Klein Market Summary-January 7th, 2013

Klein Market Summary

January 7th, 2013

Current Market Facts:

 

Technical Status  Confirmed Rally Beginning Week 2
   

Other Observations

Powerful beginning to 2013 confirms a new rally

Broad accumulation has driven the market to highs

   

Feel of the Market

Stocks are in demand
   

 

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3061

3102

3200

Nasdaq 100

2713

2724

2785

S&P 500

1448

1466

1474

 DJIA

13365

13435

13650

 

Market Interpretation:

The market has surged higher, led by broad action in large financials, medicals, consumer names, and basic goods and services stocks.  While the Follow-Through Day occurred later than usual, it does qualify as a rally confirmation.  With tax increases finally agreed upon, and the sequestration postponed, there may be some room to rally here before negotiations between the political parties take center stage again.

On Friday, the S&P 500 had its highest close since 2007.  It has yet to take out 2012’s intraday high of 1474.  AAPL has been the most important market index component in the past decade, with an S&P 500 weighting of 4% and a NASDAQ 100 (QQQ) weighting of 20%.  With AAPL’s earnings decelerating, and its chart clearly demonstrating net institutional selling over the past quarter, it may continue to weigh on indices, even as current leading stocks trend higher.

Joel’s Take:

With a rally under way, it is important to balance the urgency to get invested at proper buy points with the awareness that many stocks are emerging from late stage bases.  Earnings are right around the corner – another challenge to getting invested at this point.  However, during an earnings season, such as this one, where a stock’s earnings may have been impacted by acute events such as Hurricane Sandy or the fiscal cliff, forward looking commentary might be much more important than actual earnings for the quarter.  A weak quarter may not be an indicator of a stock’s performance, but rather a short-term condition.

Rules-based discipline is the best way to profit in a market like this one.  Buy at proper buy points.  Keep losses small.  Let winners run.

  • 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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