Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

European Headlines Continue To Dominate Our Markets.....

Stock-Markets / Stock Markets 2011 Nov 27, 2011 - 11:58 AM GMT

By: Jack_Steiman

Stock-Markets

There are no doubts about our trading days beginning with the futures over in Europe and ending with whether their markets will recover or not. Our markets continue to remain oversold on the short-term charts as they seem to stay focused on the headlines out of Europe. Unfortunately, the news out of the Euro-zone is never good news. There are bank problems, an inability to agree on solutions, yields rising, sentiment crumbling, and just no good news from anywhere about anything significant happening on any given day. It's beginning to cause the market to lose hope and faith, and trust that something good will be had anytime soon. Just like the average trader and investor, we all fear that financial disaster awaits us, and that the debt crisis spreading around the world will end unfavorably.


With that said we can certainly understand why our market has been slipping lower and lower all week. This week ended with intense losses, many sighs, and some folks just giving up, which is unusual for this time of the year. Thanksgiving and Christmas is usually the time of year that has people feeling happy. There are usually good vines throughout the world as we enter the holiday season.

Instead, the crisis in Europe is so strong that even with the Christmas holidays approaching there is just no bid. At a time when interest rates are historically lower, we are seeing strong out flows of cash from funds and almost no new money entering to buy stocks. Right now it seems as though folks are more interested in not losing than worrying about how much they can make on their money.

When it gets like this it dries out liquidity and markets drift lower. If the wrong news hits, they don't just drift lower, they get slammed lower. The lower we go the more malaise sets in, and the cycle repeats over and over. Wash, rinse and repeat. This goes back to the argument of never playing the time of year, but simply playing the markets message. Nothing is a hundred percent the same in this game. Adjust to the market conditions and you'll survive. Play seasonality at the wrong time regarding market news, and you can get annihilated. It's always about the market, not the date.

If we study the monthly charts, we see that we have not broken down as of yet. The market may try to hold on a while before breaking down below those levels, but we never want to lose longer-term chart support levels. When that takes place, it's very bearish for the long-term. The levels being 1150 S&P 500. We're close. Too close for comfort. 2368 Nasdaq and the Dow 11,052. It would take one, or two, more bad days for all of these index monthly charts to break down. The bulls better get rocking sooner than later, or things will get very nasty.

When monthly charts break the falls can be very rapid and without mercy. These levels need to be watched closely. Even if we do get a much needed bounce in the market, it doesn't mean these levels are safe bigger picture. Sometimes we simply get the much needed relief bounce to set the oscillators back up so they can fall harder again. Unless we rock higher, any bounce will likely be short lived, allowing the bears to do their dirty deed.

Sadly, with all the selling over the past few weeks, the sentiment issue has not reversed back down hard. In fact, it stayed at the same level of nearly fifteen persent more bulls from the prior week, even though we sold hard last week. The sentiment trade is over as predicted. It just unwinds naturally over time. Those double digit inverted days are long over as are any inverted levels. This tells us that the market is now trading on fundamentals alone.

That's not good news for this market, or any market around the world these days. Even the put-call readings have leveled off from extremes the past week, or so. Now we watch, and wait, to see if those monthly levels get taken down in time. As far as the near-term goes, we did lose 1177 and 2512. So, now those levels will act as resistance on bounces. The Nasdaq is lagging, and that's always bearish. Froth needs to lead, and it's not. At least for now we take a defensive posture. Watching closely as things move along. But the news thus far isn't good.

Lastly, although things look bad, we are very oversold. Some short-term divergences forming, which suggests, we could chop around with a slight upward bias for a few weeks, or so. Nothing to get overly excited about, but some rally seems quite possible. Shorting right here doesn't seem best. Take it easy until things unwind. If you need to short, go ahead, of course, however I don't think it's the very best time to do so.

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 21-Day Trial to SwingTradeOnline.com!

© 2011 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