Archive | March 2013

Klein Market Summary-March 25th, 2013

Klein Market Summary

March 25th, 2013

 

Current Market Facts:

Technical Status

 Confirmed Rally Beginning Week 13
   

Other Observations

Cyprus is the biggest concern for the markets?!

Indices barely budged last week, despite attempts to sell off

   

Feel of the Market

Leadership appears to be rotating as indices remain robust
   

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3213

3245

3300

Nasdaq 100

2783

2800

2812/2878

S&P 500

1538

1556

1575

 DJIA

14382

14512

15000

 

Market Interpretation:

It was somewhat confusing to observe the global market reaction to a panic move by the Finance Ministry of Cyprus to seize bank assets owned by private citizens and companies.  Without diminishing the plight of those involved, the size of Cyprus as a global power is miniscule.  Its GDP is only about 0.2% of the European Union, and a default there just won’t effect the rest of Europe, or Global Economics.

The Cyprus news was important, as a technical test of the market’s resilience.  The U.S. stock markets, at all time highs, are somewhat vulnerable for a short-term correction, as we had about a month ago.  However, by the end of the week,  the pullback had a negligible effect, with the indices closing flat.

Joel’s Take:

I don’t often evaluate leading stocks in the KMS, except as a commentary on market strength.  It has been fascinating to watch the contrast of AAPL’s topping action with an otherwise powerful uptrend.  The effect has been that the QQQ is up only a few percent since the first trading day of the year, while other indices are far outperforming.

To comment on other leading stocks, mortgage stocks OCN and NSM appear to be correcting.  Housing stocks continue their uptrends, even though some have become somewhat obvious.  Housing suppliers appear to be the most robust here as stocks such as LL and LPX seem poised to trend higher.  Medical groups are acting well, led by hospitals, insurers and biotech.  Tech and some consumer names are also acting well.  Retail seems to be lagging with the recent action of ULTA, LULU, and KORS.

I have a personal bias towards very liquid stocks because I am convinced that they provide the best opportunity in the market.  Seeking the best liquid leading stocks, I have found HD, LNKD, CELG, NFLX, CREE, GOOG, LEN, MA, V, PAA, PHM, BA, TDG, YHOO, BIIB, DFS, NDAQ, and GMCR.  While I often hear investors ask about stocks like RKUS or DDD, I avoid thinner ones because they often have the type of volatility that can be seen in these two.

  • 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-March 18th, 2013

Klein Market Summary

March 18th, 2013

Current Market Facts:

Technical Status

 Confirmed Rally Beginning Week 12
   

Other Observations

Distribution is increasing at recent highs

Leading stocks remain robust

   

Feel of the Market

Leading stocks are extended at this point, some 8 week hold rules are expiring
   

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3213

3249

3300

Nasdaq 100

2783

2799

2800/2878

S&P 500

1530

1571

1575

 DJIA

14000

14514

15000

 Market Interpretation:

Friday’s option expiration catalyzed a Distribution Day.  All indications are for a lower open this morning.  Another short-term correction, like the one at the end of February might be constructive, at this point.  Still, the Cyprus bank levy, which is apparently the catalyst for the global sell-off, would seem to be somewhat small, even if it is extreme.

Observing leading stocks when the market is under Distribution is a powerful way to observe which leaders remain highly in demand.  In periods of potential trend change, rules are of the utmost importance.

Joel’s Take:

In the first quarter, many stocks have offered opportunity for solid profits.  Financials, consumer technology, medical, construction, and commodity stocks have all contributed to market leadership.  If the current uptrend continues, then the action that we are seeing right now could manifest as a sector rotation out of some leading groups into new ones.

  • 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-March 11th, 2013

Klein Market Summary

March 11th, 2013

 

Current Market Facts:

Technical Status

 Confirmed Rally Beginning Week 11

Other Observations

Market continues to trend higherMarket volume is indeterminate

Feel of the Market

Many leading stocks continue trending higher as the indices close at highs

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3213

3244

3300

Nasdaq 100

2800

2804

2878

S&P 500

1530

1551

1575

 DJIA

14000

14397

14400

Market Interpretation:

So far, the NASDAQ indices have lagged in the 2013 rally, due largely to the breakdown of its heavyweight, AAPL.  While the NASDAQ may have had a Follow-Through Day on March 5th, the leading S&P 500 did not.  It had light volume.   Since then, the markets have held up, but Accumulation days would be welcome.  High volume action in the next few sessions may be telling.

Leading stocks remain robust, with leadership coming from most sectors.  Housing, consumer technology, financial, and medical groups continue to lead.  Some stocks have hold rules in effect, forcing disciplined investors to hold them for several more weeks, in some cases.  Others like V and MA have built solid bases, and could break out at any time.

Joel’s Take:

As the rally continues, we are upon a period where it might typically become more obvious.  This can manifest itself with additional market pullbacks, such as the one that occurred at the end of February, or increased volatility in leading stocks.  Rules-based discipline should keep you on track, but it is important not to chase stocks outside of normal buy areas, and to stagger buying over several days.  Short-term market pullbacks are healthy for a major uptrend, and good for us, if we don’t get shaken out of leading stocks improperly and if we find sound opportunities to buy new leading stocks.

  • 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-March 4th, 2013

Klein Market Summary

March 4th, 2013

 

Current Market Facts:

Technical Status

 Confirmed Rally Beginning Week 10
   

Other Observations

Volatility was limited as sequester occurred

Many leading stocks trend higher, while others consolidate

   

Feel of the Market

Distribution is elevated, but not yet sufficient to conclude a market 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:

As the dreaded sequester finally came to fruition on Friday, the markets remained stable overall.  The indices gapped down on Friday, but quickly reversed higher.  Some leading stocks quickly moved into new high ground.  The market should still be considered to be in an uptrend.  However, there is an elevated level of market Distribution.  More Distribution in coming days would be enough to conclude that the market has had a change of trend.

In the next session or two, there may a good feel for the level of importance that the sequester will have.  Some feel that the Sequester is irrelevant.  Others, like the CBO, are suggesting that hundreds of thousands of jobs will be cut.  With all of the political spin regarding the possible and necessary effects of the cuts, the market is the best mechanism for determining the real impact.

Joel’s Take:

The focus continues to be on market action and Distribution.  Though the indices are pausing, it is not clear whether the major trend has changed or not.  Though some of the lower quality stocks have broken down, and others are basing, some of the best stocks continue to trend higher.   Leaders, at this point, continue to signal a market uptrend.  Even so, exposure should be reduced in response to market Distribution.

  • 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.