Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

S&P 1200 Remains Too Difficult... For Now....

Stock-Markets / Stock Markets 2010 Nov 22, 2010 - 04:36 PM GMT

By: Jack_Steiman


And that's not bad news at all. The market could definitely use more to refresh. A longer time to pause to sell off slowly but gradually. Enough time to unwind those oscillators from neutral to oversold on those daily charts. The longer we sell off slowly the more sentiment will erode. The market wouldn't be best served if we just flew up here. Won't happen in all likelihood, but anything is always possible.

Bottom line is the market is behaving in a fashion that serves it best. It's gradually pulling back without getting slaughtered. That's what normal behavior looks like when a market is coming off measurements made over several months. I know it can be somewhat frustrating, especially if you're over playing, but that's the reality of the stock market my friends. It's not always your best friend and when it's not, only playing less, and more appropriately, will allow you to survive without getting your pockets picked clean. This will also allow you to play harder and without fear when the market says it's time to rock back in down the road.

The more bad experiences you put yourself through now, the less you'll perform up with the market when the time comes, thus, it's two-fold if you play too hard. Relax and go with the flow of the markets message. It says that light playing is best, and that if you do play, nothing high beta in terms of risky plays. Low to medium beta the way to survive best.

Over the weekend the SEC announced that the world will be rocked with the biggest insider buying scam ever. That they have some huge names caught in the act of giving out information in an illegal manner. I'm shocked!! The market not fair? No way! That can't be true! We all know it's on an equal playing field don't we?! Anyway, maybe for once something will get done on a level never seen before. This didn't help the market with its futures this morning. A nice rush lower with those guilty to be financials getting hit the hardest. Goldman Sachs (GS) seemed to have felt it the worst dropping nearly 3 1/2%. Well deserved and well earned. A slaughter that couldn't be more deserving to those wonderful financial stocks.

However, with regards to the stock market, it had little to no effect by the time the market closed for the day. The market shrugged it off and came back strong with the Nasdaq actually finishing green. The S&P 500 and Dow were red, but again, well off their lows. Solid action for sure across the board as the market continues the lateral to down process.

So what's next you ask. The S&P 500 has to close above trend line and horizontal price resistance at 1200 before it can go back and test its highs at 1228. That would clearly set up the symmetrical triangle possibly in play here. We are very unlikely to break out any time soon, but a multi-week to multi-month base would be a good thing for the market as it would spike fear, which has gotten less by quite an amount over the past few weeks.

The longer we go nowhere the more traders hate the game. A very broad-based triangle would really get emotions flying high as we swing wildly within the range. Nothing like a wide and loose triangle to get the masses to hate things so that would be best. A move over 1200 would start that process. 1183 S&P 500 or gap support is next on that side of the ledger. So for now it's really about what goes first. 1183 is key support and 1200 key resistance. The triangle would set up better if we can get through 1200 first.

The very best way to play a wide and loose triangle is, basically, to go cash at the top, or even short a play if you see a great set-up. More than 3 plays below 1200 isn't smart. A drop more above 1200 if right would be fine. There is no way to know how long this lasts, but we have started week three with the range, thus far, set between 1228 on the top, and 1171 on the bottom, although a move back above 1200 sets up a stronger triangle.

Either way this is the range for now with the smaller range stated above between 1183 and 1200. It's also best to keep away from super beta plays although above 1200 S&P 500 on a closing basis could open the door to one play in that arena. However, overall it's best to keep things to lower to medium beta plays as a measure of safety. Play it slow and let the market flash its intentions. For now my focus is on 1183/1200, and then we go from there once one side grabs the upper hand.



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 constitutinginvestment 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

6 Critical Money Making Rules