Klein Market Summary-June 24th, 2013

Klein Market Summary

June 24th, 2013

Current Market Facts:

Technical Status

 Correction Beginning Week 2

Other Observations

Fed meeting catalyzed the correctionLeading stocks are basing

Feel of the Market

Change of trend marked by large amounts of supply at current price levels

Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3306

3357

3391

Nasdaq 100

2800

2878

2933

S&P 500

1560

1592

1600

 DJIA

14444

14799

15000

Market Interpretation:

The rally came to an end last week as the Fed policy change nears, even despite the Federal Reserve’s best attempts to soften the effects of the change.  The Distribution seen last Wednesday and Thursday reiterated that the powerful uptrend was caused primarily by the massive bond purchasing program that the Fed has been undertaking.  While many institutional and individual investors rode the market higher, they are clearly exiting the market in recent sessions.

One of the Fed’s stated objectives had been to use the wealth creating effect of the stock market to help stimulate the economy, and thus try to shore up weak fiscal policies.  Yet, as the stimulus is near its end, it seems that the economic backdrop does not justify record high stock markets.  While I would not expect the Fed to turn a blind eye to the stock market, it is not their mandate to prop up any markets, especially given the Fed’s historic tendency to overshoot with their policy decisions.

Joel’s Take:

The defense must take the field now, as the stock market is in retreat.  This powerful rally has come to an end, with the winding down of quantitative easing.  It is time to review past trades and await future opportunities.

Leading stocks should be watched for proper consolidations, as groups such as housing are under heavy pressure.

  • 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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