Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Going Nowhere Stock Market Continues On...

Stock-Markets / Stock Markets 2012 Apr 21, 2012 - 12:30 PM GMT

By: Jack_Steiman


I will say it over and over. There's nothing bullish going on. There's nothing bearish going on. What there is is a market that wants to work off incredibly overbought conditions for a while to come so it can gain momentum to move higher once again. When you're overbought on the daily oscillators for months straight, months are going to be spent to not being overbought on those oscillators. It's as simple as that folks. We are not going to get overbought again just like that.

It's going to take a very long time before the market will have the ability to get overbought on the daily charts once again. There's usually as much time spent unwinding as there was at overbought, if not longer. I am not saying you get oversold on those daily charts as long as you stayed overbought. It's just that you'll spend a lot of time at the neutral level. The longer you stay neutral, the more you get people to give up, and the more you unwind those oscillators.

There's nothing bearish about the process, although, it can feel very bearish because upside is not sustainable. Folks are greedy. They want continuous upside all the time. No exceptions. Take away the candy store and they pout. The more they pout the more bearish they get. That's the necessary medicine for this market. Things can still go much lower from here before the market finds the bottom of its base to meander about in for weeks to months after that. Buckle up, if you haven't already, and enjoy the ride, even though, it'll be boring and frustrating. Bigger picture it's a good thing.

Fed Bernanke is on watch next week as they have their latest announcement about interest rates, and the health of the economy. Will he spend any time talking about the next QE program? That's what the market will be tuned in to next week. Also, the market will want some deeper clarity about his wavering on how long interest rates will stay as low as they have been. Will he waffle about some more, or will he be firm for once? He originally said no upward spike in rates until late 2014, but once he saw oil, and other commodities, blasting higher, he said, let's make that late 2013. Big change.

He might, once again, lean towards 2014 late, because of how badly the most recent economic reports have been. There appears to be a real downturn in them as evidenced by the bad number in new jobless claims the past two weeks, and by the terrible growth number from the Philadelphia Fed this week. The economic reports have definitely been on the decline this past month. The market had been trying to decide whether its real, or just a one time event. It's starting to look more real, but it can always turn back up, as we know. His words toward a QE3 program, or not, will be first, however, on the minds of traders. They want to know the economy is protected, if need be.

When markets get into lateral mode, or spend time trying to form a large base from which to trade in, it becomes more and more apparent that this is the process taking place. It's apparent by the lack of new breakouts. That's usually not permitted in any heavy dose as the market is trying to unwind oscillators. Breakouts accomplish the opposite, thus, we are seeing fewer and fewer stocks in bases allowed to actually break out of them to the up side. They get close many times and it seems like it's coming only to be disappointed in the end.

They simply continue to cycle around in their bases, and do get on your last nerve, so to speak. We think, here we go, only to say, here we don't go. Then you have to deal with them moving back down in those bases. The frustration escalates. You simply have to recognize what's taking place, and hopefully that can keep you calmer about why stocks just won't make the big move. Patience is the name of the game for a while to come, like it or not.

The base is still forming, and with massive support at exactly S&P 500 1340, it would not shock me to see the market gravitate to that level in the coming days and weeks. It doesn't have to, but that level would create a much broader base from which to trade, and thus, makes more sense technically. Stocks, like Apple Inc. (AAPL) and (PCLN), are continuing their pullback's and appear to need more time. Apple has earnings after the bell on Tuesday. There is real risk they are to the down side, unless they report perfectly. It could happen, but it better be perfect.

If Apple fails on Tuesday, it could be the catalyst to get us down to that 1340 S&P 500 support zone. 1422 remains huge resistance that we're not likely to see for some time to come. A day at a time, with the two big events next week being the Fed and Apple earnings.

Have a great weekend and enjoy your lives.



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!

© 2012

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