Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Buying The Dip.....

Stock-Markets / Stock Markets 2010 Mar 16, 2010 - 02:13 AM GMT

By: Jack_Steiman

Stock-Markets

The market started to sell today. Finally!! We started fairly flat but then started heading down with the Nasdaq leading the way, which made sense since it has been the leader on the way up in this bull market. What leads up is the most overbought thus it's likely that it'll lead down to unwind those oscillators. However, a funny thing happened, yet again, when this market tried to sell off. It couldn't stand the selling. Very unusual to say the least. This market was at extreme levels of overbought coming in to today thus when it started to sell it made sense that the selling would stick and it seemed that it would. A few buying attempts were thwarted down by the bears, making today seem as if it would be a trend down day.


Then came the final hour and then in came the buyers. The market clawed back with the Dow going green along with a fractional gain from the S&P 500. The Nasdaq down a few points. The S&P 500 closing once again at the 1150 level, seemingly begging to break out, overbought or not. Such is the way of a bull market, like it or not. It just can't find sustained selling as buyers rush in the moment they see some selling. Fear of missing. Try telling anyone who's ever been around this game that it isn't 100% emotional. It is and when a market is trending higher, the natural inclination is for buyers to step up whenever it sells some, even if it seems it's not enough. Usually it's not really enough but the emotion is just too intense and thus traders rush in. Today we saw this late. It is what it is, enough selling or not.

Keep in mind we have to respect the fact that we are overbought still. This means that we can still sell at any time. The S&P 500 could stall at this 1151 level and just meander for a while thus there's no all clear here. You do, however, need some exposure at all times in a market such as this one simply because it refuses to sell a while lot before buyers show up. This reality means there will be times when some plays are under water a bit and such is life. You have to be able to mentally deal with this reality and accept it for what it is with the understanding that good base set ups, such as the stocks we're in, are likely to make a strong move higher over time. Patience is the key after you've seen a move higher and you've gotten used to quick gains.

Any selling that takes place above those 50-day exponential moving averages is just noise within the up trend and does NOT tell us that we're too bullish with regards to sentiment. Bears may tell you that is the case but it is NOT the case at all. It's important not to get too emotional with normal selling that takes place from overbought within an uptrend and not to rush to a conclusion that it's based on extremes of bullish sentiment when that spread is only 21.3%. For now there is no problem with the level of bulls to bears at all. There's quite a ways to go before that becomes a real problem again.

The key to a bull market is those daily internals. We have watched this rally from the very beginning show characteristics that say this market can continue to climb. We have seen the advance decline line stay strong throughout. On the up days we witness spreads of advancers over decliners that tell us the majority of stocks are participating and from all over the market place. On down days, money finds a way to rotate in, keeping losses to a minimum and from keeping decliners down enough so as to not overwhelm the advancers. New highs continue to expand while new lows go nowhere. The momentum indicators continue to impulse or advance hard with price. Nothing on the bullish end of the coin is lagging.

Price is strong as are the internals and until this reverses, we have to trust the message being sent. It has worked so far and there's no reason to believe it won't in the near future. Stick with what's working until that trend changes. No sign of that yet. Some day it'll all change, of course, but for now the market internals are saying higher prices, above S&P 500 1151, are coming soon.

Support on the S&P 500 is near 1130 on gap down to the low 1120's. Can we fall that far? Sure we can although the market is showing no signs of wanting to do that. if the S&P 500 can break cleanly above 1151, it'll use that level as massive support on back tests to unwind future overbought conditions. If we start losing 1120, then something else may be developing but I don't think that's in the markets future here. The Nasdaq has great support down to 2300 but I don't think we'll see that either, especially if the S&P 500 clears through 1151.

If the S&P 500 sees 1130 or so, then the Nasdaq can see 2300. The key here is the S&P 500 making the move through 1151. Again, this can then act as strong support down the road on pullbacks. Very interesting time for sure here as the bears are feeling the heat with the S&P 500 trying to clear 1151. Next few days will be very interesting.

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!

© 2010 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.


© 2005-2019 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