Stock Market Meandering...WDC Sad...Where From Here...

Stock-Markets / Stock Markets 2015 Jan 27, 2015 - 11:29 AM GMT

The market doesn't seem to know what it wants to do short term, but what I can tell you is that there is no selling nor buying of any great intensity as we're simply handling out. When the big picture trend is in a handle you still have to give the benefit of the doubt to the bulls. That said, you can't argue with the red flags either from the perspective of just ignoring them because you want to. Your desire to not want to think about any headaches can eventually cause you some if you don't at least recognize the possibilities.

The technical set ups on all the key-index weekly- and monthly- charts couldn't possibly be more bearish. Extremely-elevated oscillators pointing and crossing in a bearish fashion down. When you add in froth you have to, I would think, at least think to yourself I better not get overly involved. In the end, even if the market blasts higher, isn't safety part of the game? I would like to think it is. So, as we try to sell from time to time and fail to follow through, it feels as if the market will never fall. And it may not. We could just break out from here, but understand there are correction type headaches on the technical set-ups everywhere on those key, longer-term index charts.

One of the sad, ridiculous realities of this game is how unfair it can be. This morning pre market we saw Seagate Technology Public Limited Company (STX), a direct competitor of Western Digital Corporation (WDC), report their earnings. It was a very bad report and the stock was hit hard for their miss. Sadly, and unfairly, WDC was taken down almost as hard by association. Their report out after the market closes on Tuesday. Don't ask questions about how they'll do Tuesday. Just sell it now and let it prove itself the mantra of the traders. Because they hadn't had their earnings report yet they had no way to defend themselves, thus, the selling there. Sorry about that folks. Terrible and unfair. But that's the way it is in this silly gambling casino, which is all the market really is.

So where do we go from here. It would be easy to say to watch this level or that. To watch and make sure the 20- and 50-day exponential moving averages hold on the key-index daily charts. That really hasn't worked very well over the past several months. Many break downs below on a closing basis. Some breakdowns quite decent, but none of them held the way they almost always do historically. The reason for the breakdowns not working is the actions from ECB last week. That, in concert with our fed regarding rates here at home, is keeping the market from allowing the technical set-ups from playing out.

They try to play out with a real selling episode but they just don't. So the battle is on. Technically-poor index charts versus fed interactions across the globe. More guessing than playing. Like I said, critical levels get taken out on both sides only to see them fail, thus, light exposure is best and based on the type of thing that can happen to WDC by unfair association, ETF's may be best, but again, they look awful long term. It's more Russian roulette. Nothing is easy yet the emotion says to buy every dip and that's totally understandable. There's risk being long and there's risk being short. Greece's elections are now out of the way. The ECH QE program is now out of the way, so we turn to earnings and this week will be wild.

Keep it light is my best advice.

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.

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.

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