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
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Flat Day...Solid Action Continues...

Stock-Markets / Stock Markets 2010 Sep 28, 2010 - 04:04 AM GMT

By: Jack_Steiman

Stock-Markets

We get overbought and we start to struggle a bit. Most of the selling continues to be basically lateral. This overall lateral action allows things to unwind just enough to where we can then go higher once again. We're not getting oversold. We simply unwind back to mostly neutral levels and then the slow but steady buying starts in once again. That has been the pattern for a while now. As long as that continues, and I don't see any reason why it won't right now, you have to be a buyer of stocks on weak days, especially if the selling is contained by S&P 500 1131. 1131 was taken over by the bulls, and after one day back below, it popped right back and continues to trade above, thus, that's now become some very strong support for the bulls to play off of. The longer a big support, or resistance, level holds once taken over, the more powerful it becomes as big money sets up shop at those levels waiting for their buy or sell moment.


Now, if we look at those 60-minute charts, it does suggest some selling is needed and would be best. They are elevated and extended over time, thus, it really would help to get some selling to set up better buying opportunities near-term. This does open the door to some possible selling below 1131 on the S&P 500, which I just talked about as being very strong support. The bulls will definitely work hard to protect this level, but if the market oscillators haven't sold off hard enough, it is possible we will see yet another breach of this level. But I would suspect it to be a temporary breach. 1113 gap would be next huge support. It'll be interesting to see if the bulls can find a way to hold the bears as we approach 1131, if we actually do get that low. With the daily charts overbought on some of the indexes this adds to the possibility that 1131 will get a good workout.

The other factor leading to the need for some selling is the high pole too many leaders are on. So many stocks have not had a decent pullback for too long a period of time. RSI's, MACD's and stochastic's have stayed wildly overbought and that just can't go on forever. It's not hard to find a stock up on a high pole. Every sector has them. At the very least these stocks need a lateral consolidation with some mild selling. At most, some of these need a real selling episode to unwind the oscillators deep enough to set up more buying. Hard to imagine too much more buying in these high pole stocks until they sell at least some over the coming days and weeks. The longer these hold up short-term the deeper the selling will be medium-term. The sooner they at least pull back some, the better it will be for the stocks down the road.

That long-term down trend line at S&P 500 1160 won't be easy for the bulls short-term. If they can eventually work the market through this long-term down trend line it opens the door to much higher levels, and one could say a bull market. That's for another time, of course. 1131 down to 1113/1110 is key support that should not be broken, if indeed this up trend wants to continue. I don't think we'll go that low or break it, but you always have to leave the door open to all possibilities. Anything can happen in this game.

One last thing. Everyone is talking about the low volume throughout the past many months. I believe it's due directly to the flash crash where the little player has lost total confidence. Too many bear markets over the past decade, and then an intra-day thousand point move down, has really caused a severe loss of belief in this game called the stock market. Many are gone now forever. Only a very few will come back over time. I see it in our business as well. Tough times for everyone these days. When people feel there's no protection, and no one cares, things can get ugly. This time I think the market has gone too far in that regard. There's just no trust. Hard to blame folks to be honest.

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 constitutinginvestment 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