Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

After The Stock Market Slaughter, Relief?......

Stock-Markets / Stock Markets 2012 Nov 17, 2012 - 12:21 PM GMT

By: Jack_Steiman

Stock-Markets

Best Financial Markets Analysis ArticleWe have reached a point in this down trend when we should see some relief from the selling for a little while. No guarantee, of course, but we should see some real relief now that the bulls finally printed a daily candlestick that would suggest the bears have finally run out of steam. That's only for the very short-term but it is a signal that the near-term should see some type of rally attempt. I'll talk about where that can go later on in this newsletter, but the ingredients have come together offering up a short-term rally. The move down has been relentless. Non-stop selling seemingly day after day. Listen to the numbers here. The Dow has basically fallen 1,200 points nearly straight down. The S&P 500 was down a powerful 110 points at today's lows and get this, the Nasdaq was down ten points shy of an amazing 400 points. 3200 to 2810 at today's lows.



That is stunning to say the least. It's time for relief. Deserved relief for the bulls. Now if the wrong news hits over the weekend, it'll hit a little bit and keep things down to flat. But if we don't get any further bad news this weekend, we should see the markets rally for a few days to a week or two overall. Impossible in this environment to know exactly how long the rally will last. Nothing to get excited about, but a rally is a rally and right now the bulls will take anything that stops the type of downfall that took the Nasdaq down just about four-hundred straight points. I think even the bears have to be happy about what they accomplished, but they, too, are likely full on this trade for the short-term. So the odds suggest a rally ahead to relieve the very oversold conditions that existed at today's lows. The bulls have had a very difficult time, but now it's likely they can catch their breath.

The reason for this massive sell off over the past many weeks is two-fold. First was the markets disappointment in Obama being voted back in as he is not a pro-big business, or any business-really type of leader. Between health care and tax problems currently existing for corporate America, it appears clear now that the market wanted Romney. He seemed to represent the changes the market wanted. In addition, add to this the problems of the fiscal cliff that's looming with little being done to find a solution by both sides. The market has been sending a message loud and clear for all to hear. These two issues have only one solution that would help the market. We can't change who was voted in, but the market can feel better about things if the two sides would work together for the people they represent.

There were some signs of that late this afternoon when the representatives from both sides talked about the need for both to give in some and make the necessary changes. That was when the oversold conditions kicked in for the bulls. No coincidence for sure. If the two sides can talk positively over the weekend, there is the chance that this rally to come will be pretty decent. We shall see what they say. Or don't. The market needs resolution before the last moment. If the two sides bicker until the last minute the market will be quite a bit lower once this short-term rally plays out.

Apple Inc. (AAPL) is the leader, so when it printed a doji today, meaning a close where it opened the day at, it told me that the buyers have finally caught up to the sellers. Getting a bottoming stick is critical, with a stock such as Apple Inc. (AAPL), because it is the market leader. The stock fell exactly $198 dollars before finding its low today. That's truly amazing. Nearly $200 in eight weeks is hard to grasp, but that's what we saw. So when you see AAPL print its first real bottoming stick in that time frame it's a worthy happening.

So where can the market go from here is what we really want to understand.

Let's study massive resistance levels above on all the key-index charts and on AAPL. The Dow has strong resistance at its 20- and 200-day exponential moving averages as do the rest of the key indexes, such as the S&P 500 and Nasdaq. Those levels are as follows. Dow 12,905 and 12,953. For the S&P 500, the numbers are 1375 and then 1395. Lastly, for the Nasdaq, the levels are 2945 and 2950. Very tight numbers on the Dow and Nasdaq on those trailing 20's to the 200's. It shows how weak those sectors are. The fact that the S&P 500 is one and half percent apart shows its relative strength versus those other key indexes. There's no guarantee we'll be able to get up to those levels, but even in bear markets you normally back test them. So it should be no surprise to anyone to see us rally back up to those levels. If and when we get there, you'll look to short when you get the reversal off those key numbers.

One day at a time, but that's the possible road map here. A rally should ensue from here for a while with a decent chance to back test those moving averages.

Be peaceful and enjoy life.

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.


© 2005-2022 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