Archive | February 2013

Klein Market Summary-February 25th, 2013

Klein Market Summary

February 25th, 2013

 

Current Market Facts:

Technical Status

 Confirmed Rally Beginning Week 9

Other Observations

High volume market Distribution has weakened some leaders

Leadership continues to thin out

Feel of the Market

Waiting for more evidence: Is this an initial pullback or a top?

 

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3100

3162

3200

Nasdaq 100

2756

2738

2800

S&P 500

1500

1516

1575

 DJIA

13661

14000

14198

 

Market Interpretation:

The market action on Wednesday and Thursday brought the markets back to the levels that they were at in mid-January.  This heavy Distribution weighed on the leadership as more leading stocks showed evidence of basing.  As the sequestration draws near, the market is poised to go in either direction.

It would not be unusual for an intermediate correction to begin now, based on historic precedent.  However, there is also a strong case for a continued uptrend, especially where new leading stocks have emerged to replace the fallen leaders of the last few years.

Joel’s Take:

Investing in recent years has been exceedingly difficult because market trends have begun and ended abruptly, largely as the result of being driven by Fed policy.  This has caused unusual behavior in leading stocks, in some cases, as well.  The current trend is no different.  However, it makes the current action less clear.  Historic market rallies tend to have minor pullbacks, or short-term corrections.  Last week’s Distributions could be part of that action.  Yet, if we are still stuck in rallies, like those that are being lifted primarily by Fed liquidity, and not pure institutional demand, then we might anticipate that any more Distribution would end this uptrend.

Watching KORS, it has been interesting to see a stock with amazing fundamentals be continually weakened by insider activity.  KORS has the best earnings growth metrics in retail right now, but it has been unable to achieve a sustained uptrend, as it announced its third follow-on offering last week.

  • 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.

Klein Market Summary-February 19th, 2013

Klein Market Summary

February 19th, 2013

Current Market Facts:

Technical Status  Confirmed Rally Beginning Week 8 

Other Observations

Indices have tightened up in recent sessionsSome leading stocks have tumbled in the last week

Feel of the Market

Some thinner leading stocks have fallen 

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3100

3192

3200

Nasdaq 100

2770

2765

2800

S&P 500

1500

1520

1575

 DJIA

13661

13982

14000/14198

Market Interpretation:

Markets have seen constant accumulation at and near highs.  The rally is reminiscent of the rally that occurred in the first quarter of 2012.  That rally was similar because the indices did not have an initial pullback, which is extremely unusual historically.  This aberration was probably caused by a Fed liquidity program that was creating an enormous amount of liquidity.  I do not mean to imply that the rally is not real in any way, just that the current rally has not paused or pulled back meaningfully, yet.

Last week, some of the marginal leading stocks like RAX, URBN, BBRY, DDD, and SSYS, fell hard.  This is not necessarily a sign of weakness because these stocks did not have leading technicals or fundamentals, or in the case of DDD and SSYS, were of lower liquidity and had already flashed several sell signals.  Liquid leading stocks generally have continued to thrive, with most sectors participating in the rally.

Joel’s Take:

While the 2012 rally did not have an initial pullback, most rallies do.  When an eventual correction, short-term or long, does occur, it is important to limit exposure in order to protect stocks that have hold rules in effect.  While it would be ideal to have your best positions match up with the best leading stocks in the market, it does not always work out that way unfortunately.  Only a very few stocks should be held through bases.  Those are usually the stocks that you have bought and held properly, kept a low basis in, and are up 30-50% from your buy points.

Garden variety stocks rise 20-25% between bases.  True leaders tend to go much further.

  • 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.

Klein Market Summary-February 11th, 2013

Klein Market Summary

February 11th, 2013

 

Current Market Facts:

 

Technical Status  Confirmed Rally Beginning Week 7

 

   

Other Observations

Accumulation continues to dominate index action
   

Feel of the Market

Leadership remains robust, continues to expand

 

    

 

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3100

3194

3200

Nasdaq 100

2770

2775

2800

S&P 500

1500

1518

1575

 DJIA

13661

13993

14000/14198

 

Market Interpretation:

The market rally is white hot.  The S&P 500 continues to power into new highs.  The NASDAQ Composite is on the brink of rising to decade highs.  That is quite a feat considering that AAPL has corrected more than 38%.  Other liquid NASDAQ tech leaders have been trending higher, including GOOG, ORCL, EBAY, and FB.

While the rally is quite extended, it remains under aggressive institutional accumulation.  In the last week, LNKD joined the ranks of ultra-hot leading stocks, as it surged on Friday, as quarterly earnings nearly tripled.

Joel’s Take:

At this point in the rally, most leading stocks have broken out.  A few more might emerge from earnings reports or recent IPO’s.  While economic signals remain mixed, the Fed’s liquidity programs are driving real estate and equities higher.  Additionally, bonds have been selling off, creating further fuel for the stock market.

Leading innovative growth stocks have continued to trend higher.  A handful have tested support levels, but most continue to surge.  Construction, tech, consumer, medical, and energy stocks are surging higher.  It is important not to chase stocks beyond normal buy areas.  On the other hand, now is a good time to determine which of your stocks are real leaders, and to decide how to handle them.  It is important to take some profits on the way up, according to your rules.

  • 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.

 

Klein Market Summary-February 4th, 2013

Klein Market Summary

February 4th, 2013

Current Market Facts:

Technical Status Confirmed Rally Beginning Week 6

Other Observations

Indices and broad leadership have trended higher

Feel of the Market

Indices continue to trend into new highs

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3100

3179

3200

Nasdaq 100

2750

2764

2800

S&P 500

1500

1513

1575

 DJIA

13661/14000

14009

14198

Market Interpretation:

Many leading stocks have emerged from short digestions as the S&P and DJIA surged to new highs.  As these indices pass key levels, it is important to realize that they are extended and somewhat obvious at this point.  Refiners have surged, as construction and financials generally trended higher.  Tech continued to lag slightly.

Small cap stocks have led throughout January.  Yet, on Friday, liquid stocks such as GOOG and GS broke out to highs.  It would not be unusual to see a rotation into large caps as this rally continues.

Joel’s Take:

In the midst of this powerful uptrend, we continue to ponder whether this should be looked at as a late stage bull market move, or the beginning of a newer trend.

With capital goods and services stocks acting well, and some liquid innovative growth stocks lagging, we might conclude that this is a last hurrah.  Yet, the jury is still out.  With the Fed’s enormous liquidity, and bonds seeming to have topped, as observed by ETFs such as TLT, there is an argument that this cycle might defy normal behavior.  The answer will emerge in coming weeks and months.

  • 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.