Klein Market Summary-November 5th, 2012

Klein Market Summary

 November 5th, 2012

 Current Market Facts:

Technical Status  Market in Correction – Beginning Week 5
Other Observations Last week’s partial trade saw signs of support

Liquid tech leaders continue to erode

Feel of the Market Election uncertainty and Hurricane recovery

Important Levels on Key Indices:

Index Support Last Close Resistance
Nasdaq 2961 2982 3086
Nasdaq 100 2637 2660 2744
S&P 500 1400 1414 1434
 DJIA 13000 13093 13330

Market Interpretation:

Several pivotal issues remain unresolved:  the election, the recovery from Hurricane Sandy, and the tech breakdown led by AAPL.  There will be ample evidence in coming days about the impact of these items.  The market reaction, as always, is the best mechanism for evaluating the importance of these critical events.  Still, uncertainty can have a paralyzing affect on major market participants, and the market itself.

As the market continues to flounder along lows, an uptrend has yet to be defined.  This remains a market where defense is key.  Medical, construction, and consumer may yield the best opportunities for leadership, at this juncture.  Tech stocks have almost certainly rotated out of the candidacy for market leadership.  This continues to reinforce the hypothesis that current the market action should be construed as a late stage Bull Market.  Leadership might be expected to come from cyclicals, not growth stocks.

Joel’s Take:

Our hearts go out to the victims of Hurricane Sandy.  While this natural disaster will have lasting effects on many of the individuals who were impacted, the effects on businesses and the markets seem to be more fleeting.  In modern times, most New York businesses have disaster plans, data back up, etc.

The election is a wait-and-see situation.  Each outcome brings its own opportunities and potential challenges, with regards to the stock market trend.  The issues surrounding the presidential election are complex and are certain to evolve quickly in coming days.  New trends can begin rapidly, so preparation is key.  Late stage market action often requires investors to take profits more quickly than early in a Bull Market.  Patience must continue to be the guiding principle here.

  • 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.
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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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