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
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Volatility Soaring....Whipsaw....Down Bias For Now.....

Stock-Markets / Stock Markets 2014 Dec 18, 2014 - 10:59 AM GMT

By: Jack_Steiman

Stock-Markets

Volatility is soaring and traders are suffering. Too difficult to play with massive whipsaw moves intraday just about everywhere, but with the trend still clearly lower for now. When the VIX is in the low teens it's easy on the soul, but when it rockets in to the lower 20-range, things can get very intense. You can barely keep up with the score. You blink and the S&P 500 moves five points. You blink again and it's another five, and so on. The range for the day across the board on all the key-index charts can give you motion sickness. Huge drifting. This is when markets become too difficult to put the finger on the buy or sell button. It becomes luck trades and that's not what you want to be doing. It can work, but Russian roulette is better used somewhere else.


So volatility was soaring and it too was whipping all over the place. This all began when the markets recently topped out. 50-day exponential moving averages disappearing on the key-index daily charts. The S&P 500 now clearly below, thus, those 50's are now resistance on rally attempts. 2019 the level. Bears get more aggressive when those 50-day disappear and we saw that big time today when the futures were up pre market. The S&P 500 tested to those 50's and died right there. A few attempts to get back through were wiped out quickly enough. The bears showing they won't be scared away as easily as in the recent past. So today was another down-day, but things are getting very oversold now on the short-term charts, so we should expect some type of rally shortly. The VIX should signal that moment.

What's the best way to hurt the masses? The market can be very nasty sometimes. It can show you one thing one day that says things are very bullish only to twist it around shortly, thereafter, and take down the masses. That's seen best in the behavior of the financial stocks. A very long-term base finally broke out with Goldman Sachs Group, Inc. (GS) leading the way. The breakouts across the board held for many days which often signals the coast is clear. The other side of the trade is done. The bears pulled out the rug on the financial bears, and we are now seeing all those stocks lose the base breakouts. Very nasty action there.

When breakouts fail it doesn't mean it's done for good but it can signal a longer period of failure to be sure. You can go from breakout to breakdown rather quickly. Let's hope those bases hold, but if they don't things could get very ugly not only for those stocks, but the entire market since the financials are heavily weighted and can lead lower. Many other sectors are showing topping action. The Market Vectors Biotech ETF (BBH), or the biotechnology sector, doesn't have the very best looking oscillators on its daily chart. MACD crossing down from high levels with a gap down to act as resistance. If more and more join in the selling can get much worse, so let's take it easy from here for a while, until the VIX signals the all clear for a little while. The market is showing its dark side these days. Respect it.

All of this is great for sentiment. There is always an upside to things when the market falls. The bull-bear spread is hopefully at, or below, 30%. It has been at, or very above, 30% for ten straight months. That's terrible. The market is paying a small price right now. Another bad week here and we could see mid-twenty readings. Hopefully, even lower, but it's good to have the spread out of the 40's. We stay out of the way here knowing 2019 is going to be very difficult resistance on any counter-trend rally attempts. The lower the better for the short-term, but we are very oversold, so we can rally at any time.

Be smart and keep things very light all around. 1941 next support on the S&P 500, if we can't get back through 2019.

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