Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Stock Market Tiring?.......

Stock-Markets / Stock Markets 2012 Sep 06, 2012 - 06:20 AM GMT

By: Jack_Steiman

Stock-Markets

That's the big question I am asking myself based on the action I'm seeing over the past several days and weeks. So many stocks are starting to break down below key moving averages while some are breaking out, but then, falling right back down. Not what you see when a market is getting ready to move appreciably higher. Lots of key stocks as well are breaking. Look at the move in railroad stocks today. It's just horrible as the sector itself broke down with stocks such as Norfolk Southern Corp., CSX Corp. (CSX), and Union Pacific Corporation (UNP) really having bad days on big volume. FedEx Corporation (FDX) warned last night, and after an attempt to recover, it fell hard late. The transports are just not acting well. You don't usually see the transports acting badly when things are about to blast higher. Add in the commodity stocks, and the industrial stocks, it isn't the best for the bulls right now.


Remember that we had a terrible ISM Manufacturing Report the other day. That's when the industrial and the commodity stocks really started to give it up. Fedex added in the transports, thus, the market seems to be in the crumbs stage of its move higher since the lows. This is not bearish. The market needs a rest anyway and this may be the beginning of the process to unwind deeper. The message seems to be more and more telling that the market is probably ready for some decent downside action in the not too distant future.

Based on what I just wrote, you would think I'm bearish. I'm not. Even if we fall 3-5%, that doesn't make things bearish bigger picture. Not only that, but we could actually still go higher first to test the old highs. The reason it wouldn't be bullish is because there would be strong negative divergences on any further move back to the old highs. The combination of potential future negative divergences and some complacency coming in probably means any move higher to the old highs, or slightly above, will be sold thereafter. Bottom line is when a market is acting such as it is now it's best to lay off the aggressive playing to the long side. It doesn't mean we fall immediately, but now it's time to be extra careful with your playing. Be sure not to do too much here.

Sentiment is now becoming a bit of a concern for the bulls. The bull-bear spread over the past month, or so, has taken a strong leap upward. We were in the teens and now the spread is at 26.5%. We are nearing the first red flag level of 30% more bulls. It doesn't mean it's an immediate sell signal, but when sentiment starts to jump too rapidly, it's not a great sign for the bulls. In addition, the AAII sentiment survey shows the highest number of bulls in quite some time. I don't give it the same energy when studying it as the Schaefer numbers I see, but you have to give it some real thought when you see bulls spiking up that rapidly. Not a good sign, once again, for the bulls. The market could use some selling for a healthier longer-term perspective. Some selling now would be great for the bulls, even though the bulls never want to see any real selling short-term. Focusing on the bigger picture would be wise.

1384 on the S&P 500 is the 50-day exponential moving average. A move below that would take us down to roughly 1360. We may just need that type of move in order to unwind sentiment and for the oscillators on the daily index charts to unwind further. They are still too high so a breach of good support would actually be a good thing for the market bulls. Keep it light for now, folks. Again, we could get one more high reading on the S&P 500, before we top out but that's no longer a certainty.

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 15-Day Trial to SwingTradeOnline.com!

© 2012 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

6 Critical Money Making Rules