Gary Kaltbaum Sees a Possible 10% Pullback Ahead
Kaltbaum said a 10% correction would be a good thing. He feels bullishness has picked up too much and doesn’t like all the IPOs doubling. If we get that kind of stiff correction, Kaltbaum would buy the market.
Kaltbaum stated he has looked at semiconductors closely, which look like they’re breaking down (technically). He added that the financials aren’t acting too well and the economic data coming out has been “iffy.”
If we break the last two weeks lows, we’re definitively going to get it (10% correction), according to Kaltbaum. He doesn’t believe it will be too painful.
When asked by Charles Payne what would prevent the correction from getting out of hand, Kaltbaum smilingly replied Ben Bernanke will get on T.V. and say he’s printing more money. All it takes is an announcement by the Fed or the ECB of more easing to get prices higher, according to Kaltbaum.
Kaltbaum characterized the current market as being in a “rolling correction.” Kaltbaum said the small cap indices were down about 5% along with the NYSE, Dow and S&P 500 being down a few percent.
Kaltbaum mentioned Under Armour and Herbalife as companies that were doing great; on the other end of the spectrum he sees names like Bank of America and other financials breaking down. Altera and Sandisk were also getting pummeled, as Kaltbaum put it. Kaltbaum considered “the tape” mixed.
Kaltbaum said we’re heading into the “sell in May” period and he hopes the correction is not worse.
The interview continued with Kaltbaum commenting on what he’s doing with his money, stocks he’s interested in (Visa, Under Armour, Coach), and what it takes to get on his buy list.