Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Violent Whipsaw Continues....

Stock-Markets / Stock Markets 2013 Jun 18, 2013 - 03:43 AM GMT

By: Jack_Steiman


It was a very, very wild day today. We saw weak action late on Friday. It figured to mean we'd likely see lower this morning in terms of those pre-market futures. Sometimes you get a clue from how a day closes and what takes place on the futures right away after hours. We saw the weak close and the futures move down some as well. So today would be weak for sure, right? Wrong. Strong futures simply got stronger as the morning went along. We blasted higher once the marked opened, and then things got very interesting. We kept running higher. The first two sixty-minute sticks suggested the market would hold up for the day. That reality lasted until we saw the 2pm hour hit.

Things started slowly, and then not so slowly, to deteriorate, the Dow dropping by roughly 140 points off the highs. It seemed as if the market was doomed, right? Not wrong again are we! The market rallied up, and actually closed above the morning gap-up levels by twenty-five cents on the SPDR S&P 500 (SPY) and three points on the Nasdaq. A really poor finish would have had those indexes close with black candles, meaning they closed lower than the gap-up open. The bears had their shot. They looked to be in the clear with an hour to go, but they just couldn't get the perfect candlestick close. It wasn't a powerful close by any means for the bulls either, but they were at least able to capture the gap-up opening prices with a finish slightly above those opens. The normal whipsaw for this type of market continued throughout the day playing constantly with the emotions of both sides of the coin. Bulls and bears alike felt good at certain times today, but in the end, it was the bulls who prevailed, although barely.

The mood of the market, as we all know by now, really swings about hard from day to day, if not, at times, hour to hour. The market has struggled for consistent upside these past many week, and we have seen the bull-bear spread move beautifully for the bulls as they have diminished in numbers as the bears have increased in size. Pessimism is growing. We see how that even up-days now hold more of a bearish emotional tilt. All day we were over 1.0 on the put-call readings, folks looking to short all the time now. Suddenly, no one is believing in this market any longer.

It wasn't one month ago that folks thought it couldn't fall. It doesn't take long does it for the dial to turn. The Dow up at one point today was nearly two hundred and yet put-call readings at 1.0 or higher. Amazing! So funny to see how things turn for the average trader. Give me what I want all the time or I'm taking my glove and going home. I'm switching sides. Sentiment is really turning well for the bullish case. It may take a while longer. We made need one more swoon down at some point soon, but the damage is being done against the bearish case due to the turnaround in how folks are viewing things. They're getting more and more pessimistic all the time, and that's great news for the bulls longer term.

Today we saw rotation continue as the cyclical's and the transports struggled and lagged badly. The transports haven't lagged much, but even with that struggle the markets, they held up very well. Once again, money finding a home when it needs it. That may or may not hold up, however, after we get the big news from the Fed Bernanke this Wednesday, things will get really interesting. The Fed will announce his usual speech on the state of the economy and whether he will continue to send liquidity through the system each and every month at the rate he has been doing so far. There are rumblings out there that he will lighten up on the free cash. I do not believe that will be the cash one bit. Not even a chance as he has said over and over that this won't happen until we sustain job growth for higher paying jobs.

Right now, the economy is only creating lower end jobs with a heavy majority of job creation coming from the part time variety. This is not what he wants to see, and thus, I believe he'll keep the cash coming. The market may need another pullback, even if he gives the right news, but if he does, getting sustainable downside action will not be easy at all for the bears. Patience is key but some exposure is appropriate. Buying weakness is best.



Jack Steiman is author of ( ). Former columnist for, 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!

© 2013

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 - 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