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
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
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gaining Insight Into Stock Market Movements

Stock-Markets / Stock Index Trading Feb 03, 2010 - 01:33 AM GMT

By: Jack_Steiman

Stock-Markets

All you can do is learn. We had a very intense move lower on the indexes across the board led by the technology stocks. In good markets the technology stocks lead up and in bad markets they tend to lead down as the appetite for beta is always there when things are trending one way or the other. Off the top there was no question that beta led down although we are not seeing beta lead up on this particular move which is somewhat interesting.


However, it started to play catch up big late in today's session. When markets correct they often do so in a fashion that leads many to believe the end of the world is here. Sharp quick moves lower that totally scare folks thus getting sentiment problems to reverse. We had a very bad sentiment issue thrust upon this market three weeks ago. Two weeks and 7% down in the markets later this market looked awful. Since then we have bounced back up to resistance or the 20- and-50 day exponential moving averages on the S&P 500.

We closed just a few points below thus the job for the bulls here is to hang close for a while and then burst back through. We may need a little time due to the fact that we're very overbought on the 60-minute charts. I guess we could always gap over and stay there but after a strong run such as we had the past few days, it would best to cool off a bit before moving higher over those critical moving averages. That won't be an easy chore for sure as there was lots of volume at the time we lost those levels. Normally, when you have a strong volume burst after losing critical support, you're going to struggle a while before being able to blast back through. There are reasons for optimism here but there's also reasons for caution and I will discuss them in a moment.

Today was constructive for the bulls no doubt but they still have to contend with the 20's and 50's just above at 1109/1107 respectively on the S&P 500. You try to look for signs from leaders about whether the economy is truly recovering or not. The United Parcel Service (UPS) CEO says that the recession is over. Who am I to argue with a man who deals with a global operation? He said things are strengthening everywhere he looks no matter what point on the globe we point to. If this is true, if it is really true, then the market will move higher this year. Of course this is open to debate as many companies are not declaring such enthusiasm. On the other hand, more and more are reporting great earnings. Look at the real estate group today.

We have that chart tonight. it just burst on better than expected earnings from many within that sector today. Whirlpool (WHR), get your Whirlpool's folks. This stock just burst out on earnings today. These companies are saying things are getting better and better. No reason for them to get overly optimistic and then disappoint the street later on. They legitimately feel things are rocking up here. Then earning's season has been strong. If this trend continues for another quarter, the market will trend higher and higher.

If we look at the daily charts we can see that stochastics are still basically at or near oversold. RSI's no longer are but they are still further down the chart than anything else. 40 RSI's are far from too high. So on the daily front, the market is still capable of big upside. The 60-minute charts are now overbought with stochastics in the mid 90's and could use a pause. However, if we pull back some and the oscillators don't push down hard we are likely to shoot back up. The daily charts are fine. The good news with the 60-minute charts is that the oscillators did impulse or push up hard during this rally and that bodes well for the future. It tells us that any move lower in the market is likely to create positive divergences on those charts. No guarantee and we'll watch that as it unfolds. However, the prospects are good on any selling.

On the down side of things it would be best if the Nasdaq stocks weren't under performing so badly on this first rally off the heavy selling. Many big leaders are dead in the water for now. Stocks such as Amazon.com (AMZN), Apple (AAPL), and Google (GOOG). Qualcom (QCOM) can be thrown in as can many more. This is not good to see and does raise some type of red flag regarding this rally and also tells us why the Nasdaq has so lagged its brothers and sisters upward. These stocks need to get going or the market will not make the move over key resistance right above. If the market sells off some steam from those 60-minute charts it would be great if those stocks actually held their ground and then started to lead up.

I said I thought this would be a correction and not a bear market. I talked about needing to drive sentiment way back down in to the bears camp and how some selling would get that job done. it has and I will be shocked if it didn't run down even further when we get the news tomorrow morning based on what took place in the market last week. With the sentiment issue likely now out of the way, the odds are solid that we will begin to once again head back higher. Nothing is guaranteed and I will watch the next push lower for confirmation from the oscillators but things are looking better.

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 21-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