You're watching...
Gary Kaltbaum, author of “The Investor’s Edge,” on why he is predicting a market pullback, and how to play it smartly.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Believe -- -- today's gains our first guest says it does more headwinds facing the market and there's a potential.
For 10% correction joining us now is Gary count -- president.
Of -- found capital management -- A lot of people sort of talking.
You know pull back these days correction these days why why are you in that particular camp.
Well first off on me just say if we get a 10% I think it's actually a good thing I think bullishness has picked up a little too much.
I actually don't like the fact that all these IPO's a doubling its a little bit too much froth.
I'd like that to be taken back so we do get it I I think you bias but what I'm seeing right now with I watch the semi -- real closely they look to be breaking down here.
I'm not sure I like the way the financials are -- here right now.
We start to get some little some if the economic numbers.
And I just think if we break the last two weeks lows -- definitively gonna get it.
I don't think it's gonna be that painful but I think we go lower.
If we don't lower Gary my fear is what will be the catalyst to get us out of this because it feels like when we go on -- nose dives is not just five or 10%.
Ben Bernanke will give -- -- that they just printing more money.
Outlook for the last three years whenever they announced QE1 QE2 that whatever Operation Twist.
When the ECB -- European not people announced the they -- -- harp and Q week.
The market started rallied so I think that's really all that takes since they are.
You know just flooding the world with all kinds of money -- 0% interest rates I think that does -- -- -- But -- it is April 20 now on people have been talking about this so called that the correction for many many days many weeks many months.
We still haven't seen it yet what is going to be the driver to get just a pullback -- least not we started to see this last week.
It even early parts of this week that we turn around and gained it right back.
Well not -- a rolling correction right now I can tell you that the small cap indices are already down about 5% the NYSE all self.
I think even the down disappeared down a few percent so I think -- in it right now.
The good news is for me it's a rolling correction like if you notice spots like under armor and horrible like some of these specialty retailers.
Did doing great on the other end of the spectrum.
I'm seeing things like bank American financials breaking down in semiconductors -- here and SanDisk are getting pummeled here.
So I think -- -- you know Bob basically become more of a mixed tape.
I just suspect that.
Heading into that may period which has been notorious sought to get that sell in May -- go -- period I think we'll have a few more percent down hopefully it's not worse than that.
Do you play and the extent and -- correction -- an already don't see consecutive days of pullbacks BC ups and downs ups and downs so what are you doing with your money right now.
Well what life follow a 198 sectors in the market I can promise you not every sector at one time is bullish and not every sector is -- -- just look at the things.
That are hanging in there and acting well and right now on my list.
Remains like the visas of the world that's acting strong as I mentioned on door former.
Our Coach but we have about 2000 earnings reports coming out the next two weeks and -- -- I do with I sit back put my feet up.
Watch Fox Business I wait for the earnings the come out and if if they companies -- well and the more -- -- reacts well to the earnings.
They get off my list -- if they break out of trading ranges by jump all over.
-- wait and see mode until -- -- come out you know we get the big enchilada Tuesday with apple that's gonna -- drive the market one way or the other.
Whether they disappoint and not in -- wants to see what happens from there.
You know another thing I noticed -- over the last couple weeks were seriously -- -- pronounce this week is.
It's a rotation out of the high beta names into the low beta names was obviously.
As a sign of of anxiety may be a little bit affair and that panic just yet.
-- but you know is that sort of dictating how you also operator are you looking for stocks with -- -- less volatility.
That that is always meaningful for me when the market sells risk and starts the by Procter & Gamble and Colgate.
It means that the money flows are going into more defensive areas and it's told you that potentially doesn't mean it has though.
Potentially the market's gonna give it up a little bit so we're just single little bit of that again I don't see the end of the world come and I don't see any bear market -- it's an election year.
But I just think it's normal to get some pullbacks here we got a little hot heavy to the upside here recently and it just.
