Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21
Scan Computers - How to Test New Systems CPU, GPU and Hard Drive Stability With Free Software - 4th Jun 21
Hedge Funds Getting Bullish on Gold - 4th Jun 21
THERE ARE NO SOLUTIONS When the Media is the VIRUS - 4th Jun 21
Investors Who Blindly Trust the ‘Experts’ Will Get Left Behind - 4th Jun 21
US Stock Market Indexes Consolidate Into Flagging Pattern – Watch For Aggressive Trending Soon - 4th Jun 21
Microsoft (MSFT) Stock Trend Analysis - 3rd Jun 21
No More Market Bloodbath – Beyond Cryptos - 3rd Jun 21
Bank run, or run from the banks? - 3rd Jun 21
This Chart Shows When Gold Stocks Will Explode - 3rd Jun 21
The Meaning Behind Gold’s Triple Top - 2nd Jun 21
Stock Market Breakout Or Breakdown – What Does The Next Big Trend Look Like? - 2nd Jun 21
Biden’s Alternate Inflation Universe - 2nd Jun 21
What You Should Know Before Buying Car Insurance - 2nd Jun 21
Amazon (AMZN) Stock Summer Prime Day Discount Sale - 1st Jun 21
Gold Investor's Survival Guide - 1st Jun 21
Silver and Copper to Benefit from Global Electrification Push - 1st Jun 21
Will Gold Shine Under Bidenomics? - 1st Jun 21
Stock Market Buy the Dip, Again?! - 1st Jun 21
Stock Market Consolidation Ahead - 1st Jun 21
Stock Market Summer Correction Review, Crypto CRASH, Bitcoin Bear Market Initial Targets - 31st May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Another Red Flag...

Stock-Markets / Stock Index Trading Sep 10, 2009 - 02:33 AM GMT

By: Jack_Steiman

Stock-Markets

Best Financial Markets Analysis ArticleThe fun stuff is going to end at some point folks. These negative divergences on the big leaders is going to kick in big time some day. Now? Months from now? My guess is, not yet, but we are seeing signs.

Look at the chart of Apple Inc. (AAPL) tonight. Look at that bearish engulfing stick today off of yesterday's gap up. Look at that massive negative divergence. One after the other on each new high. Same can be said for all the big cap leaders.


One after the other on each new high.

Like clock work. Set your timer to it. New high price, lower high MACD. The market is getting more and more dangerous. This doesn't mean we won't see new highs. Not one bit. Probably will. Just start grasping on to this reality, every new buy is dangerous but you can't short yet because we have not taken out any significant support levels and have not had that reversal bar that says enough froth is enough froth.

With 1018 gap and the 1010 70-week moving average support under current price, you just can't say now I'm just going to short aggressively, or even at all. You have to play the long sideuntil we get a signal change. Simple as that. Every time it looks like it's finally upon us, it isn't.

However, the reversals again today off another negative divergence on the daily charts on stocks like Apple Inc. (AAPL) tell us to keep things light. NO full portfolios. NO long term portfolios. We probably go higher still, but the trouble signs are increasing one by one. And it's not just AAPL or other leading stocks, in some cases it's leading sectors.

Look at the chart of the Financial Select Sector SPDR (XLF) or the financial ETF. What a horrific MACD and negative divergence on that daily chart. Does it mean it can't grind higher? Not at all. It can. However, hold your breath if you're buying it and pray real hard. The buy weakness mentality is still out there in full force. Some day it won't matter. Just recognize that there are increasing risks and dangers out there. AAPL and the XLF tell me that the risks are definitely increasing in a big way. Let's hope the market decides to hang in there a while longer for those too aggressively long but you never know. I do think they will but you get the idea. Easy does it.

We started higher yet again today, right in to the teeth of overbought, as the economy received good news on housing. Applications increased 17% thus the futures reversed quite nicely out of the red and in to the green. We jumped up a bit at the open and watched the bulls move things higher as the day wore on. Little fight from the bears as usual.

Then we saw what I wrote about above. The big cap leaders such as Research In Motion Limited (RIMM) and Apple Inc. (AAPL) began their rollovers and the markets came down off their highs, although I wouldn't exactly say things fell apart. Pulled back off the top would be the best way to describe things.

There was enough money rotating around to keep the market from falling too hard off the highs for the day thus the reality of not getting too bearish too fast quite yet. That day will come but not yet. Let's see how the market sells or not now that it seems intent on trying to unwind finally from overbought. It can stay overbought and sure seems to want to. A little selling first would be best.

I am getting an enormous number of requests about playing the gold trade. It is a very popular trade. When should I get in? What's the perfect support to buy in to? These are scary questions when it comes from too many people. I'm not saying not to get in. Do so if you feel you must but this is becoming a very crowded trade and makes me nervous.

Being on the same page with the masses always makes me feel like I'm on the wrong side of the trade. The last time it worked for a while was 1999. We know what happened after that. Maybe gold goes to 2000$ an ounce and SPDR Gold Shares (GLD) and all the other gold stocks explode higher. If you feel you should be in the trade, then by all means do so. I can't participate under these conditions. Please be careful and if you do enter, don't be greedy and keep stops tight.

The market remains on an overall buy signal. Risk is increasing but you have to remain on the side of the signal in place. It's not easy and I respect that fully. My best guess is we extend to new highs over S&P 500 1039 soon, but I wouldn't go out and celebrate it. Important support, the most important short term support, is S&P 500 1018 down to 1010. As long as that confluence of support holds, and my guess is it will short term, then we should see new highs of some type before this all comes tumbling down. Please don't overdo it. There is risk and it's increasing. Longs are appropriate but not 100% in.

Peace
Jack Steiman

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 30-Day Trial to SwingTradeOnline.com!

© 2009 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.

Jack Steiman Archive

© 2005-2019 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