Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Indicators Oversold Suggest Imminent Corrective Rally

Stock-Markets / Stocks Bear Market Oct 18, 2008 - 03:36 PM GMT

By: Marty_Chenard


Best Financial Markets Analysis ArticleThis morning we will address two issues: Warren Buffett, and "Is the market trying to establish a short term bottom?

The first is the media hype on what Warren Buffett said about "buying stocks now".

Here are the excerpts of what the media is saying and posting:

"Warren Buffett said he's buying U.S. stocks and, if prices stay attractive, his personal investments, as distinct from his stake in Berkshire Hathaway Inc., will soon be wholly in American equities." ... "Exaggerated concern about the long-term prosperity of the many sound U.S. companies is foolish, and most will probably be setting profit records in years to come, Buffett said."

What very few media outlets are including in his statements is the following:

"Most major companies will be setting new profit records 5, 10 and 20 years from now." He also stated that he had little idea about the short term market direction.

#1: Don't get all excited by the media hype surrounding Buffett's comments. His time frame for being right is extremely long ... 5, 10, or 20 years from now. That is not a time frame that most investors can deal with. Twenty years from now, Buffett and I will most likely not be alive ... maybe I will, but I'd be 81 years old then.

#2: The Bear Market is not over ... we are in the beginning stages of a recession that will go on for months, if not for a year or more . The stock market typically starts its early turn around 3 to 4 months before the market finally bottoms out ... we are not there yet.

Now, let's move to today's chart and analyses ...

This is part of a chart that is posted daily on our paid subscriber site ... there are two additional indicators on our regular daily chart that are not shown.

This chart shows our MACD, a Relative Strength of 9 & 30, and the action of trend of the NYSE declining Volume ... all compared to the NYSE Index.

Let's discuss each indicator individually ..

First ... our MACD-C indicator. Note the red line and blue bars. When the red line is below the blue bars, the market has downside weakness. When the red line is above the blue bars, the market has upside strength. There is one important caveat to this ... and that is what is happening to the 30 C-RSI (Relative Strength). If the blue 30 RSI line is BELOW the zero line, then it offsets the upside condition of when the red C-MACD line is higher than the blue bars. In these instances, you normally get a sideways trading range in the market. Take a minute to observe the chart, and you will see that this is the reality.

Next, take a look at the NYSE Declining Volume ... I inverted its trending data so that it would track with the movement of the stock market. When the NYSE Down Volume is below zero and trending lower, more stocks are being sold in terms of aggregate dollar volume. That has a direct correlation to the distribution occurring in the market. Positive NYSE Down Volume correlates with selling pressure coming off of the market.

Currently, the C-MACD has not shown a red line crossing over the blue bars condition, so we haven't reached any safe upside (short term) yet in spite of Buffett exciting many investors about his announcement of "its time to buy".

On the short term, the Inverted NYSE Declining Volume is trending up. This means that the aggregate dollar volume of stocks being sold off is continuing to decrease. This opens up the possibility that the market is now trying to hold a bottom with enough investors having satisfied their selling urges. This creates the possibility for a short term upside bias in the market in the coming days or next week.


*** Feel free to share this page with others by using the "Send this Page to a Friend" link below.

Send This Page To a Friend

By Marty Chenard

Please Note: We do not issue Buy or Sell timing recommendations on these Free daily update pages . I hope you understand, that in fairness, our Buy/Sell recommendations and advanced market Models are only available to our paid subscribers on a password required basis. Membership information

Marty Chenard is the Author and Teacher of two Seminar Courses on "Advanced Technical Analysis Investing", Mr. Chenard has been investing for over 30 years. In 2001 when the NASDAQ dropped 24.5%, his personal investment performance for the year was a gain of 57.428%. He is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools.  As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL.  He is an advanced technical analyst and not an investment advisor, nor a securities broker.

Marty Chenard Archive

© 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