Klein Market Summary-December 17th, 2012

Klein Market Summary

December 17th, 2012

Current Market Facts: 

Technical Status Market in Correction – Beginning Week 11
Other Observations Then indices have continued to oscillate around key levelsLeading stocks remain intact
Feel of the Market We remain in a trendless market, so far

Important Levels on Key Indices:



Last Close






Nasdaq 100




S&P 500








Market Interpretation:

While many stocks are trending into new high ground, or at least staying close to new highs, the true leading stocks for the rally that began in March of 2009 have all topped.  AAPL, PCLN, NFLX, BIDU, CMG, and LULU have all topped and seen earnings deceleration.  We cannot know whether these stocks will return as leaders, but using them to help interpret the major market trend tells us that the uptrend that began in 2009 is very weak.

We expect the market to react to news regarding economic policies.  There are also many forecasts that the U.S. economy will enter a recession next year.  The outlook suggests a cautious investment approach.  Still, the market should be watched closely.

Joel’s Take:

When investing based on a properly constructed system of probabilities, it is important to recognize that any deviation from the rules of that system, will lower performance.  For example, a low volume Follow-Through Day has never led to a major market uptrend.  Discipline is the most important survival skill in this type of market.

As a money manager and a researcher my focus has overwhelmingly been the major market trend.  Because the probabilities of so many smaller events are tied to the major market trend, understanding that trend is the most important part of stock market investing.  Understanding the nature of market trends helps provide patience and focus during difficult periods such as the current one.  As such, the current environment is not one in which to have significant market exposure.

  • 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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