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 Moving Down.....

Stock-Markets / Stock Markets 2011 Oct 04, 2011 - 02:48 AM GMT

By: Jack_Steiman

Stock-Markets

Best Financial Markets Analysis ArticleIs this a fun market or what! I know all of you have been enjoying the bear market ride for some time now. Well, maybe you haven't been enjoying it, but not getting caught up in it has to be fun to some degree? No? Ok, maybe I'm wishing too hard here, but thankfully, we've avoided a lot of the carnage since S&P 500 1370. Once the SPX lost a triple bottom at 1260 it was lights out. The market has never recovered from that, and likely won't be any time soon, although a strong rally is not too far off. The bear is here bigger picture, and that should never be lost in your minds, even when a strong counter trend rally ensues. A strong rally can make you forget what's really in control. The short-term can always cloud the bigger picture, so make sure you recognize what's at play. Don't get emotional. You'll want to, for sure. I can guarantee that.


Bull markets are more fun. We're not in one, and won't be for some time to come. That day will come again. Even though it may feel as though we'll never see it again, and, it is probably a long way out off, but that day will come again. The move down feels endless because we have spent eight weeks moving around a very large range. It's 1235 at the top on the S&P 500 and 1101 at the bottom. More on the pattern later on in this letter after what took place today. Even in this large range people wanted to be hopeful that things would not break down or that ultimately the worst was over and now it was time to explode higher.

The only reason the bear flag lasted so long was because of the extreme pessimism created by the 19% move lower off the top in only eleven days when things originally went to S&P 500 1101. Moving averages and gaps stopped all attempts on the way up and then came today. So yes, none of this feels good, and it shouldn't, but the fact that you're not getting hurt like the market is should make things, hopefully, more tolerable to you. Don't fight the market. Remember, things are never as bad as they could be, and today was yet another example of that. Adapt, or get knocked out of the game, is the way it is.

The number of sectors getting taken out and smoked is getting too large to count. The losses are anywhere and everywhere, and if you have anything to do with the economy, you're probably involved with massive losses and those breakdowns. It's an equal opportunity market. No real save havens as most would expect except cash. It's a no mercy market. Even some of the old stocks that hold up well in bear markets, like restaurant stocks, are getting hammered. Not all of them, but certainly a larger percentage of them. Much more than usual. A lot of them are very oversold, but are still not showing much in terms of finding a strong bid to unwind those oversold conditions.

Oversold is now staying oversold a lot longer than we're used to because we're in a bear market. In bull markets, the moment any time frame gets oversold, it bounces back hard and fast. Not now. Eventually they will, but many stocks with RSI's in the mid, or even low 20's, are having a hard time getting off the mat. They're spending many days sub-30 on the RSI, and once above often fall right back below once again. A lot of energy is building up for a strong rally, but the nature of oversold is very telling about where this market is in its evolution from bull to bear.

The ISM manufacturing report came out today thirty minutes into the trading session. It showed basically no growth with a reading at 51.6. Contraction is any number below 50. The last three months have seen readings of 50/50/51 meaning no growth, but also no recession. The market has to be a bit happy we're still not recessionary on this key report, but it can't be excited about no growth for a quarter of a year either, one would think. The market is showing its dissatisfaction with all the economic reports these days that, although they're not falling off a cliff, there really is nothing to get hopeful about either.

One more slip and we will be in recession. The market is unhappy about those prospects, especially after the way fed Bernanke talked last week. He said nothing positive about our economies short to mid-term. He said rates will be near zero for at least two more years. That's not sending a message of hope. Instead, that's telling the world that many stocks are still over-priced and need a haircut. They may need some big haircuts as well. If we get the big Jobs Report on Friday, and I can't imagine much positive coming from it. It may not be a disaster, and that's good, but if it's like today's ISM Report, it won't offer much in the way of good vibes either. And the market probably won't love it.

At the close of trading today, we saw a move a hair below 1101 with a close at 1099 on the S&P 500. We are visiting the old lows that began this bear flag. If we can't get back through 1101 quickly, a move down to 1050 or the 1070 area is likely. We're getting very oversold on most leading stocks with the index charts not too far behind. So I'll be in the search for a bottoming stick below 1101, which is what I've been hoping for. This bear market, bigger picture, likely has a long way to go before being over. Get used to it. Rallies should not be held longer-term as if we're in a new bull. The rallies, when they occur, can be very emotional as most want a bull market to be part of their lives. But I don't see it that way. The bear isn't going to be letting go any time soon, so hang in there and adapt.

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!

© 2011 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