Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market On Fast Train Towards Zero

Stock-Markets / Stock Index Trading Mar 02, 2009 - 08:28 PM GMT

By: Kingsley_Anderson

Stock-Markets Best Financial Markets Analysis ArticleOn Sunday, I indicated that when the market fails to sell off on bad news, it means the market is finding a floor. When it in fact sells off on bad news, it is certainly not a good sign. This sort of ties into the old market adage, “buy on the rumor, sell on the news,” whereby by the time the news has been published to the world, it has already been discounted by the market.

Right now, the investor psyche is so damaged at this point that bad news is resulting in the market digging an even deeper hole for itself. Things are so bad that even Gold, the natural hedge against a bad economy, was down today. Well, the news this time was that the Federal Government was going to give AIG an additional $30 billion. As a consequence, the market went south, ending on its lows of the day. Clearly, the market does not appreciate how the Obama administration is handling the crisis.

Despite being only seventeen months old, this bear market has caused the S&P 500 to lose over 55% of its value. As a consequence, this is the worst bear market, EVER, for the S&P 500. It only pales in comparison to the 1929 market crash, when the DJIA sunk 89.2% (there was no S&P 500 at the time). Very scary stuff. Unfortunately, I do not have price targets as to when the destruction of value may end. My only strategy is the same as it has been since October 2007- stand aside and let the market prove itself.

The DJIA and S&P 500 are well past their respective November lows. Their resistance points are listed on the charts below. Notice also that RSI is again showing both indexes below 30, and therefore oversold.

Like the English in the Battle of Britain, the NASDAQ refuses to fall. However, it seems its days are numbered. Today, it closed at 1322, only a scant 27 points from the intraday November low. The strength shown by the NASDAQ illustrates a good point. The stocks in the NASDAQ are not in the same precarious position as the financials. However, the tech stocks are the proverbial baby being thrown out with the bath water. In a bear market, there are no safety stocks.

Will we have another “Turnaround Tuesday?” The McClellan Oscillator is currently oversold at 94.26. Whatever happens, my advice is to stand aside; Tuesday will no doubt be a crazy day. There is a lot of talk on television about this being a bottoming process. That may be the case. However, market timing, which is possible, does not involve buying at the absolute low. Never, ever try to catch a falling knife.

By Kingsley Anderson

Kingsley Anderson (pseudonym) is a long-time individual trader. When not analyzing stocks, he is an attorney at a large law firm. Prior to entering private practice, he served as a judge advocate in the U.S. Army for five years and continues to serve in the U.S. Army Reserves. Kingsley primarily relies on technical analysis to decipher the markets.
Kingsley's website is Trade The Breakout (

Copyright © 2009 Kingsley Anderson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Kingsley Anderson Archive

© 2005-2022 - 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