never seen markets accommodate everyone. My best guess is yes. I do believe one of the culprits has been high OIL prices. On the other hand, I believe the biggest problem is earnings...and that matters most.
What sentiment indicators do you use to tell you the markets are oversold here?
First off, just on price, the market is oversold. Whenever major indices get far away from their moving averages either on the upside or downside, I consider that overbought or oversold respectively. I also look at put/call ratios...but only when it goes to extremes. I used to watch the VIX a lot more...as well as how bullish or bearish newsletter writers are. I do not watch them as much anymore because they did not work well last year. I want to stay on top of indicators that have consistently been correct.
How many stocks do you scan on a daily basis?
You don't even want to know...but the answer is thousands. Needless to say, I am getting laser surgery on my eyes soon.
Who are other technicians I should follow?
I believe Stan Weinstein is the greatest technician of all time but you cannot follow his thoughts any more...unless you are an institution and willing to shell out serious bucks. I love Tom Dorsey because he just sticks to his indicators and keeps emotion out of the game. He is also excellent at guiding you on a day to day basis. Lastly, I am not writing this if it wasn't for William O'Neil. I gather there are many like me who could say those words.
How do you keep emotion out of the equation when you are wrong and selling at a loss?
It is simple. I have years of time-tested evidence that what I do...works. Believe me, this only came about by my own mistakes. The biggest problem with investors is not the winners they pick but when to sell losers. People are inherently optimistic and are always willing to believe things will turn out right. They keep hearing that things will turn and not to worry. That is a fatal error in the market as the market couldn't care less about you, me or the Pope. It will slam you regardless. The only failsafe you have is the ability to sell before too much damage is done. "Sell" is not a 4-letter word. Yes, some stocks will turn back up and drive you up the wall. It's the ones that keep on going down that will kill your account. Remember, on a 50% loss, it takes a 100% gain to just get back to even. Bad odds. It's like playing the 'hard ways' in Craps.
You always talk about following earning's estimates. Where do you get these numbers from?
Zack's Earning's forecast is far and away the best.
Why do you like the Mets so much? The Yankess are the way to go.
I have been asking myself that question for many years.
ON ANOTHER NOTE...this is what I wrote on July 20th:
"Have you seen the July 26 cover of "Fortune?" The cover's title: "THE CISCO KID RIDES AGAIN." A picture of cheerleader -- I mean CEO -- John Chambers comes with the title. Maybe I am nuts, but I have a very good memory. Back in May 2000, both Fortune and Worth magazines had covers either asking whether Chambers was the greatest CEO on earth or very simply telling you that you need to own the stock. The rest is history as Cisco (NasdaqNM:CSCO - News) fell from $82 to a bear market low of $8. I do not believe in spooks. I do not believe in ghosts. I do not believe in that dude who says he can speak to the dead. I do believe in my sentiment indicators when they go to extremes. Call it the Sports Illustrated jinx. Call it what you want. Let's watch test number 3 and see if Cisco stock is about to get in trouble. Just know I have never seen front covers like this at some sort of low."
Since I wrote that, CSCO has dropped from $22 to $20.40. CSCO is, as of this writing, down $1.20 in the aftermarket to about $19.20 as they warned of a slowdown in coming quarters. I continue to be amazed to how well this indicator works.
Gary Kaltbaum
P.S. Read my new book The Investor's Edge. You can find it at www.garyk.com.
;D
This One Indicator Works Amazingly Well
Wednesday August 11, 10:17 am ET
By Gary Kaltbaum
I have received a ton of email questions in the past couple of days. Here are the questions and my answers. The questions are shortened so I don't get carpal tunnel.
Can the market just stop going down today, turn around and turn right back into a bull market?
ADVERTISEMENT
Absolutely! I conduct my thoughts based on one thing...anything can happen. But...my job is to not predict such things. My job is to figure out what the ODDS FAVOR. Odds favor, right now, NO WAY, the market can't turn right back into a bull market. But if things change, my job is to react quickly Normally, things set up first before changing. Bad markets give clues as well as good markets. All I care about is THIS SECOND. As of THIS SECOND, I have seen nothing that tells me that's about to happen. I have not seen one higher volume day that tell me the big money crowd is accumulating stock. In fact, it has been the exact opposite. Rallies have been on light volume....drops have been on heavy volume....and most support has been broke. I do believe and said in my report Monday that we are due any day for an oversold bounce. That's what we got on Tuesday. Playing it by the book, I now wait for a high volume follow-through day. Even if one occurs, there is not a lot of leadership and not enough quality bases to buy off of.
