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

Dow Jones Stock Market Index is Not Going to Crash

Stock-Markets / Stock Markets 2015 Nov 19, 2015 - 10:05 AM GMT

By: Sol_Palha

Stock-Markets

Empty pockets never held anyone back. Only empty heads and empty hearts can do that. ~ Norman Vincent Peale

We have published several articles over the past few months refuting proclamations from experts calling for a crash, two of which are Market sell off time to panic? And The Dow index is getting ready to soar . Instead, we viewed each so-called crash event through a bullish lens. We even went so far as to tell our clients to celebrate while the markets were pulling back, a practice that is unheard of today.

Look at the bright side; you get to do something you have never done before. Drink while everyone is screaming bloody murder and sing when the markets are sinking. Who knows you might be a budding singer in the makings. Yes, most will call you insane, but instead of being stricken with fear, you will now be the master of your destiny instead of a slave to another's. Drink and be merry for the markets are letting out some well-deserved steam. We see no reason to worry and no reason not to sleep well at night. ~ Interim Market Update July 9, 2015


New phrases have been coined to put the fear of God into the masses. Earnings recession is one that comes to mind. Yes if things were that bad, and then pray do tell, what gives, why are the markets trending higher.

The comical fixation on whether the Feds will raise rates is another clear way to miss what is going on right in front of your eyes. It reminds us of a silly young girl pulling the petals of a flower and saying "he loves me, he loves me not". While the masses fixate on what effect a rate hike would have on the markets, the markets have already moved up from their lows and dangerously close to testing their highs. So if you continue to follow the talking heads, you will always be one step behind, and the only thing you will have to show for you worry is a bag full of dust.

Even secondary indicators can be used to create a bullish argument for the markets and offer a more plausible scenario than what is being offered by the Doctors of Doom. For the record, we never rely only on secondary indicators. Our main indicator is our trend indicator, which is bullish and as long as it remains bullish we will not think of shorting this market.

The Rydex Nova/Ursa ratio can be useful when it trades in the extreme zones as was the case back in Sept and Oct of this year. When you see this occur, and the crowd is panicking, it is time to pay attention. It can be used to help determine when a market is close to putting in a top or a bottom. Right now it has mounted a very strong rally, so it's letting out some steam. If it does not break above 3.6, then a test of the 2.8-3.00 ranges is warranted.

The broker-dealer index is also a useful index to monitor in times of turmoil and or euphoria

Brokers and dealers are like the average Joe; they march to the same drumbeat of Joy and euphoria. Taking a position that is contrary to theirs when emotions are running high usually leads to a positive outcome. Like the masses, they panicked when the markets sold off as illustrated in the chart above. The Index plunged to new lows in Sept and October. Failure to trade past 187 on the next leg up will result in a test of the 170 ranges. The trend is up, the lower this index drops, the greater the opportunity.

Experts would have you believe that it's bad news when more than 50% of the SP 500 stocks are trading below the 200MA. Yeah once upon a time this might have held true, but look at the above, chart, it shows that a large percentage of stocks in the SP500 has spent a considerable amount of time below the 200 moving average, and yet the markets continue to trend higher. Note too that they are trending downwards since 2013, so this should be a double negative; instead the markets have continued to soar.

What gives?

Well, markets are no longer free and dreaming about free market forces is a waste of time. The markets have continued to soar higher because its hot money that is fuelling this market, and it's hot money that will continue to fuel this market.

We view the above chart in a different light. We have opted to use the information in the above chart in a different manner; every large deviation from the mean is a buying opportunity; illustrated by the blue boxes. As long as our trend indicator is bullish, we do not care about the so-called bearish pattern this chart is generating.

From a psychological perspective, the markets are soaring higher because this is still one of the most hated bull markets in history. A large portion of the public is still sitting on the sidelines. You will also notice that when there is any bit of uncertainty in the markets, the individuals in the neutral camp surge the most. Individuals that claim to be neutral are simply gutless bulls or toothless Bears. As long as the number of individuals in the neutral remains high, the masses will not move to the euphoric stage. And, until the masses are euphoric this bull market will not end.

Finally, the Fed is trying to fire a shot across the Bow of this bull market by hinting about an interest rate hike in December. Our response is come on do it or stop the chatter; the fact that the Fed harps on this nonsense is totally unbecoming. There are better things to pay attention too; since when is a meaningless 0.25% rate hike such a big event. This drama should be viewed as a clear signal that this economic recovery is nothing but an illusion and that Fed is well aware of this. Rate hike or not, the Fed will have to come out with a new stimulus plan. This market is addicted to hot money.

Put it this way. We welcome a rate hike, for it will trigger another market selloff providing the prudent investor with another lovely buying opportunity. Every strong pullback is a buying opportunity, end of discussion.

Accuracy is to a newspaper what virtue is to a lady, but a newspaper can always print a retraction. ~ Adlai E. Stevenson

by Sol Palha

www.tacticalinvestor.com

Sol Palha is a market analyst and educator who uses Mass Psychology, Technical Analysis and Esoteric Cycles to keep you on the right side of the market. He and his partners are on the web at www.tacticalinvestor.com.

© 2015 Copyright Sol Palha- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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