Klein Market Summary-June 17th, 2013

Klein Market Summary

June 17th, 2013

 

Current Market Facts:

Technical Status

 Confirmed Uptrend Beginning Week 8

Other Observations

Short-term correction continues with long-term uptrend still intact

Feel of the Market

Most leading stocks have traded light volume in recent weeks, as the rally has paused

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3400

3423

3532

Nasdaq 100

2900

2943

3053

S&P 500

1600

1626

1687

 DJIA

15000

15070

15542

Market Interpretation:

The short-term correction was met with a Follow-Through Day on Thursday, as most leaders continued to handle the action quietly.  In recent weeks, housing stocks and biotechs have been under pressure, as techs have generally consolidated constructively.

As the economy remains consistent, but lackluster, bond trades are becoming crowded, and foreign stocks are selling off, the stock market action seems to signal a continuation of the major uptrend, for now, though further evidence may tip the scales differently.

Joel’s Take:

In a typical Bull Market cycle, when the Fed begins to raise rates, the market may pause and then resume.  However, the rally usually persists until the third rate raise.  This cycle is certainly not typical, in that the Fed has maintained the lowest consistent interest rate in history, as the quantitative easing continues.  Once the current quantitative easing program ceases, then interest rate raises might begin.  Even so, it would seem that we are not near the end of the current rally, at least not due to rate increases.  It is also important to consider that the reason that rates go up, and that QE will eventually end, is that economic conditions are improving.

  • 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.

5 responses to “Klein Market Summary-June 17th, 2013”

  1. Hetal Patel says :

    Hi Joel,

    I remember that Joel used to write weekly summary in very much detailed way including leading stocks names and its behavior. It seems you don’t include the leading stocks names anymore. It was very insightful.

    Is there a reson you stop writing stock names in your weekly summary ?

    TSLA doubled in two months and consolidating for 3 weeks and current structure looks very much like TASR Aug-Sept 2003 pattern. TSLA also went sideways for 2.5 years simillar to Syntax June 1960-March 1963.

    TSLA also 3 qtrs of significant sales acceleration from -25% to 678% to 9999% and triple digit earning for last qtr. TASR had simillar triple digit accelrating earnings and sales grwoth for 3 qtrs during second high tight flag so TSLA is showing fundamentals simillar to TASR and chart pattern look simillar to Syntax.

    Any thoughts ?

    Thanks
    Hetal

    • Hetal Patel says :

      Hi Joel,

      I forgot to mention about TSLA sponsorship.

      It is owned by many Oniel funds. Marsico flexible capital, Wasatch core grwoth, fidelity magellan, fidelity contrafund, Fidelity OTC and columbia marsico 21st century and columbia Acorn.These are Bill’s favorite funds.

      It is holding its 21 day in current correction where lot of leading stocks fall under 50 day MA but TSLA is not. selling is drying up.

      I would like to hear from you on this.

      Regards
      Hetal

  2. kleinmarketforum says :

    Hetal,

    I don’t generally comment on stocks, unless as part of the broader market commentary.

    In the past, I did write about leading stocks to discuss chart patterns, sponsorship, etc., but have not done that for awhile. Thank you for your kind comments.

    TSLA has had a remarkable move. Even after tripling, recently, it seems to remain under accumulation. Yet, the stock is extremely volatile and obvious. This does not mean that it can’t work, but just that the potential risks are very high, as are the potential rewards. The stock is also quite extended, in a market that seems to be topping in the last 2 sessions.

    TSLA has shown many positive attributes, fundamentally. While it may be forming a 3 weeks tight pattern, or a high tight flag/pennant, it is often best to wait for the proper buy point.

    The risks could be similar to NFLX this year, also obvious, which despite an enormous move, only offered 1 clean buy point, assuming that you don’t buy stocks with negative earnings growth. All other NFLX buy points have proven difficult for the disciplined investor.

    TSLA should be watched, as the market direction now seems to be lower. Thank you for your comments.

    • Hetal Patel says :

      Thanks Joel. I appreciate your feedback on this.
      I’m holding LNKD at this moment as i bought it at 118. TSLS does look obvious and we know that obvious thing don’t work. It’s in public’s eye constantly. This is what puzzling me.

      Nasdaq also made bullish reversal on Friday in huge volume. I’m not sure if decline is over or not as Friday was Quadraple witching day.

      Thanks
      Hetal

      • kleinmarketforum says :

        Hetal,

        TSLA looks like a sound pattern. While it is possible that it could rebase due to the market consolidation, that might ironically be the thing that lets this structure work. In other words, if the market trend is unclear right now, a TSLA breakout might not be as obvious and many investors may not buy, even if a stock breaks out here. TASR screamed higher for 3 months in 2004, while the market corrected. It is interesting that several stocks are showing strength despite the market – V, MA, PII, TSLA, PCLN, CREE, and XONE.

        Best,

        Joel

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