If this is a bottom, it will take time to repair.
What charting service do you use?
I use Dailygraphs.com as well as the Daily Graphs hard copy.
What sectors do you believe will lead the market out of this malaise?
I do not have a clue but when they show up, I will find them. You can't hide leadership.
If this is a bear market, how long does it last and how deep does it go?
Once again, I do not have a clue. But, if I was pinned down, normal bear markets dump the DOW and S&P 25% and the NASDAQ 40% plus. Keep in mind, I never try to predict these numbers. I just let the market be my guide.
If OIL dropped back to $30, do you think the markets would turn back up?
This is a great question. My biggest problem is that everyone says it would help the market. I have never seen markets accommodate everyone. My best guess is yes. I do believe one of the culprits has been high OIL prices. On the other hand, I believe the biggest problem is earnings...and that matters most.
What sentiment indicators do you use to tell you the markets are oversold here?
First off, just on price, the market is oversold. Whenever major indices get far away from their moving averages either on the upside or downside, I consider that overbought or oversold respectively. I also look at put/call ratios...but only when it goes to extremes. I used to watch the VIX a lot more...as well as how bullish or bearish newsletter writers are. I do not watch them as much anymore because they did not work well last year. I want to stay on top of indicators that have consistently been correct.
How many stocks do you scan on a daily basis?
You don't even want to know...but the answer is thousands. Needless to say, I am getting laser surgery on my eyes soon.
Who are other technicians I should follow?
I believe Stan Weinstein is the greatest technician of all time but you cannot follow his thoughts any more...unless you are an institution and willing to shell out serious bucks. I love Tom Dorsey because he just sticks to his indicators and keeps emotion out of the game. He is also excellent at guiding you on a day to day basis. Lastly, I am not writing this if it wasn't for William O'Neil. I gather there are many like me who could say those words.
How do you keep emotion out of the equation when you are wrong and selling at a loss?
It is simple. I have years of time-tested evidence that what I do...works. Believe me, this only came about by my own mistakes. The biggest problem with investors is not the winners they pick but when to sell losers. People are inherently optimistic and are always willing to believe things will turn out right. They keep hearing that things will turn and not to worry. That is a fatal error in the market as the market couldn't care less about you, me or the Pope. It will slam you regardless. The only failsafe you have is the ability to sell before too much damage is done. "Sell" is not a 4-letter word. Yes, some stocks will turn back up and drive you up the wall. It's the ones that keep on going down that will kill your account. Remember, on a 50% loss, it takes a 100% gain to just get back to even. Bad odds. It's like playing the 'hard ways' in Craps.
You always talk about following earning's estimates. Where do you get these numbers from?
Zack's Earning's forecast is far and away the best.
Why do you like the Mets so much? The Yankess are the way to go.
I have been asking myself that question for many years.
ON ANOTHER NOTE...this is what I wrote on July 20th:
"Have you seen the July 26 cover of "Fortune?" The cover's title: "THE CISCO KID RIDES AGAIN." A picture of cheerleader -- I mean CEO -- John Chambers comes with the title. Maybe I am nuts, but I have a very good memory. Back in May 2000, both Fortune and Worth magazines had covers either asking whether Chambers was the greatest CEO on earth or very simply telling you that you need to own the stock. The rest is history as Cisco (NasdaqNM:CSCO - News) fell from $82 to a bear market low of $8. I do not believe in spooks. I do not believe in ghosts. I do not believe in that dude who says he can speak to the dead. I do believe in my sentiment indicators when they go to extremes. Call it the Sports Illustrated jinx. Call it what you want. Let's watch test number 3 and see if Cisco stock is about to get in trouble. Just know I have never seen front covers like this at some sort of low."
Since I wrote that, CSCO has dropped from $22 to $20.40. CSCO is, as of this writing, down $1.20 in the aftermarket to about $19.20 as they warned of a slowdown in coming quarters. I continue to be amazed to how well this indicator works.
Gary Kaltbaum
P.S. Read my new book The Investor's Edge. You can find it at www.garyk.com.
;D