Klein Market Summary-November 26th, 2012

Klein Market Summary

November 26th, 2012

 Current Market Facts:

Technical Status  Market in Correction – Beginning Week 8
Other Observations The market has risen for several sessions on diminishing volume

Some potential leaders have surged to highs

Feel of the Market Market has recovered substantially on light volume

 

Important Levels on Key Indices:

Index Support Last Close Resistance
Nasdaq 2800 2967 2985
Nasdaq 100 2500 2640 2667
S&P 500 1350 1409 1426
 DJIA 12500 13009 13253

 

Market Interpretation:

As 2012 winds down, the market remains a difficult environment.  Many of the innovative growth stocks that fueled the 2009 Bull Market have topped.  The current market is seeing strength in financials, construction, commodities, and medical groups.

While current events like the fiscal cliff and Europe’s recession continue to play out, the market is poised to confirm another uptrend.   The action continues to be consistent with a late-stage Bull Market trend.  Most of the real leaders have topped, but new stocks are trying to lead.  AAPL has bounced off of the lows of its recent sell off, recovering about one third of the way, as it undercut its recent low, triggering a short-covering rally.  The undercut of 522 on AAPL also paves the way for a base count reset.  While AAPL has seen significant technical damage, it continues to be weighted very heavily on the NASDAQ and the S&P 500.

Joel’s Take:

Our paradigm is not to predict, but to anticipate probabilities based on historic precedents and rules.  As such, it would not be unusual to have another market rally or two before a sustained correction.  However, these rallies tend to lack the innovative stocks that typically power strong Bull Market trends.

Risk management is very important here.  Remaining disciplined will be the best way to filter a real opportunity from a trap.  Many stocks that break out from late stage bases pull back before running higher.  Unless you are seeing significant progress, there is little justification for much exposure.  With the market still in correction, patience is the current mandate.

  • 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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