Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Quiet Inside Day

Stock-Markets / Stock Index Trading Jan 26, 2010 - 12:27 AM GMT

By: Jay_DeVincentis

Stock-Markets

Today's candlestick traded inside of Friday's large down stick and normally that equates to another day of struggling for this market. When a market has trended down for a few or more consecutive days and you get this type of inside stick, you can expect a little more selling in normal times. Apple's (AAPL) earnings tonight could try and turn that tide but normally the market will have a tougher time. Futures are up some after hours based on AAPL so it may be different this time but don't bet on that too much. Nothing will be easy for this market very short term. Those tough and too powerful sentiment readings just haven't been worked off enough to get aggressive with regards to buying stocks.


While things have assuredly unwound some on that front, we still haven't seen any real fear in the options market or in sentiment from traders on the floor. We, in normal times, will need to bring fear up to much higher levels and get bullishness ramped downward. Only then can we get sustained upside action. Sure, AAPL can bring a little upside possibly tomorrow but sustainable upside will be very rough for the bulls right now. I'm not suggesting a market free fall. I'm just suggesting that now would not be the optimum time to be buying hand over fist. Will likely just meander further down over time with plenty of up days to make feel like you're missing something. Just the way the big players like it.

We all know by now that CitiGroup (C) is an important stock to follow with regards to this market and the healing process. Lately it has not been behaving well. It's closing in on its poor secondary pricing of 3.15. It printed 3.13 and then headed up but is now closing in on 3.13 once again. It would not be great to see this beast of a stock in terms of importance lose that level. It would be bad news for the financial sector which is what needs to hold more than any other sector because of the risk in that area of the market. If the financials fail, so will the market. The good news is that things are rapidly unwinding in this part of the market in terms of the oscillators. Let's just keep a close eye on C in the days ahead.

Earnings have been solid overall. Anyone who says anything to the contrary is only fooling themselves. The market is allowing some stocks to soar on earnings and not allowing others due to the run up they've had prior to their reports. Those stocks are full and simply need a pause in the action. Just because a stock sells on earnings does not mean it had bad earnings. When stocks get overbought and the news was in prior to the report, they will usually sell off some to allow their oscillators to unwind. Nothing bearish about that. The fact that it falls on earnings allows for the masses to get more bearish and that's just the tonic this market is begging for. I warn about getting bearish on stocks that have blow out earnings but fall once those earnings have been reported. They usually set up as great buys within a few weeks time.

Now let's go over how things have unwound on those daily charts. We know that the S&P, Dow and Nasdaq were all printing stochastics near 100 at their peaks. In addition, they were all printing RSI’s at or just below 70. Not a good combination for longs. It can stay overbought and did for a while but the party finally ended when the sentiment spread reached 37.5% more bulls than bears. When we look at the numbers at the close of trading today we can see that the RSI's are now averaging 39. Sweet unwinding. Stochastics averaging around 10. Very nice. Getting close. I would love to see the RSI's get closer to if not breach 30. Point is we're getting close. Yes, we have lost for now those 20- and 50-day exponential moving averages and that's not great but if can hang close we can capture them back in a heartbeat. For now the charts don't look great technically as you'll see tonight in terms of the patterns and breakdown's but we have to also look at how much they've unwound and right now the news there is getting better quickly. So is this a bear market or is this a correction?

I still believe this is a correction and NOT a bear market. I do think some very nice buying opportunities are close at hand. A little more patience is needed here. Yes, some charts look bad but they can repair themselves. I think it's just a matter of ramping up enough bearishness and then we can move higher again. Again I ask for your patience here.

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 30-Day Trial to SwingTradeOnline.com!

© 2010 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