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
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Large Tech Red Flag.......

Stock-Markets / Stock Markets 2012 Sep 11, 2012 - 02:27 AM GMT

By: Jack_Steiman


You wait for a moment that tells you it's likely you're nearing a short-term top, and today, we possibly saw that top as the market went after stocks it hasn't touched in months, and it nailed them in a very big way. Apple Inc. (AAPL), the leader of all leaders, was crushed to the tune of $18, while others were nailed with long tails off the top. Stocks, such as Google Inc. (GOOG) and (PCLN) just to name a few. We know we have a negative divergence on the S&P 500 daily chart, so you know it's coming at some point. Not only were some of the best froth stocks hit, but other stocks you don't see get hit very often took it on the chin a bit today.

Stocks, such as The Boeing Company (BA) and 3M Co. (MMM) are two powerful Dow stocks. The Dow has joined its brother, the S&P 500, in flashing a negative divergence, so we have to be very careful here. When those negative divergences kick in, you often see leaders hit hard, such as I mentioned above. None of this means the stock market is about to get destroyed. I don't think it will. There will be plenty of up days, but I do think it will be very difficult for the bulls to get any sustained upside action for a while. Not forever folks, a while. Because the overall trend is higher, shorting won't be easy, but there may be a time, or two when some shorting can be done. Probably the most important message you can take from today is that it won't be easy for a while for the bulls, so you want to move very slowly with regards to new plays. Nothing aggressive right now is the way. Loads of cash is your best friend.

It's healthier for a market to sell off, or at least struggle for significant upside, if it gets too overbought. The charts tonight will show the overbought daily charts and how those 70 RSI's can be the place where rallies go to die for a while. Again, that's healthy longer-term as it resets things and more importantly, a struggling market allows for some real pessimism to come back in as traders get frustrated with a market that can't sustain gains for any length of time. When markets sell or struggle, pessimism creeps in quite quickly. It would be great to see those RSI's on the daily charts get into the lower 50's, or better yet, into the 40's, or possible at, or near, oversold as they approach 30.

Some leaders, such as those mentioned earlier in this report, are really up there with very elevated oscillators across the board. They can't, and won't, stay there forever. A few weeks off to reset way down would be just perfect for more aggressiveness with buying new long positions. We are at a point where we're simply a bit too happy with things and the markets job is to make the masses unhappy. I think that process may be under way, but remember, folks are programmed to buy weakness, so it won't be an easy move lower. Probably a choppy stair- stepping move lower, but you have to be open so some deeper selling if it should hit.

Two major events are upon us this week. One is the announcement of a new product from Apple, with the other being the usual meeting from Mr. Bernanke. The market will be tuned into Apple to see if it likes the announcement, but it may want to sell it no matter what they say. It'll be very interesting to see how the market responds to it. It will be far more interesting to see how the market responds to Fed Bernanke. I still don't believe he will give QE3 quite yet. I think that only comes if the market starts to sell hard and begins to lose key support levels across the board. We'll watch closely as to how the market deals with the news from these two events to give us more insight, but either way, I think for now, all of you need to play far more defensively.



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 15-Day Trial to!

© 2012

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