Klein Market Summary-June 3rd, 2013

Klein Market Summary

June 3rd, 2013

Current Market Facts:

Technical Status

Confirmed Uptrend Beginning Week 6

Other Observations

The uptrend has seen elevated levels of Distribution

Many leading stocks remain resilient, with only a few showing weakness

Feel of the Market

The uptrend continues, but more Distribution could lead to trouble


Important Levels on Key Indices:



Last Close






Nasdaq 100




S&P 500









Market Interpretation:

The level of Distribution seen in the indices in recent weeks is more consistent with a short-term correction or pullback of 4% – 7%.  Historically, market trends are driven by investor decisions, especially those of institutional investors.  Most major rallies, historically, have had an initial pullback, which serves the purpose of scaring investors out of an otherwise obvious uptrend.

Uptrends in recent years have been driven largely by Fed liquidity programs, and certainly investor reactions to those programs.  As a result, we have not always seen typical market pullbacks.

Joel’s Take:

Friday’s action showed significant weakness, causing investors to ponder the “Sell in May” cliche.  Combined with weakness in prior sessions, it is clear that selling has increased.  Additionally, the S&P 500 and DJIA hit lower lows on Friday, suggesting that they may continue to trend lower.  Volume increased as shares plummeted into the close.

While the weakness seemed to hit processed food and consumer staple stocks especially hard, retailers, tech stocks, and other growth companies continue to look constructive.  Retail has not led meaningfully during the current market rally, but it is showing signs of strength now:  GPS, UA, VFC, KORS, DSW, LULU, TJX, PNRA, and CRI, among others.

  • 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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