Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Stock Index Trend Trade Setups for the SP500 & NASDAQ - 22nd Jan 18
Stock Market Deceleration / Distribution - 22nd Jan 18
US Markets vs Govt Shutdown: Stock Markets at all time highs - 22nd Jan 18
Land Rover Discovery Sport - 1 Month Driving Test Review - 22nd Jan 18
Why should you use high-quality YouTube to mp3 converter? - 22nd Jan 18
Silver As Strategic Metal: Why Its Price Will Soar - 21st Jan 18
Stocks, Gold and Interest Rates Three Amigos Ride On - 21st Jan 18
Why Sometimes, "Beating the S&P 500" Isn't Good Enough - 21st Jan 18
Bunnies and Geckos of Sheffield Street Tree Fellings Protests Explained - 21st Jan 18
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Caution for Stock Market Bulls and Bears

Stock-Markets / Stock Markets 2013 Jun 02, 2013 - 11:57 AM GMT

By: Michael_Noonan

Stock-Markets

The market is undergoing a correction, but it is enough to call it a top? No. More evidence is required before saying that the Fed has thrown in the towel. If it takes more fiat to keep prices inflated, it will be provided. The alternative would be too painful for investors, [not of concern for the Fed], and too embarrassing to admit to the fraud of QE-Infinity to keep the bubble intact.


The stock markets are the antithesis to gold and silver. The latter have an insatiable demand, as price has declined. The former is void of demand as price has risen to all time highs. The Fed has driven what participants there are to the markets because there are no viable "earning alternatives" to match "rising" stocks. The Fed has chosen to destroy retirees and anyone else seeking gains in interest bearing instruments as a vehicle for income in its efforts to keep the market [lie] alive.

Just as there has been demonstrated manipulation on the Precious Metals, via naked short selling that has no intent of ever delivering what was sold, [anyone else would go to jail for the practice], the same holds true for the stock market. So how valid are the charts? They are all we have, so they must be judged based on what they show. At some point, the reality of [lack of] supply and [false] demand will prevail. All anyone can do is read developing market activity, for it tells the most accurate story of who is winning the battle, and ultimately, the war

Here is what the charts say...

The starting point is to give recognition to the most important element in reading and understanding any chart, in any time frame, and that is the trend. Trends have a proven tendency to persist, and when a trend stops, it takes time to turn it around. There are always signs to act as a guide.

Since the 2009 low, price has been in a steady up trend, with a few corrections along the way. Corrections are a natural and healthy reaction within any trend. What we see for the month of May, [new highs], is a mid-range close. The market's message from that kind of close tells us that sellers more than met the efforts of buyers at the upper part of the highs. The current unfolding decline ran out of month before finishing, so we must deal with what is, as just described, for it could have been worse.

Yes, yes...woulda, coulda, shoulda; just stick with the facts as they are. The trend is up, and there is not enough evidence to say a change has occurred, or even may occur. The higher monthly time frame is more prevailing in effect than lower time frames, and it always makes sense to keep this in mind.

The weekly time frame supports the trend of the monthly, up, and shows no sign of any change, at least none that would warrant going against it, at present. The last two swing lows show how long they took to correct, and how many points in each decline, before resuming the up trend. Volume has increased over the last two weeks as price declined, and using close stops, or simply taking profits, in individual stocks makes sense, but the Fed Bubble has not yet burst, based on the current chart structure.

The daily is the most sensitive to change of the three time frames covered. Even here, one has to respect past activity, like the April correction, and the market's ability to recover and rally to new highs.

We can say that the trend is still up overall, but presently trading sideways. More price development is required in order to determine the character of the present correction. If this market is turning, and existing evidence does not support that conclusion, yet, we will be able to assess the quality of the next rally, as it unfolds, and make a more informed decision. We stress "as it unfolds" because there is no reason to "predict" or get ahead of the market until it tells us, beyond doubt, its intent.

If volume picks up on the next rally and closes are strong, overall, then we can expect higher price levels. If the developing price activity is weak, as in lower volume on rallies, poor closes, increased volume and greater ease of movement on declines, then we put ourselves in a position to be in harmony with the current trend development.

The track record of those who have been "predicting" a top and shorting the market while in an uptrend is very poor, so picking tops is not a profitable endeavor. Let the market reveal its message, and then follow along.

For right now, the message is one of caution, for both the bulls and the bears.

By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - 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.

Michael Noonan Archive

© 2005-2018 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

6 Critical Money Making Rules