Best of the Week
Most Popular
1.RED ALERT: Paris Terror Attacks - What to Expect Next - STRATFOR
2.Paris Terror Attacks, Death Pangs of a Dying Religion, and Impact on BrExit EU Referendum - Nadeem_Walayat
3.Paris Terror Attacks, Islamic State Attempting to Spark Civil War in France - Nadeem_Walayat
4.Three Shocking Charts That Prove Gold Price Rally Is Coming - Sean Brodrick
5.Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - Mike_Shedlock
6.Africa Population Explosion - Why Europe's Migrant Crisis is Going to Get A Lot Worse - Video - Nadeem_Walayat
7.Gold Mining Stocks May Be The Buy Of The Century - Jeff_Berwick
8.Grandmaster Putin Beats Uncle Sam at His Own Game - Mike_Whitney
9.BRICS? No, CRISIS - Raymond_Matison
10.UK Housing Market Affordability, House Prices Momentum and Trend Forecast - Nadeem_Walayat
Last 5 days
Turkey Downs Russian Jet to Draw NATO and US Deeper into Syrian Quagmire - 28th Nov 15
Stock Market Quiet Week as Primary 5 Continues - 28th Nov 15
Black Friday, Weekend for Europe's Migrants - 28th Nov 15
HUI and Gold - Who's Leading Whom? - 28th Nov 15
Gold And Silver - No Ending Action, But End May Be Near - 28th Nov 15
Social and Cultural Distress Dividing The Nation - Fourth Turning - 28th Nov 15
Sheffield Houses Prices 2015, Best Estate Agents As Rated by Buyers and Sellers - 28th Nov 15
Stock Market Top Valuations, at a Critical Juncture - 27th Nov 15
The Top Shopping Opportunity on Black Friday - 27th Nov 15
Economics Is About Scarcity, Property, and Relationships - 27th Nov 15
UK Immigration Crisis Hits New Extreme of 336k Net Migration, up 32% on 2014 - 27th Nov 15
Vauxhall Zafira B Fire Danger Recall - What to Do Video - 26th Nov 15
Triggers In US Dollar Collapse - 26th Nov 15
Apple Stock is a 10-Year Short - Bear Market Environment - 26th Nov 15
U.S. Federal Reserve Rate Hike - 26th Nov 15
George Osborne's War on Buy to Let Sector Trending Towards Doomsday - 26th Nov 15
Will Turkey Drag NATO into War With Russia in Syria? - 25th Nov 15
George Osborne’s Autumn Statement and Spending Review Full Text - 25th Nov 15
Will Fresh QE From ECB Boost Gold? - 25th Nov 15
Sheffield, Yorkshire and Humberside House Prices Forecast 2016-2018 - 25th Nov 15
Investors Watch Out For The Auto Industry… - 24th Nov 15
BEA Revises 3rd Quarter 2015 US GDP Economic Growth Upward to 2.07% - 24th Nov 15
Stock Market Supports Are Being Broken - 24th Nov 15
Is Gold Price on the Verge of a Breakout? - 24th Nov 15
Fed’s Tarullo: U.S. Interest Rates Liftoff Should Wait for Signs of Inflation - 24th Nov 15
Silver Price, COT, US Dollar Updates and More - 24th Nov 15
UK Regional House Prices Analysis - Video - 23rd Nov 15
Crude Oil Swinging For The Fences - A 20 to 1 Option Play - 23rd Nov 15
US Dollar, CRB, Oil, Gas, Copper and Gold - The Chartology of Deflation - 23rd Nov 15
UK Regional House Prices, Cheapest and Most Expensive Property Markets - 23rd Nov 15
Stock Market Rally Losing Momentum? - 23rd Nov 15
Will Gold Price Drop Below $1000 Soon? - 23rd Nov 15
Gold and Silver Sector Big Green Light and Low Risk Entry Setup... - 23rd Nov 15
Limits to Economic Growth - Challenge and Choices - 22nd Nov 15
Long Dollar Trade and Current Copper Price Below Cost of Production - 22nd Nov 15
UK Housing Market House Prices Affordability Crisis - Video - 21st Nov 15
The Fed Has Set the Stage for a Stock Market Crash - 21st Nov 15
Stock Market Primary V Wave Continues - 21st Nov 15
Gold And Silver - Value Of Knowing The Trend - 21st Nov 15
UK Footsie Bulls Set To Foot The Bill - 21st Nov 15
UK Housing Market Affordability, House Prices Momentum and Trend Forecast - 21st Nov 15
GDX Gold Miners’ Strong Q3 Results - 20th Nov 15
End of Schengen, Stock Market’s Technical Strength Grows - 20th Nov 15
Justice for All and The Curious Case of Zambia - 20th Nov 15
Paris, Sharm el-Sheikh, and the Resurrection of Old Europe - 20th Nov 15
Silver Prices and The Management of Perception - 20th Nov 15
Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - 20th Nov 15
Waiting for Goldot Again - 20th Nov 15
Michael Curran Goes Down-Market Shopping for Gold Stock Winners - 20th Nov 15
Why Isn’t This Incredibly Bearish Bond Market Development Making the News? - 19th Nov 15
SPX Appears to have Stopped its Rally - 19th Nov 15
The Great Fall Of China Started At Least 4 Years Ago - 19th Nov 15
Using Elliott Waves: As Simple As A-B-C - 19th Nov 15
Has Deflation Been Ddefeated? - 19th Nov 15
Dow Jones Stock Market Index is Not Going to Crash - 19th Nov 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Reasons to Get Excited About Japanese Stocks

