Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Sandy Stock Market Correction Continues....

Stock-Markets / Stock Markets 2012 Nov 03, 2012 - 09:05 AM GMT

By: Jack_Steiman

Stock-Markets

While the market didn't lose much in terms of price, it's still in its correction as evidenced by the back test of the 20- and 50-day exponential moving averages today that saw selling off those key resistance levels. They were both strong support levels not too long ago, but they have now turned into strong resistance levels. All of the key sector, index charts tested those levels today only to see the sellers come marching in to take things back down. This selling came even after we were up early on due to the better than expected employment report that came out one hour pre-market. There were 171,000 jobs created with expectations at 125,000. The futures shot up on this news allowing for a gap up open, but it didn't take long for the selling to come back in and take things into the red across the board.



Nothing horrific, but we did see all of the gains go away, which is classic in a short-term, down-trending market. What I mean by that is not even good news can help very much when a market has a destination in mind. It's no different when things are good for the market. No amount of bad news can spoil the party. Now, even good news gets ignored as the down trend continues onward. Again, nothing out of character, but a trend is a trend and will go where it planned on going until it's finished. It will upset the masses and confuse most. That's the whole point. So this week saw some rally attempts, but in the end, those 20's and 50's held the move up, which can't be considered unusual by any means. The bears still in control until the bulls can take back those lost 20's and 50's. That's the bottom line folks. Those 20's and 50's are now the wall for the bulls, thus, the onus is on the bulls to get the job done just like the onus was on the bears to remove those levels. They spent a lot of time trying but kept failing. Now the bulls are trying and, for now, they are failing.

Sandy did something to the stock market that hadn't happened since 1888, and that was to shut it down for two days. I live at ground zero and must say I can't even grasp how it opened after only two days. I guess some places get special attention. There are people in that area that won't have power for what turns out to be one to two weeks. Anyway, Sandy did play havoc with the market in terms of keeping it closed, but now we turn our focus to what it will do to the economy in the months ahead. The market understands that many businesses will suffer great losses due to the storm, so I have to believe some of that will be built in by the time the next earnings season appears in three months.

However, we can't fully grasp what those affects will be. It is possible that Sandy will help push back down to contraction regarding manufacturing. Let's hope this isn't the case, but since Sandy comes around these parts roughly once a century, the affect are still to be seen over time. The market handled it without too much downside stress short-term, but the longer-term affects will only be known in the months down the road. Let's hope things aren't as bad as the potential would suggest.

Time. Patience. Two words that most stocks market players don't want to hear, and the biggest reason why most don't survive the game. This is a big casino. Nothing more and nothing less. When you're in a casino you want to play. I mean, think about it, why else do folks go there? To play! To play hard in most cases, but always to play often. It's no fun sitting on the sidelines. It's no fun not being involved. The stock market is just as tough to ignore. It's fun. It offers up possibilities. Folks want in. Problem here is there isn't much to be in now. If you over play here you are going to suffer huge losses unnecessarily and then you'll get turned off to the game completely. Learn how to be patient. It's part of the game. If you can be patient it'll pay off big time down the road. Remember, time moves on. Don't make mistakes that cause you harm for no reason. Be smart and be patient for now. You'll be glad you did.

Apple Inc. (AAPL) continues to crater hard, since their earnings report have not gone well for that stock. When I saw those folks on CNBC some weeks back saying it can't go down, I had the feeling that the kiss of death had been planted on AAPL's face. The weekly negative divergence is playing out to the tune of losses off the top of roughly 120$. They all get hit in time, but the focus is on AAPL here because it's the market leader, and thus, we must look for a classic bottoming stick in the days and weeks ahead to get a sense that the selling is basically over. Unwinding is occurring quite rapidly here, and it's exactly what the market needed. There can be more selling. If the S&P 500 break below 1403 we can see 1375. Under no circumstances would that be bearish technically. No guarantee we'll get there, but it's still very much in play. Next Wednesday we'll get the next set of sentiment numbers and they should be working in favor of the bulls. We shall see.

In the meantime relax and keep things very light.

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 15-Day Trial to SwingTradeOnline.com!

© 2012 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