Market Is Oversold, but Will It Bounce?

Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show "Investors Edge" on over 50 radio stations. Gary is also editor and publisher of "Gary Kaltbaum's Trendwatch"...a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary's Daily Market Alerts click here or call 888.484.8220 ext. 1.

I will be on Fox Business Network Tuesday and Thursday from 2-4 pm.

Would someone please get Alan Greenspan to shut the heck up? Does this man even care about the repercussions of his loose lips? Someone give him a couple of valiums. What an egomaniac!

For many moons, I have outlined those areas that were already in bear markets. Many of them topped as far back as February.

For many moons, I have outlined how the market was becoming more narrow by the week.

For many moons, I have outlined that this type of narrowing was not a good sign.

For many moons, I have outlined those areas that were still working.

They ain't working any more!

The leading OIL group now has many names topping out.

The leading COMMODITY groups are turning into dust.

The leading countries like CHINA, HONG KONG, INDIA and BRAZIL have now topped.

The leading SHIPPERS group is being blasted.

GOLD and SILVER look like goners as the stocks are leading the metals to the downside. This almost always is a precursor for the metals to follow.

And now...the leading TECH-types like AAPL, RIMM, BIDU, GOOG and many other leaders are being distributed out of wide and loose patterns.

That leaves not much left leading this market.

The short-term support levels I outlined for you yesterday were already taken out. We still may receive a holiday bounce...especially off of very oversold conditions...but that will not change a market with seriously deteriorating internals. I was thinking the market would at least hold into the new year...but as of this second, market continues to be distributed. I do not believe January will be kind.

I do make note that the worst areas like FINANCIALS and RETAIL are very oversold and due to bounce...but that does not mean they have to. In bear phases, surprises are mostly to the downside...and oversold can become much more oversold.

Gary Kaltbaum