Klein Market Summary-October 1st, 2012

Klein Market Summary

October 1st, 2012

Current Market Facts:

Technical Status  Confirmed Rally – Beginning Week 10

Other Observations

Distribution pushed indices off highs as the quarter ended

Leadership remains intact

Feel of the Market

Is this the initial pullback or a longer correction?

Important Levels on Key Indices:



Last Close






Nasdaq 100




S&P 500








Market Interpretation:

The market has come under a moderate level of distribution in the past week.  It began with churning action during options expiration on September 21st.  Typically, a strong rally will move higher for several weeks and then pullback for a week or two.  Some of the recent rallies, especially the one at the beginning of 2012 and the September 1st rally of 2010 did not have any significant pullbacks.  The lack of an initial pullback is unusual historically.  It is partially the result of Fed monetary policy that is designed to reinflate real estate, but is causing inflation in other asset classes as well.

Leading stocks continue to be the best view into the market’s strength.  Leaders like AAPL, GOOG, AMZN, PHM, and LEN continue to show strength despite significant profit-taking last week.  It is typical for most stocks, when extended, to pull back to their 10 Week Moving Averages.  We may be seeing that initial pullback to the 10 Week in the next week or two.  Earnings season will begin in coming weeks.

Joel’s Take:

I think that the mandate of anybody who manages an investment account is to balance 2 priorities.  First, never get in a position where the portfolio shows a big loss.  This is done through letting your performance determine the limit of market exposure – not your emotions.  The second, offsetting objective is to buy and hold positions according to rules – sitting with stocks until rules force you to sell.  To execute this approach well requires constant monitoring of exposure, performance, and your stocks.

  • 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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