Klein Market Summary-September 10th, 2012

Klein Market Summary

September 10th, 2012

Current Market Facts:

Technical Status Confirmed Rally – Beginning Week 7
Other Observations Major market indices have broken out of cup-with-handle patternsAccumulation has powered the markets to decade highs
Feel of the Market Continued strength led by housing and suppliers

Important Levels on Key Indices:



Last Close






Nasdaq 100




S&P 500








Market Interpretation:

The indices broke out of constructive cups with handles last week, led by new highs in stocks such as LNKD, DIS, HD, EBAY and AMZN. The market emerged from a very tight consolidation, which served as the handle in its overall pattern.  Such chart patterns are not necessarily buy signals on the General Market indices, but just serve to confirm the strength already seen.

At this point, a truly powerful rally would continue to see signs of accumulation in leading stocks and the indices, especially after they are trading in new high ground.  The counter point is that many leading stocks are extended and due for a pull back.

Joel’s Take:

This rally is different in character than the one that began at the end of 2011.  That one lacked the broad liquid leadership that is now driving the market.  The current rally is led by innovative leaders, like AAPL and AMZN.  Homebuilders are being driven by a return of demand as well as the lack of capacity for builders and suppliers.  Expectations that the Fed will begin QE3, another mechanism for easing, are putting a lift under this market.  Yet, the quality of the current rally points to more than just that.  When leading stocks like the current ones are hitting highs, major institutional accumulation is the driving force.  Since the market discounts events 6 to 9 months in the future, it is probable that economic conditions may have improved by that time.

The highest probability stocks are ones that are emerging or have emerged from early stage bases, have high levels of liquidity, and therefore institutional support, and also have the best earnings growth.

  • 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.

About kleinmarketforum

Klein Asset Management, LLC, formed in 2003, serves individual investors via a directional growth stock approach. When the market is in an uptrend, the firm seeks to exploit investment opportunities. When the trend is down or neutral, assets are protected. Klein Asset Management undertakes major market research projects. In many cases, these result in improved investment methods, which ultimately improve performance.

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