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
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Selling Accelerates...

Stock-Markets / Stock Markets 2011 Mar 17, 2011 - 04:14 AM GMT

By: Jack_Steiman


What a day we had today. Down in the morning before rallying back with the Nasdaq, actually going green for a brief moment before the European Union's energy chief made a comment about the Japan nuclear situation, which sent the market exploding downward. The Dow went from -40 to -200 in moments. Eventually, it almost went to -300 before rallying back to -130. It slipped again late finishing down 242 points. Down 50 plus on the Nasdaq and 25 plus on the S&P 500. Very nasty action with wild swings as the VIX has spiked, and thus, large swings were taking place all day long, although most of the swings are clearly lower. Larger swings do create more emotion, so it's best to keep things light on both sides as you'll get head faked time after time. Just better to keep things light to mostly, if not all, cash.

Once we gapped down we saw some flight to safety as the put-call on the index side was flashing levels at slightly above 3.0. Extremes for sure as the masses are fearful, and looking for protection in case the market crashes out. This is good news for the bull's bigger picture as it shows a high level of bearishness starting to come in. That's what it'll take in order for the market to find a bottom down the road. We did see some nice moves up once these extreme levels were hit early on, but the bad news out of Japan won the day. Just too much fear for now and that's why we saw selling late as few are anxious to hold overnight. With the poor close we are getting oversold on the short-term charts. We could see a bounce at any time due to these oversold conditions, but that does not mean the selling has finished. Recognize the need to not get caught up in a rally that takes place from oversold 60-minute charts. If you want to chase that it's your call, of course, but it's not the safest, nor the best, way to play the stock market. Let things work themselves out for a while. Patience is best here.

I don't think anyone out there would argue with this one basic fact. If you want the best stock in the world, just put in the Apple Inc. (AAPL). It's number one in everyone's heart. It seemed to me that the best way to create fear is to take the number one stock on the planet and break it down below the 50-day exponential moving average. Today was that day as it soared below its 50's on its way to being down 15$. It's biggest losing day in quite some time. Losing its 50's creates a lot of fear. Fear equals lower prices which equals a bottom. Without fear we can't get the selling needed to build back the wall of worry. The deeper this baby falls the better off the market will be for it. It will go lower still, but with bounces, of course, along the way. Apple has not seen its ultimate bottom on this pullback in the market. Good to see Apple crack today. It will go a long way to helping the market find a bottom a ways out from here.

When we go back and study the daily and weekly charts hind sight makes it easy, but let's study it anyway. If you noticed, the daily charts stayed overbought for a very long time with RSI readings getting well above 70. We all kept wondering what it would take for this market to start a long awaited pullback to unwind those lofty readings. Day after day the market would grind higher. It seemed as if it would never stop. Then we looked at the weekly charts on the major indexes. That ultimately told the story. They were working their way towards overbought, but their RSI readings hadn't hit 70 yet. When that magical moment did occur, it took but a very short period of time before the whole market gave it up. It took the daily and weekly charts to print a 70 RSI before this market gave it up. Very often it only takes 70 RSI on the daily charts before things rock lower, but in this intense bull market we needed confirmation from the weekly charts before we saw the market top out. Interesting, to be sure.

It now appears that the daily charts will need to print sub-30 RSI's before they are ready to make their bottoms. How great an opportunity that will be in time if we're all patient enough. Stochastic's will also likely have to print sub-10 readings if not sub-5. The lower the better is how I see it. MACD's will have to sink further below 0. But they're already somewhat below 0 with more work to be done. Fear is ramping now with more needed, but make no mistake about it, the oscillators are getting it done. When we bottom it probably won't be an immediate rush up. Rather slow at first, then it'll accelerate. But again, that's not upon us yet, so let's not worry too much about it. I'd rather spend my time trying hard to find the bottom of this market as close as humanly possible. Today's low at 1249 is support, as is 1225, and then 1200. Step-by-step we'll go lower.

Here's the hard part. When it's time to buy it will feel ugly, and you'll say, no way am I buying here. I can fully understand that. It won't be easy to buy the kind of weakness we've been seeing and what's still to come. You don't have to participate if it feels too difficult. Do what feels right, but when I feel that it's time, even if I am a bit early, I will put out plays for sure. The best plays are the ones you buy close to their lows rather than chasing much higher over time simply because you suddenly get the nerves to move in. We're not at that time yet. Relax. Let's watch how things unfold over the coming days and weeks.



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!

© 2011

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 - 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

6 Critical Money Making Rules