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
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
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
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
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
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

Stock Market Upside Getting Tougher.....Complacency Soars.......

Stock-Markets / Stock Markets 2013 Dec 14, 2013 - 12:07 PM GMT

By: Jack_Steiman


Never a good thing to see complacency in anything we partake in during our lifetimes. It has a way of coming back to haunt us. Once we think there's only one outcome to things we get the lesson that there's another outcome sitting out there lurking and surprising us when we want no part of it. I mean, come on, things were so nice. Who needs this headache! When complacency hits the market you know there's trouble coming. We had a bull-bear spread coming in to this week at 43.9%. That is a very rare-reading indeed. You also know that we won't stay at those levels forever. There will have to come a time when we likely see levels back in the 20's again. So you have to ask yourself, how do we get there. How could we ever get back down to a spread with a 2 as the first number?

The answer is fear. Fear can come two ways, the not so nasty way and the very scary, very nasty way. The not so nasty way would be for the market to swing about up and down with a small down trend the dominant factor. That would slowly erode things from a sentiment perspective far more slowly, but it would still get the job done over time. The total correction can be as little as 5%. Then there's the really scary way, which includes multiple-down days of triple digits in a row. Some possibly over 200 points on the Dow. Possibly even a day where the Nasdaq loses as many as one hundred points. That'll get the attention of the complacent bulls. We can't know what will happen, but we do know that the 43.9% spread won't be around very long.

I'm sure, at least a few percent were shaved off the top from this week's poor-price action just about everywhere in this market. It's a start and will take quite some time to get things lower, but again, you have to start somewhere. Since we're now down over four-hundred Dow points off the top you can expect a little relief when we get the new readings next Wednesday for the action through today's close. The bull market is very much alive, but expect a tougher road for several weeks to come, if not somewhat longer.

You have noticed one thing different the past two days, if you've been paying attention. We are staying oversold, or close to oversold, for far longer periods of time. Longer than we have seen for over a year. The tide has turned. Upside sustainability will no longer be easy. At some point we will rally from oversold. It has to happen, but it's not likely to get overbought now for some time to come. Willing sellers will come in as indexes back test lost support areas.

Sentiment has us understanding that the bulls are all in. That makes it harder and harder to sustain upside moves. Only when we can get bears to race in with force can we expect easier rides up the positive slope. No bears equal no fuel. No one to cover shorts is not a good thing. With the market sitting at, or near, oversold on the major-index short-term charts tells us this is the way things are now for this market. The change of trend is upon us but again, don't expect down every day. There will be up days.

In order for the market to really get smoked the major indexes will have to lose their 50-day exponential moving averages on the daily charts. The S&P 500 has that level at 1764. That's the number the bears are focused on. It's the only number that matters to them. On the Nasdaq we're starting to see some erosion price wise from recent leaders. Google Inc. (GOOG), Priceline Inc. (PCLN), and Apple Inc. (AAPL) are starting to show weakening action. It's not solidified yet, but there is some hope for the bears when those leaders start to perform the way they have been the past week or two.

Taking out the 50's would allow the bears to press the bulls and force a bull squeeze. This would really knock the market down fast and hard. Lost 50's force the bulls to cover, but more importantly, allow the bears to gain confidence. That's what's absent for now. What this all means is the following. Be smart. Know the market has gotten tougher for the bulls, thus reigning it in here makes a lot of sense. No need for greed here if you're a bull. It doesn't mean that from time to time a long play can't be done, but keep it light and be appropriate. Some shorting can be done on failed moving average back tests. A day at a time here folks. Go slow!



Jack Steiman is author of ( ). Former columnist for, 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!

© 2013

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 - 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