Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Nails On The Chalkboard....

Stock-Markets / Stock Markets 2010 Dec 21, 2010 - 03:43 AM GMT

By: Jack_Steiman


No one likes that sound. Makes you cringe. Makes you scream and cover your ears. It's just not pleasant. That's where we are now. An unpleasant grinding market that refuses to change its stripes. It refuses to pull back and reset those oscillators, but at the same time it's constricted to the upside. Markets do not blast higher, even in retail market days such as these are at holiday time, when you're this overbought. There's just not enough fuel in the tank to allow things to launch upward and out in to a new leg of this bull phase we're in right now.

There has been no recent catalyst to take this down, yet sentiment keeps getting more bearish from the perspective of too many bulls around. The spread is nearing 40%. At some point in that spread the market won't need a catalyst. The market will fall from all the bulls being in. So we wait for that moment for the market to snap, but there's no way to predict when that moment will come because there is nothing more than overbought to get this market to sell down. It's coming, but could wait until the year is out as the big money is sitting on the side lines for now waiting for the retail trade to disappear once the holiday season is gone.

You see this in the very light volume traded just about every day. There is, generally speaking, no volume worth talking about. That's classic Christmas action. So for now, we move slightly higher just about every day with the risk still on top of us because we just don't know when the sentiment will snap things for a more powerful move lower to unwind the daily chart oscillators.

One constant on the street these days is the solid earnings reports that are coming in day after day. There are disasters out there, but that's always going to be the case. Overall, however, the majority of company's are reporting better than expected numbers, and on top of that, they are raising expectations for the future. This process would have to reverse quite a bit for this market to leave its current bull phase and move in to a new bear phase.

The market is ultimately all about earnings. As long as that's holding on well then the bull phase would remain in effect, even if and when we see 5-10%, or greater, pullbacks in time due to sentiment. Strong pullbacks are often confused with a bull phase ending. That's where things get confusing. Earnings suggest we hold on for a decent ride higher down the road that will be interrupted by strong pullbacks. Use those pullbacks for buying the best set-ups is the best advice I can give when the time comes that we do sell and everyone thinks the best is over. All in good time.

The S&P 500 has strong support at the 20-day exponential moving average at 1224. Right next to 1224 we have the November highs at 1227 on the SPX. When you have good support so close together it acts like a powerful shield in favor of the bulls, thus, if we do pull back here, that 1224/7 area should hold things for the bulls. In time we'll probably take those levels out when the market wants to sell for real, but for now, we can expect things to hold pretty well at, or above, this support area. 2590 is big support on the Nasdaq.

One thing that is quietly taking place already to set up bigger selling down the road is the way fewer and fewer stocks are making new 52-week highs while the overall market grinds higher. The advance-decline line is also starting to deteriorate. More and more stocks are losing their 20- and 50-day exponential moving averages. Slow erosion underneath the surface.

Healthy markets don't do this. They hold relative strength in the internals versus price, and we are not seeing that right now. Again, red flags for down the road when we'll need a bigger selling episode to kick in. Little warnings ahead of the event to come. For now, we continue to play the retail game, which means it's likely we'll hold up pretty well for the rest of the month with scattered small pullbacks in between. Bigger selling shouldn't kick in for a while longer, but you can't let your guard down at any time when the market flashes those red flags. Keep the trading light.



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 21-Day Trial to!

© 2010

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 constitutinginvestment 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