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
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
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 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

Now The Stock Market Bears Need The Gap-And-Run Day......

Stock-Markets / Stock Markets 2014 Mar 27, 2014 - 10:16 AM GMT

By: Jack_Steiman

Stock-Markets

So now that the bears finally have froth below the key 50-day exponential moving average on the daily, there is just one ingredient missing from taking over this market for the short-term. You all know what it is by now, but here's the refresher. A large gap down that runs lower for the entire day, with a close at, or on, the lows for the day. If they can accomplish this then they will have put technical damage in to this market, and they will have also put the 50-day exponential moving average on the Nasdaq in the rear view mirror.


Just because they closed the Nasdaq below those 50's today doesn't mean all that much, because we all know how fast the bulls can take it back. The bears are desperate for that gap down that sticks. They don't need a gap down that hollows out. One that sticks. Step on it. Crush it. Keep it down all day, and don't allow the bulls to breathe. If, and what an "if" that is, they can do it. They are in business and will be in control. They haven't been able to for what seems like forever, although trusting them isn't easy to do. I wouldn't, because the onus is on them to do something that has been out of their reach for a very long time. Show me time is upon them. They have their chance. It's time for them to seize on it. We shall see what tomorrow brings.

The day began much as every day begins for this market. A gap up across the board. But as of late the trend has been to sell the gap ups, even if we close green for the day. It has been much tougher to sustain upside. The Nasdaq led down as usual with those oversold froth stocks getting a nice bounce early only to see those bounces turn in to some very ugly losses and nasty candlesticks. The Dow and S&P 500 soon gave up large gains and began to follow lower. This was the type of day that could mark a major top for a while as key levels were lost.

After so much gap up attempts it seems it's time for the bears to try their luck. Today's action printed some nasty daily index candlesticks. That shouldn't be ignored. Yes, some individual stocks had bad ones as well, but when the index charts flash these types of sticks it's something to respect. Today was an overall bearish day off the morning gap up, thus it's time to be in protect mode. Avoiding froth at all costs. They will have strong bounces, and it's hard to argue that they are more than due for one, but their trends are lower overall.

With weekly charts flashing nasty negative divergences, and with monthly charts being very overbought, along with sentiment showing far too many bulls over bears with a 37.2% reading, it would be great if the market actually did continue to fall for a while. It would unwind the oscillators nicely. But more importantly, it would unwind sentiment. Get those bulls to hate life in the market and swing to bearish. If we keep going higher it's really unhealthy. It would be best if we sold for a while. It doesn't have be a slaughter.

It can be a gradual, grinding unwinding of price and oscillators. That would be more than enough to get the job done. Whatever it is, it would be best to at least stop grinding higher for a while. If the bears can now get the S&P 500 below its 50's at 1840, it would be great for the unwinding as well. This won't be easy, but at least we have taken the 50's away on the leading froth area of the market. Lots of cash is a good thing here.

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!

© 2014 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