Tuesday, September 14, 2010

What Is This Market REALLY Trying To Tell Us?

From where i am sitting right now, it's much better to assume that this market is in AN UPTREND that was confirmed with that HIGHER LOW that was printed in late August. The overall pattern that is taking shape on the SPX thru out 2010 has a look and feel of a consolidation within a bullish trend. Sentiment continues to be poor and this rally that started in March 2009 has by been the 'most hated' rally i have ever seen. All this bodes well for the bullish from a longer term perspective. As you guys know by now, i am a short term trader so long projections is not something i do very often but the more i step out the 'shoes' of a short term trader and look around at what is really going on and SHUTTING OUT THE NOISE you hear on CNBC, bearish blogs and twitter and truly and honestly look at things around you will notice that things are not all that bad out there. Sure, we will see some corrections and pullbacks but you gotta hand it to and give respect to a market that refuses to give in to all the "negativity". This in itself is a very bullish sign from a long term perspective.

Think about it this way: If you were short a stock, now the stock refuses to drop and instead teases like it's going drop only to reverse back up and continues to defy: what is that stock telling you? For me, it tells me, that is getting ready to move UP, not down.

Put it this way, 2 weeks ago "The Hindenburg Omen"(an very rare market event that precedes a market crash) was the talk of the town yet this market continues to ramp up. Prior to that Hindenburg Omen, people were looking at that "DEATH CROSS" pattern which once again, the market has managed to shrug off. The indexes are flat year to date: Think about it is that really bearish? