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:
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.
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 firstname.lastname@example.org, if you are interested in receiving this free weekly update.
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