Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
Rome Wasn't Burnt In A Day - 24th Apr 14
When Does Government Policy Become Criminal Behavior? - 24th Apr 14
The Great Recession Grinds On - Measuring Misery around the World - 24th Apr 14
Apple, Facebook Beat Expectations - Stock Markets Long-term Recap - 24th Apr 14
Broad Stock Market Situation on the Remains Tense as Companies Release Quarterly Earnings - 24th Apr 14
How High-Frequency Traders Use Dark Pools to Cheat Investors - 24th Apr 14
Stock Market Bears Wrong Again, Apple to Push Dow to New All time High - 24th Apr 14
Gold Prepared for the Attack of the Short Sellers - 24th Apr 14
Weak U.S. Housing Data Supports Euro - 24th Apr 14
Killing the Maximum-Wage Myth - 23rd Apr 14
U.S. Quarterly Economic Review - Optimism at the Fed - 23rd Apr 14
Why Mohamed El-Erian Left Pimco - Video - 23rd Apr 14
QE Is A Fraud Perpetrated By Made Men - 23rd Apr 14
Gold and Miners Outperform Once Again - 23rd Apr 14
G-20 and the US Tell the Bank of Japan to End Quantitative Easing - 23rd Apr 14
How to Get in the Trading Game and Profit - 23rd Apr 14
Fed Follies, U.S. Housing Market Fiasco - 23rd Apr 14
What Will December 31, 2014 Financial Headlines Look Like? - 23rd Apr 14
Why Gasoline Prices are Surging Again - 22nd Apr 14
Cold War 2.0 - 22nd Apr 14
The JIS – Junk Ideology Syndrome - 22nd Apr 14
How to Avoid Losing All Your Money - 22nd Apr 14
Silver Up, Stocks S&P Down - 22nd Apr 14
U.S. Mainstream Media Propaganda Setting the Stage for War With Pakistan - 22nd Apr 14
U.S. Interest Rates are NOT Rising! - 22nd Apr 14
A Crisis vs. the REAL Crisis: Keep Your Eye on the Debt Ball - 22nd Apr 14
Bitcoin Implications of Lack of Price Action - 22nd Apr 14
Japan - The Twilight Of The Rising Sun - 22nd Apr 14
Is This What a Credit Bubble Looks Like? - 22nd Apr 14
The Dark Side Of The Silver Mining Industry - 21st Apr 14
Strong U.S. Dollar Rally Could Pull Rug From Under Gold and Silver - 21st Apr 14
Silver Feeble Rally Fails to Hold Breakout, Falling Back Towards Support - 21st Apr 14
Stock Market Smart Money – All Out or More to Go? - 21st Apr 14
Fast Rising Pump Prices Counterattack - 21st Apr 14
Extreme Climate Change And Life On This Planet - 21st Apr 14
Gold and Silver Stocks Sitting Tight - 21st Apr 14
Stock Market Minor Correction Imminent - 21st Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stock Market Standing Still....

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

By: Sy_Harding

Stock-Markets

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.

Peace,

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

© 2005-2014 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

Free Report - Financial Markets 2014