Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Bulls Steps Up Again.....

Stock-Markets / Stock Markets 2010 Mar 24, 2010 - 03:50 AM GMT

By: Jack_Steiman

Stock-Markets

This has been one of those bull markets that constantly make you earn your winnings. It has forced us all to play in to the teeth of some very overbought conditions. If we had followed conventional overbought rules we would have missed out on quite a bit of nice plays. Normally, when RSI's hit 70 across the board on the daily charts, that's it for the short-term. That rule applies in almost all normal bull markets. Not this one.


That's what makes it so tough. 70 RSI and 90+ stochastics are usually lethal for the short-term with regards to any additional upside action. Again, even that combination hasn't been able to sustain any downside action. So when you're confronted with this situation there is only one way to play. You buy the best base set ups when they're in their handles and not overbought. These stocks will pull back some if the market sells but the more oversold they are the less they're likely to fall. As the market moves around over time, these bases are breaking out one by one in their own good time, not ours. They can frustrate as they move about, especially when they have a nice move lower just after you get in.

The key is hanging in there as long as the pattern in place hasn't broken down. The vast majority of these plays are working out over time. There really isn't any other way to play a market this overbought. Buy the best set ups and waits for the results to work out over time. You really don't want to be in cash too often because this market has told us that isn't the way. Of course, we'll all get caught at some point, but it'll be a small price to pay for having done so well throughout this bull run. There is no perfection in this game.

We started out slightly higher today and then spent a good deal of time giving back those gains and going red on the S&P 500 and Nasdaq for short periods of time. The bulls have been relentless since back testing the 1151 S&P 500 breakout a couple of days ago and thus as the day rolled on they took control once again with the market slowly but surely gaining a better bid to the up side. Higher and higher we went as we entered the last hour of trading. The bears basically stepped aside by covering their plays allowing the market to close on the highs. The Dow up slightly over 100 points. The Nasdaq nearly 20, and the S&P 500 up 8. Solid gains across the board, which naturally made this overbought market more so. Solid action everywhere you turn which is once again the trademark of this market. Health throughout.

The question being asked over and over now is whether this market is going back to the old highs. I don't think even close personally, but I can't say I know anything for sure to be totally honest because all I do is play the signal given at any moment in time, and I have no idea what that signal will be next week let alone months from now. None of you should be spending a single moment worried about the longer-term. Your focus should be on getting the moment right as much as humanly possible in this, the hardest game on earth.

Is it possible we'll get back to the old highs at 1576 S&P 500? Yes. It is just as likely, however, that the S&P 500 will see 800 before 1300. There is just no way to know for sure and again, don't use up any energy thinking about it. Never play with your emotions. Play the message of the market. It has become that simple otherwise you make the very complicated even more so.

So 1151 S&P 500 is the key to support for now and it's trying to put more distance away from it so that when a larger pullback does takes place, the market can become oversold enough to allow it to hold there. With the market back testing 1151 successfully, any future sell off should really hold there. Sure, a small breach is always possible but 1151 is strong support for now.

Peace

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, 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 SwingTradeOnline.com!

© 2010 SwingTradeOnline.com

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.


© 2005-2022 http://www.MarketOracle.co.uk - 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