Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Stock Market Sentiment Plunges Further Still.....Price Action Weak....

Stock-Markets / Stock Markets 2015 Sep 24, 2015 - 12:43 PM GMT

By: Jack_Steiman


It's really amazing how fear ramps so much faster than froth ever could. Put a good scare into folks and they run for the hills faster than you can blink your eyes, or, for that matter, hit the sell button. Trust won't ever come back the way it had before either. It's been too long with the market going nowhere to down. Very few, if any, strong, sustained rallies, and after a while it becomes a belief that they'll never come any more, thus, of course, they will, but it won't be easy to turn people bullish any longer. They're scared to take any real chances, since they've been burned repeatedly over the past many, many months. So naturally fear took a turn down further after the rough action from last week. Two weeks back we were at minus 2.2%. Last week it went flat at 0%, but now we're back down, and this time it's minus 4.2%. The lowest reading in quite a long time, and the third week at, or below, zero.

Short interest as well is at record highs. Pessimism is on the rise, and that is music to the ears of those bulls who are left out there, but still not necessarily all it will take to possibly get back to those old highs. Since fundamentals are really poor, and seemingly only getting worse, it's sentiment that's saving the bulls from a full-blown bear market. That will likely have to wait until 2016 to get rocking in a much more sustainable way. Bull markets take a long time to end, and sentiment is such that another test back up is quite likely, but definitely no guarantee. All of that said, the market whipsaw to nowhere continues, but with a down-slanting slope in price. Sentiment should blast up at some point soon, but the market needs a catalyst we don't see at the moment to get it started. It'll come out of nowhere, but it hasn't shown itself quite yet. There are so many shorts in the market that the rally should be powerful, but timing it won't be easy.

In the end, it's all about price action, and, of course, how those oscillators react to it. As price has drifted down the oscillators have acted in a way that says the selling isn't for real, which is why you just don't want to jump right into the long side and let it ride. Oscillators have moved down with price equally in my eyes, thus it tells me that before I buy into the pessimism that's out there, it's safest to do so when we get the proper combination of bottoming sticks along with oversold conditions. If we throw in a positive divergence that wouldn't hurt, but we can, and probably should, bottom before testing down to the old low on the S&P 500 at 1867. While pessimism is screaming upward please remember how long it took for the market to fall, even with all the froth that was out there. That said, you can try to anticipate a bottom, but it's always best to get a gap down that hollows at the end of the day with strong volume meaning on balance buyers once we gap down at the open.

Bigger volume tells you some big money was involved, and, thus, makes it safer to test the waters. Nothing has been, nor will it be, easy from here on in, and possibly so for a year, or two, as the topping process bigger picture takes place. Again, a new high, or near equal high, is quite possible, but, of course, no guarantee. The right catalyst will cause a massive short covering rally, which unto itself can bring us up to the old highs. Short interest is currently that strong. All of that said, taking nothing for granted regarding price just because of the pessimism that's out there. Trying to front run the rally can be hazardous to your pocket. Let the right combination take hold on those oscillators and candle sticks, and then move in. Slow and easy all the way around. Have those constant chats with your pointer finger.

S&P 500 1965-70 are two areas of strong resistance, since approximately 1965 is the back test of the broken wedge, and 1970 is the 20-day exponential moving average. If the bulls can clear those two levels with a bit of force they have a chance to get to the next headache at 2009, or the 50-day exponential moving average. Nothing will come easily, of course, especially when you have two critical resistance levels so close together (1965/1970). A gap above is how that type of double-area of strong resistance gets taken out if it's going to happen. Don't force the game here folks. Itchy fingers can cause you harm. Whether you trade recreationally, or do it for a living, you have to approach it with the same discipline of risk/reward. Support comes in at 1903-1911, or recent lows on moves down. We can only take this one day at a time. Take it slow please. The game is not very safe here.



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!

© 2015

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.

© 2005-2019 - 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

6 Critical Money Making Rules