Klein Market Summary-June 17th, 2013

Klein Market Summary

June 17th, 2013

 

Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 8
Other Observations	Short-term correction continues with long-term uptrend still intact
Feel of the Market	Most leading stocks have traded light volume in recent weeks, as the rally has paused

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3423	3532
Nasdaq 100	2900	2943	3053
S&P 500	1600	1626	1687
DJIA	15000	15070	15542

Market Interpretation:

The short-term correction was met with a Follow-Through Day on Thursday, as most leaders continued to handle the action quietly.  In recent weeks, housing stocks and biotechs have been under pressure, as techs have generally consolidated constructively.

As the economy remains consistent, but lackluster, bond trades are becoming crowded, and foreign stocks are selling off, the stock market action seems to signal a continuation of the major uptrend, for now, though further evidence may tip the scales differently.

Joel’s Take:

In a typical Bull Market cycle, when the Fed begins to raise rates, the market may pause and then resume.  However, the rally usually persists until the third rate raise.  This cycle is certainly not typical, in that the Fed has maintained the lowest consistent interest rate in history, as the quantitative easing continues.  Once the current quantitative easing program ceases, then interest rate raises might begin.  Even so, it would seem that we are not near the end of the current rally, at least not due to rate increases.  It is also important to consider that the reason that rates go up, and that QE will eventually end, is that economic conditions are improving.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

 

Klein Market Summary-June 10th, 2013

Klein Market Summary

June 10th, 2013

Current Market Facts: 

Technical Status	Confirmed Uptrend Beginning Week 7
Other Observations	Friday’s quiet volume leaves the trend uncertain Leading stocks continue to act well
Feel of the Market	The short-term correction continues, while the major uptrend remains intact

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3469	3532
Nasdaq 100	2900	2991	3053
S&P 500	1600	1643	1687
DJIA	15000	15248	15542

Market Interpretation:

The uptrend continues, as last week’s unemployment number could allow the Fed’s stimulus program to continue.  While the Fed has said that their current easing campaign is tied to the unemployment rate, it is likely that they would tightened their policy sooner if economic growth improves.

While economic growth has been tepid, there are many stocks that have consistently high earnings growth.  Many of them are extended, but a few are not.

Joel’s Take:

As we begin to look towards the second half of the year, the current correction becomes more important.  If it were to extrapolate into an intermediate market correction, we might look for a fourth quarter rally.  However, leading stocks are generally only showing consolidation, and are not overrun with Distribution.  This suggests that the smart money is holding, by and large.  Still, it would be good to see some index accumulation to clarify the current action.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

 

Klein Market Summary-June 3rd, 2013

Klein Market Summary

June 3rd, 2013

Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 6
Other Observations	The uptrend has seen elevated levels of Distribution Many leading stocks remain resilient, with only a few showing weakness
Feel of the Market	The uptrend continues, but more Distribution could lead to trouble

 

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3456	3500
Nasdaq 100	2965	2982	3000
S&P 500	1600	1631	1700
DJIA	15000	15116	15400

 

Market Interpretation:

The level of Distribution seen in the indices in recent weeks is more consistent with a short-term correction or pullback of 4% – 7%.  Historically, market trends are driven by investor decisions, especially those of institutional investors.  Most major rallies, historically, have had an initial pullback, which serves the purpose of scaring investors out of an otherwise obvious uptrend.

Uptrends in recent years have been driven largely by Fed liquidity programs, and certainly investor reactions to those programs.  As a result, we have not always seen typical market pullbacks.

Joel’s Take:

Friday’s action showed significant weakness, causing investors to ponder the “Sell in May” cliche.  Combined with weakness in prior sessions, it is clear that selling has increased.  Additionally, the S&P 500 and DJIA hit lower lows on Friday, suggesting that they may continue to trend lower.  Volume increased as shares plummeted into the close.

While the weakness seemed to hit processed food and consumer staple stocks especially hard, retailers, tech stocks, and other growth companies continue to look constructive.  Retail has not led meaningfully during the current market rally, but it is showing signs of strength now:  GPS, UA, VFC, KORS, DSW, LULU, TJX, PNRA, and CRI, among others.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

Klein Market Summary-May 27th, 2013

Klein Market Summary

May 27th, 2013

 

Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 5
Other Observations	Last Wednesday’s big sell off quickly found support
Feel of the Market	Indices continue to show overwhelming signs of accumulation

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3459	3500
Nasdaq 100	2965	2991	3000
S&P 500	1600	1650	1700
DJIA	15000	15303	15500

 

Market Interpretation:

While the major market indices have continued to power into new high ground, leading stocks have continued to work.  Throughout the year, we have seen large cap, liquid stocks drive the rally, with the DJIA driving most of the first quarter rally.  In the past 5 weeks, tech stocks such as GOOG have begun to show leadership.

Biotech has remained a leading group, even through the series of sector rotation that we have seen this year.  We have also seen financials lead.  Many other groups have seen one or two stocks become leaders, as the broad money flow into the market persists.

