Klein Market Summary-December 10th, 2012

Klein Market Summary

December 10th, 2012

Current Market Facts:

Technical Status  Market in Correction – Beginning Week 10

Possible rally, Week 3

Other Observations

The markets have pulled back from 50 Day Moving AveragesLeadership continues to hold up, as market has paused

Feel of the Market

The status quo Washington politicians are delivering status quo results, so far

 Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

2936

2978

3000

Nasdaq 100

2613

2641

2679

S&P 500

1400

1418

1424

 DJIA

13000

13155

13290

Market Interpretation:

The market remains in an unconfirmed state, by all highly probable definitions.  While many stocks bounced 2 weeks ago when AAPL came off of lows, it is clear that AAPL is not a leader at present.  Since it has been a leading stock since 2009, and since August of 2004, for nearly every market rally, there is a critical question upon us: Is AAPL still a correct indicator of market direction?  If so, the current market should be looked at a deteriorating one, not an unconfirmed rally.  There is also a negative bias on the NASDAQ indices because of the mammoth weighting of AAPL.  The constrast between the NASDAQ Composite and the S&P 500 is due almost entirely to the 28% decline in AAPL.  Additionally, former liquid leaders like BIDU and are trending lower as institutions head for the exits.

Construction, commodity, medical, retail, and some technology stocks are rallying in the current environment.  Current leadership is consistent with classic late-stage Bull Market leadership – commodities, aging late-stage growth stocks, capital goods and services, and laggards.  While there are several investable stocks that are moving currently, the probabilities of a powerful rally now are fairly low.

Joel’s Take:

No stock can lead forever.  In recent history, several stocks have existed as perpetual leaders.  In the 1990’s, MSFT, INTC, CSCO, GE, and many others rallied year after year, as their long-term earnings expanded, driving huge stock gains.  This happened in many other periods of history with stocks from many industries.  Since 2004, AAPL has been the most consistent leading stock.  However, with the departure of Steve Jobs, and the maturation of two key product lines, iPad and iPhone, as well as a few executional misfires, like maps, the stock is either done leading for the short-term, or is permanently done as a leading stock.

This is just another reason that the current market environment is exceedingly complex.  The major indices are a great filtering mechanism for the relevance of headlines and major economic items.

  • 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.

3 responses to “Klein Market Summary-December 10th, 2012”

  1. Allan says :

    MUST I PAY A FEE TO RECEIVE THE MOST CURRENT WEEKLY SUMMARY?

    • kleinmarketforum says :

      Allan, Thanks for your inquiry. No, there is currently no fee for the weekly summary. You can either subscribe for the KMS by just clicking on the ‘Follow’ button in the lower right hand corner and entering your email address. Or you can email us at info@kleinasset.com and we will subscribe your email address for you. From there, you will receive a confirmation email, all you have to do is click on the ‘Confirm Follow’ button within that email and you are all set. You will receive the KMS directly via email each week. Thank you for your interest in the Klein Market Summary.

      • Allan says :

        WELL, I HAVE BEEN RECEIVING THE FORUM BUT LATELY IT ARRIVES WITH DATA FROM THE PREVIOUS MONDAY’S MARKET RESULTS.
        HOW DO I VIEW THE CURRENT FORUM DATED DEC 17TH?

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