Klein Market Summary-November 12th, 2012

Klein Market Summary

November 12th, 2012

Current Market Facts:


Technical Status


Market in Correction – Beginning Week 6

Other Observations The decisive election catalyzed broad Distribution

All major leading stocks from the 2009 rally have topped

Feel of the Market Institutions continue to flee for the exits


Important Levels on Key Indices:

Index Support Last Close Resistance
Nasdaq 2840 2905 2984
Nasdaq 100 2500 2583 2660
S&P 500 1360 1380 1400
 DJIA 12500 12815 13000

Market Interpretation:

The market has been in a relatively controlled correction for several weeks.  The last three sessions have seen institutional selling as the market prices in the results of the presidential election.  Tech titans like GOOG, AMZN, and AAPL have been under pressure, forcing the NASDAQ Composite to correct 9% versus the S&P 500’s 6%.  Last week’s election results on Tuesday night were met with broad distribution on Wednesday, and again on Thursday.  Volume backed off on Thursday, but remained strong, signaling that buyers were absent.  Friday saw the markets stall.

The markets look forward, and as such, are sifting through the complex information of Hurricane Sandy’s destruction, the Bush tax cut expiration, Obamacare tax increases, and the debt ceiling/fiscal cliff/sequestration.  In these events, it seems that the best that could be hoped for is that things may turn out better than their respective worst cases scenarios.

Joel’s Take:

There will always be another rally.  With the reelection of President Obama, the markets are looking forward to see how and if the immediate challenges will be resolved.  The market will then likely extrapolate forward on other issues.  So, if the debt ceiling is negotiated higher and spending comes under control, then it might be possible to make assumptions about whether other issues could be resolved, such as the tax rates remaining accommodative to fuel job creation and capital formation, for example.

Current market observations should focus on whether the current intermediate correction develops further into a Bear Market.  With the topping of many stocks that have provided leadership in recent years, this market has become one to avoid.

  • 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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