Klein Market Summary-December 3rd, 2012

Klein Market Summary

December 3rd, 2012

Current Market Facts:

Technical Status  Market in Correction – Beginning Week 9

Possible rally, Week 2

Other Observations The market has continued to trend higher

More stocks are beginning to trend higher

Feel of the Market All eyes are on Washington and the economy

Important Levels on Key Indices:

Index Support Last Close Resistance
Nasdaq 3000 3010 3020
Nasdaq 100 2670 2678 2700
S&P 500 1400 1416 1421
 DJIA 13000 13026 13187

Market Interpretation:

Stocks have continued to show improved strength.  With leadership emerging from consumer, medical, construction, and technology, there is yet another chance that the market may trend higher.  Still, without a true Follow-Through Day, the market is in an unconfirmed state.  While this new uptrend may evolve into a confirmed uptrend, it is not one yet.  Even so, leading stocks have hit new highs, in some cases, on big volume.

Late stage Bull Market action is very difficult to interpret and manage.  One key to interpreting the actual strength of the stock market is to rely heavily upon liquid leading stocks, and their actions, for interpretation.  As such, leadership is showing much more strength than the indices, so far.

Joel’s Take:

According to the research that I look at, interpreting Friday, November 23rd as a Follow-Through Day does not conclusively confirm an uptrend.  Certainly, it may end up working.  However, when you use a rigid system of rules based on probabilities, and then make exceptions to those rules, you lower your probability of success.  Thus, if we view this as a tradable rally, then we are using the strength of leading stocks as a mechanism to increase market exposure.

In any event, it is possible that a proper Follow-Through Day will occur.  It is also possible that Distribution levels could make this environment difficult quickly.  Late stage Bull Market uptrends can be very difficult and expensive environments because they start and stop so abruptly.

  • 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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