Stock Market Standing Still....

Stock-Markets / Stock Markets 2013 Feb 12, 2013 - 11:04 AM GMT

By: Sy_Harding


We're all waiting to some degree for this market to take the big spill lower. It will happen soon. It's only a matter of time before sentiment and the repeated overbought conditions catch up to the market. The problem for everyone, bulls and bears alike, is the reality of not being able to time this eventual plunge to unwind the sentiment issues currently at hand. We're not at extremes yet, so timing it is virtually impossible. If you've tried to do so from a bearish perspective you have had some rough times lately.

The bears have been fooled over and over again as they jumped in a first signs of overbought, especially when it got to extremes on many of those key index charts. And it did get to extremes when you think of how many daily RSI's got to over 80 on indexes such as the small and mid-caps. After some price unwinding, little price unwinding at that, which allowed the overbought conditions to go more neutral, here we are again trying for overbought, but this time also creating what will be negative divergences. At some point soon, as I mentioned above, the market is going to take a powerful hit.

However, knowing that's true, you have to stick with the trend in place until you get the proper reversal stick. If you want, you can sit on cash and wait for it, or you can keep some exposure, but be smart to avoid the super higher beta plays so as to not get hit too hard when the market sells a bit. There are many ways to go about adjusting to the times we're in, but the best way is to keep it light and to avoid the froth and high beta names for now. Whatever works for you is what you should do, but I'd be careful shorting too soon, especially if you want to get aggressive doing so. One up day can make the pain of too much shorting unbearable. Be wise. Go slow and adapt.

Markets find a way to hang in there when they're not ready to give up the trend in place. For instance, it's not able to break out in a given moment but will find an area to be bought in order to keep things moving higher or laterally. On the other hand, it'll also find places to sell so things don't get out of hand on the up side. We see buying in one area and selling in another. Today the buying was more in the world of financial stocks, while the selling took place in the retail space. There's always exceptions to both areas of the market, but most retail stocks struggles today while most financial stocks did just fine.

This is how the market cycle is about to keep the trend in place moving forward. With today's flat open, it didn't really provide the market technically with the type of candle sticks that say the uptrend is clearly over for the short-term at least. It may be, but there was no classic topping sticks. More of the buy one area and sell the other. No across the board selling with topping sticks we normally but not always see. The cycling hung in for yet another day so we have more watching to do so as to try and find a true topping stick that says we'll finally get the deeper selling the market pretty much desperately needs.

None of the classic events are taking place that signify the end of a bull market. Yes, a nasty sell off period is coming, but nothing thus far that suggests the bull market itself is in big trouble. Good news is still treated as good news. There is no massive selling volume at the tops of patterns once they sell off some. No massive negative divergences are in place.
In addition, the Fed is protecting with liquidity. Too many good things, especially the last thing mentioned with the Fed, to get bearish on the bigger picture at this time, so when this market finally snaps from overbought and sentiment, use that weakness over time to accumulate good plays. Find the best bases and patterns and play on weakness. Then use patience to reap the benefits of those set-ups on weakness. S&P 500 1494 is support all the way down to 1470. Moving averages, etc. We'll look for bottoming sticks when the selling kicks in.

For now, resistance up near 1525 is on deck for the bulls. Watch with patience and appropriateness. Keep it safe.


Sy Harding is president of Asset Management Research Corp., and editor of the free market blog Street Smart Post.

© 2013 Copyright Sy Harding- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Sy Harding Archive

© 2005-2015 - 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

Biggest Debt Bomb in History