Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Buying The Dip.....

Stock-Markets / Stock Markets 2010 Mar 16, 2010 - 02:13 AM GMT

By: Jack_Steiman


The market started to sell today. Finally!! We started fairly flat but then started heading down with the Nasdaq leading the way, which made sense since it has been the leader on the way up in this bull market. What leads up is the most overbought thus it's likely that it'll lead down to unwind those oscillators. However, a funny thing happened, yet again, when this market tried to sell off. It couldn't stand the selling. Very unusual to say the least. This market was at extreme levels of overbought coming in to today thus when it started to sell it made sense that the selling would stick and it seemed that it would. A few buying attempts were thwarted down by the bears, making today seem as if it would be a trend down day.

Then came the final hour and then in came the buyers. The market clawed back with the Dow going green along with a fractional gain from the S&P 500. The Nasdaq down a few points. The S&P 500 closing once again at the 1150 level, seemingly begging to break out, overbought or not. Such is the way of a bull market, like it or not. It just can't find sustained selling as buyers rush in the moment they see some selling. Fear of missing. Try telling anyone who's ever been around this game that it isn't 100% emotional. It is and when a market is trending higher, the natural inclination is for buyers to step up whenever it sells some, even if it seems it's not enough. Usually it's not really enough but the emotion is just too intense and thus traders rush in. Today we saw this late. It is what it is, enough selling or not.

Keep in mind we have to respect the fact that we are overbought still. This means that we can still sell at any time. The S&P 500 could stall at this 1151 level and just meander for a while thus there's no all clear here. You do, however, need some exposure at all times in a market such as this one simply because it refuses to sell a while lot before buyers show up. This reality means there will be times when some plays are under water a bit and such is life. You have to be able to mentally deal with this reality and accept it for what it is with the understanding that good base set ups, such as the stocks we're in, are likely to make a strong move higher over time. Patience is the key after you've seen a move higher and you've gotten used to quick gains.

Any selling that takes place above those 50-day exponential moving averages is just noise within the up trend and does NOT tell us that we're too bullish with regards to sentiment. Bears may tell you that is the case but it is NOT the case at all. It's important not to get too emotional with normal selling that takes place from overbought within an uptrend and not to rush to a conclusion that it's based on extremes of bullish sentiment when that spread is only 21.3%. For now there is no problem with the level of bulls to bears at all. There's quite a ways to go before that becomes a real problem again.

The key to a bull market is those daily internals. We have watched this rally from the very beginning show characteristics that say this market can continue to climb. We have seen the advance decline line stay strong throughout. On the up days we witness spreads of advancers over decliners that tell us the majority of stocks are participating and from all over the market place. On down days, money finds a way to rotate in, keeping losses to a minimum and from keeping decliners down enough so as to not overwhelm the advancers. New highs continue to expand while new lows go nowhere. The momentum indicators continue to impulse or advance hard with price. Nothing on the bullish end of the coin is lagging.

Price is strong as are the internals and until this reverses, we have to trust the message being sent. It has worked so far and there's no reason to believe it won't in the near future. Stick with what's working until that trend changes. No sign of that yet. Some day it'll all change, of course, but for now the market internals are saying higher prices, above S&P 500 1151, are coming soon.

Support on the S&P 500 is near 1130 on gap down to the low 1120's. Can we fall that far? Sure we can although the market is showing no signs of wanting to do that. if the S&P 500 can break cleanly above 1151, it'll use that level as massive support on back tests to unwind future overbought conditions. If we start losing 1120, then something else may be developing but I don't think that's in the markets future here. The Nasdaq has great support down to 2300 but I don't think we'll see that either, especially if the S&P 500 clears through 1151.

If the S&P 500 sees 1130 or so, then the Nasdaq can see 2300. The key here is the S&P 500 making the move through 1151. Again, this can then act as strong support down the road on pullbacks. Very interesting time for sure here as the bears are feeling the heat with the S&P 500 trying to clear 1151. Next few days will be very interesting.



Jack Steiman is author of ( ). Former columnist for, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Sign up for a Free 21-Day Trial to!

© 2010

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in