Stock Market Boredom.....Going Nowhere.....
Stock-Markets / Stock Markets 2011 Nov 15, 2011 - 05:11 AM GMTBy: Jack_Steiman
It's painful mentally. We don't go anywhere. So many head fakes. There are many days, such as last Friday, that get you to thinking the breakout is upon us. There have been many days where you'd bet the house the bears are about to take over. Just think back to last Wednesday. No follow-through from either side of the coin. Both make headway, but neither can get the job done, and therefore, we continue to trade in a range with whipsaw the only word that really works to explain the markets action over the short- to medium-term.
There is no volume to be found on either side no matter what takes place technically. The breakout can occur on an individual stock, or a breakdown, but when you look for confirmation from volume, it's just not there. Because of this the breakouts, and the breakdowns, just aren't sticking. This is mirroring the market index charts, which appear to do one thing on a given day, only to do something entirely different the next. It's like they say up north, if you don't like the weather, wait a few minutes, and it'll change.
The market is this kind of behavior, no doubt. It just can't make up its mind, and it's frustrating everyone from trader to investor. Who can blame anyone for feeling like things are too tough here. This is the reason for so little volume. The market continues to just play out this way, because there's no conclusion one way or the other in Europe, where the market can't decide what will play out. It can't decide whether defaults are the new game in town, or whether smarter minds will gather together to prevent such an event from becoming a reality. We'll get an answer at some point in time, but the market is acting as if it doesn't have a clue as to when that will take place. So, in the meantime, we just meander about day to day for no good reason. Up and down we go for now.
Markets are palpable. You can feel the energy of them just like you can feel human emotions from different perspectives. You can feel silence. You can feel excitement. You can feel despair. On and on. When something is thick with a particular emotion it takes on a life of its own. This market is causing a lot of emotions, but what I feel the most is boredom and frustration. A give up type of feel to things. It's as if people just don't know how to trade, or what to do next as things change literally from day to day. How you set-up things at the end of the day, is not necessarily what it is when you wake-up.
You can't play from any other perspective, thus, this market is confounding everyone. No one feels like their making headway to anything positive. Frustration builds, and you can see it in the silence of people -- frustration through absence of communication, frustration through actions. I'm afraid this market will continue with this behavior, and thus, the likelihood of this frustration continuing is quite high. People often act in ways they regret later on once they have time to reflect. Try to step back. Know that it'll pass in time. Don't make hasty decisions just because you think nothing really good is coming out of the market these days. Patience always pays off.
The financials were once the plan of attack for the bears today. These stocks stunk up the market like no others, as usual. Good patterns that recently existed are no longer that good. More on the bearish side, and there's no doubt these stocks are still entrenched on the bearish side of the market. That said, retail and many other sectors are doing just fine and leading this market up. Retail sales get reported tomorrow morning. It'll be very interesting for sure. If it's good, these stocks will help the market gain back the losses from today.
The financials are only one part of the equation. The market has proven in can have an equilibrium even with those horrific stock performers as others take over. Add in Apple Inc. (AAPL) behaving poorly still. It's good to see how well this market holds up. It gives the bulls hope even though things feel so bad out there. Know where you're putting your money is the key here as the market refuses to die. It may feel like it should die, but it's not, and if you want to be involved, avoid the worst area. That is the financial stocks! Some things don't change. Or so it seems.
And so we sit in these back and forth patterns that will have to break in time. When they do, this boredom will go away and the winner will have a very directional move for a while until the next boring set-up takes shape. The good news is things do break one way or the other, and ultimately, these triangles will snap. These patterns will break, and things will at least get more interesting. The sideways look of this market is causing restlessness. Just hang in there and be smart. Wait for things to snap. I think they'll break higher before massively lower. I could be very wrong, and thus, let's keep it appropriate. If we lose the 50-day exponential moving average at S&P 500 1222, things will deteriorate fast. If we break above 1275, or trend line resistance, then we shoot upward towards 1292. These are interesting times. Be patient.
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.
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