Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
SPX/NDX/NAZ Hit New All-time Highs - 27th May 17
GBPUSD Top in Place, GOLD Price Ready to Rocket? - 27th May 17
Silver Mining Stocks Fundamentals - 27th May 17
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

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

© 2005-2016 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

Catching a Falling Financial Knife