Klein Market Summary-September 9th, 2013

Klein Market Summary

September 9th, 2013

 Current Market Facts:

Technical Status

 Confirmed Rally – Beginning Week 10

Other Observations

Indices have held support, continue to digest recent gains

The leadership points higher

This pause has been tightly confined on NASDAQ

Feel of the Market

Syria and tapering have taken center stage

 Important Levels on Key Indices:

Index

Support

Last Close

Resistance

Nasdaq

3574

3660

3694

Nasdaq 100

3053

3133

3150

S&P 500

1627

1655

1666/1700

 DJIA

14760

14923

15658

 

Market Interpretation:

This holiday-shortened week was more interesting than the prior sleepy week.  With the NASDAQ seeing accumulation on Tuesday and Wednesday, Friday’s interesting action cannot be fully interpreted for another session or two.  However, there are consistent signs of support on the market indices even as leading consumer technology and biotech stocks have continued to trend well into new high ground.

Friday saw a sharp price break in the markets the permeated most of the leadership.  However, support was found within minutes as the NASDAQ fell 54 points, or 1.5% in 30 minutes, and then quickly recovered to a higher high.  However, the indices faded late in the day, as the S&P 500 failed to clear its 50 Day MA and the DJIA remained under 15000.  The major indices closed flat on the day on big volume.  The action was probably support and accumulation.  However, there was also evidence of selling as the indices peaked mid-afternoon.

If the indices trend higher in coming sessions, Friday’s action would be interpretable as accumulation.  However, if Friday’s lows are retested, then I would conclude that there is still a substantial level of supply at current market levels.  This remains a news-sensitive environment as major world events unfold.

Joel’s Take:

Leadership continues to rise, with QIHU pushing ever into higher ground.  I remember considering the theme of the 2003 Bull Market, at the time.  That market, like most in the past decade, was a recovery rally.  It was not a rally that resulted from expansion or growth, but rather it followed a major correction.  The predominant theme of the leadership in 2003 was Consumer Technology, as leaders like EBAY, SNDK, RIMM (now BBRY), and TASR made huge moves.  Consumer technology remains the theme today.

It is important to reflect on the week-to-week variations that occur in the markets.  Yet, as I reflect on historic growth, this consistency makes complete, logical sense.  In the 1880’s railroad stocks began to move.  They continued to be important for more than 30 years, in the stock market.  However, when they ceased to be important, it was because they were superseded by auto manufacturers, and their suppliers, and subsequently aviation stocks.  Still, today BA and TSLA remain innovative in these fields.

The internet has really only existed commercially for 20 years.  For most people, the internet has been a way of life for a much shorter period.  It is not surprising that the same consumer tech theme has remained in place for a decade, and will likely continue much longer.  Consider that FB, one of the only liquid tech IPO’s since GOOG, is only just seven weeks into its move.  Using recent precedents of GOOG, AAPL, DELL, BBRY/RIMM, CSCO, MSFT and AMGN, FB may move for quite some time.

  • 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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