Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Late Selling..... Not Anything Terrible

Stock-Markets / Stock Markets 2013 Nov 19, 2013 - 10:26 AM GMT

By: Jack_Steiman

Stock-Markets

It wasn't anything terrible, but it did come from some nasty looking MACD's on those daily-index charts. When studying them we see that they are making lower highs on the MACD's while printing higher highs in price. The small-cap stocks and Nasdaq look particularly poor, although with this market who knows if they'll ever play out, but you can't like what you see when looking at those charts. Add in the poor readings on sentiment and the combination, one would think, would bring about a fairly reasonable pullback, but who knows for sure. The market has been so strong it's hard to bet against it but you need to be safe when things show themselves and with today's reversals it seemed appropriate to raise some cash.


Certainly this is NOT the time to be overly aggressive to the long side, even though it seems the market can't fall. It's when it feels that way that it often happens but again, who knows. Just recognizing higher-risk moments are very important to your trading for the short-term. Because we're in a bull market you don't want to get overly aggressive to the short side either. We know how that's worked out for those who have been trying that trade. The market is likely saying it could use a little rest. Maybe it won't, but I have to say today's late action suggests to take it slow and easy time with longs and shorts. Lots of cash would not be a bad thing at all.

On Wednesday's, and sometimes late on Tuesday's, I can get those bull-bear market-spread results. We had a solid up-week last week after three weeks of basing. Before the week began we had a reading of 37.1% bulls to bears, bears at a very scary reading of 15%. That's historically extremely low. Did it move down to 13 or 14%? That would be unprecedented. Are the bulls rocking up towards 60%? Is the spread at or over 40%? All of these are critical for this market and, thus, I can't wait to get those numbers. At 40% on the spread it is a sell signal, but we have seen readings get in to the low 40's in the past, but rarely, if ever, seen bears at only 15% and now possibly even lower than that.

The rubber band is stretched folks. The market could use some selling just to unwind those longer-term weekly and monthly charts, let alone the daily charts, which would work off those poor divergences in place. Getting new plays with potential bad divergences and bad sentiment numbers isn't smart so for all our sakes, maybe we can get silly numbers on the spread that'll take the market down some and allow things to unwind, which would be very healthy. We'll know late tomorrow or on Wednesday. Stay tuned.

The breakout at 1775 is now strong support followed all the way down over time to 1730. Truth be told, as long as 1730 holds we're in good shape. If we ever lost 1730 then we'd likely be headed for a very serious correction. That is always possible even though it feels impossible. When markets go higher, and rarely correct, it feels as if it never will, but we all know how fast things can turn. In the past, when things got very stretched, I can promise you, it felt that way. No way we can fall, and then it gets hammered out of nowhere and doesn't come back.

I'm not saying that's what's on deck here, but just watch support levels and see where this all goes. The bigger correction may not come for many months. Who knows, but the risk is out there thus we watch key support levels. 1775 is first up on the S&P 500. Let's see if the bears can even get that to happen.

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, 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 SwingTradeOnline.com!

© 2013 SwingTradeOnline.com

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 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