Klein Market Summary-October 29th, 2012

Klein Market Summary

October 29th, 2012

 Current Market Facts:

Technical Status Market in Correction – Beginning Week 4
Other Observations The major indices have formed 3 waves down on daily and weekly charts

Liquid leaders have continued to correct

Feel of the Market The correction continues as the election nears

Important Levels on Key Indices:

Index Support Last Close Resistance
Nasdaq 2976 2988 3093
Nasdaq 100 2655 2666 2779
S&P 500 1400 1412 1425
 DJIA 13000 13107 13348

Market Interpretation:

As Hurricane Sandy and the election overshadow all other news, the NASDAQ Composite has found support at its 200 Day Moving Average, near 3000.  It has formed 3 waves down, which often can correspond to the end of a correction.  Yet, it is important not to predict where the market will go, but only to anticipate what the market might do.

As the correction persists, we are aware that the 2009 market bottom produced several liquid leading stocks that trended higher for several years: AAPL, BIDU, CMG, LULU, PCLN, NFLX, GMCR, and SBUX.  All of these stocks have either topped, or are forming deep, distributive bases, with the possible exception of AAPL.  While many charts appear to be forming sound bases, most come from cyclical groups, capital goods and services, medical, consumer, or financial groups.  Generally, this leadership would lead us to conclude that we are in a late stage Bull Market.

Joel’s Take:

Patience and discipline are the best mindsets for surviving a correction.  Unless you continue to hold leading stocks with substantial cushion, you should have a defensive posture.  The current market is an ideal time to maintain a state of preparedness for a possible new uptrend.

The election will pass very soon, leaving looming economic issues such as taxes, the debt, the deficit, unemployment, the fiscal cliff, and sequestration.  The relevance of these issues is best evaluated by the action of the major market indices.

In the meantime, the U.S. markets will be closed today and probably tomorrow because of the hurricane.  It is likely that the markets will be open for the end of the month on Wednesday.

  • 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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