Joel’s Take:

This broad rally is in full force as leaders continue to trend higher, even despite a market blip, as seen last Wednesday.  While more Distribution at these levels could become problematic, the behavior of leading stocks remains robust, by and large.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

 

Klein Market Summary-May 20th, 2013

Klein Market Summary

 May 20th, 2013

Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 4
Other Observations	Stocks continue to levitate as leadership and indices remain under robust accumulation
Feel of the Market	Leadership is coming from every industry group

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3499	3500
Nasdaq 100	3000	3029	3100
S&P 500	1600	1667	1700
DJIA	15000	15354	15500

 

Market Interpretation:

As indices have trended into highs, resistance levels have less significance.  The levels that I have cited above are psychological levels, which are either round numbers, or percentages of extension above recent levels.  Having broken into new high ground with broad, powerful leadership, the trend seems likely to persist.

Friday’s option expiration, which can bring heightened volatility saw continued strength.  This market environment is showing powerful breadth and strength not seen since the 1990’s.

Joel’s Take:

April brought a violent shakeout to stocks.  We saw levels of Distribution that typically lead to corrections.  Yet, the indices surged off of their 50 Day MA’s into new high ground.  Tech stocks have shown improved strength since that time, with AAPL bouncing off of its lows.  Tech leadership has emerged from several stocks including GOOG, PCLN, MSFT, CSCO, YHOO, and ARMH, among others.

In a market where many stocks are working, the ones with the best fundamentals tend to be the very best.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

Klein Market Summary-May 13th, 2013

Klein Market Summary

May 13th, 2013

 Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 3
Other Observations	Leadership has surged in recent sessions Indices have remained under accumulation into new high ground
Feel of the Market	Money is broadly flowing into stocks from other asset classes

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3400	3437	3500
Nasdaq 100	2937	2981	3000
S&P 500	1600	1634	1700
DJIA	15000	15118	15500

 Market Interpretation:

The market continues to trend higher.  Broad institutional demand, spurred by global central banks and low bond yields, continues to persist, even after the market has rallied for four months.  The April shakeout, which would normally lead to a correction, has become a distant memory as new leadership expands.

When assessing support and resistance levels, all relevant resistance has been broken as the S&P 500 and the DJIA have surged to all-time highs.  The NASDAQ indices are back at levels seen when the bubble burst in 2000.

Joel’s Take:

The market has continued to trend higher, easily clearing resistance levels.  Breadth among leading stocks has continued to expand.  Many of the stocks that had already been leading in terms of Relative Strength have just achieved earnings growth in their recent earnings reports, such as TSLA and NFLX.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.

Klein Market Summary-May 6th, 2013

Klein Market Summary

 

May 6th, 2013

 

Current Market Facts:

Technical Status	Confirmed Uptrend Beginning Week 2
Other Observations	Some leading stocks continue to hold up Indices are back up near highs
Feel of the Market	Earnings reports and Fed policy are in focus

Important Levels on Key Indices:

Index	Support	Last Close	Resistance
Nasdaq	3200	3279	3300
Nasdaq 100	2800	2841	2860
S&P 500	1575	1582	1597
DJIA	14500	14713	14887

Market Interpretation:

Broad accumulation has pushed the market to record highs.  The NASDAQ indices have taken a leadership role, led by AAPL, rebounding off of lows, GOOG, and MSFT.          While leadership continues to come from many different industries, the NASDAQ Comp. has lagged throughout the year, mostly due to AAPL’s downtrend.  It is interesting to note, that while the NASDAQ has led for the last two weeks, volume has come in lighter in the last two trading sessions, as the index broke out in earnest.

The S&P 500 and the DJIA, which have led the market to date, finally broke to new highs on Friday’s jobs report.  This was accompanied by increased volume on the NYSE.  Also of note last week, global central banks continued to enforce an increasingly accomodative policy, which might continue to help the markets to move higher.

Joel’s Take:

Last week, the indices overcame a high level of Distribution to move into new high ground.  This was accompanied by some breakouts, and many moves to new highs among leading stocks.  While this market has been tricky because the broad trend underwent an amount of Distribution that most often leads to a market top, the facts have clearly changed.  Significant exposure should only be taken in this market, after initial positions show gains.

• The Klein Market Summary is a professional interpretation of the general stock market conditions that is updated on a weekly basis.  Joel T. Klein is the portfolio manager of the investment partnership Blue Diamond Capital, LP. He writes the summary using select technical and fundamental data.  The Klein Market Summary is not intended to provide investment advice of any kind, and is only provided for the entertainment of the reader.  It is typically updated Monday morning, weekly.  Please e-mail info@kleinasset.com, if you are interested in receiving this free weekly update.
• Past performance is not a guarantee of future results.  Due to market volatility, a fund’s performance may fluctuate.  Current performance may be less than previous results.  An investment a hedge fund when redeemed, may be worth more or less than the original cost.  Information above is not a replacement for the Fund’s prospectus.  This webpage does not constitute any kind of offer or solicitation.  Additional information on investment objectives and policies is in the Fund’s prospectus.  Ask your representative for a prospectus.