The party looks to be over...for now

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.

We believe the market has lost some, if not all the wind at its back. This is not occurring out of recent weakness but out of recent strength. Markets have been too stretched and extended for too long. Eventually, markets trade back to the norm...which would be recent support levels or moving averages.

We make note of several occurrences.

Small cap and mid cap indices, which have lagged the larger caps, are breaking near-term support. Not the end of the world but we make note that while the larger cap indices are just pulling back, the Russell 2000, midcap 400 and smallcap 600 are now below support.

BROKERS have topped. The charts of (LEH | Quote | Chart | News | PowerRating), (MS | Quote | Chart | News | PowerRating) and (BSC | Quote | Chart | News | PowerRating) evidence this. Notice the heavier volume. They, like the major averages are headed for nearest support or moving averages.

Many RETAILERS have topped. The charts of (ANF | Quote | Chart | News | PowerRating) and the (RTH | Quote | Chart | News | PowerRating) evidence this.

We are now on watch for the SOX to see if it holds the 444 support. A break would not help the cause.

All this does not mean the party is over. It means...RIGHT NOW...the party looks to be over. Pullbacks are normal after a good move up. We just wanted to let you know that we believe risk has picked up here and believe more corrective work could be at hand.

Gary K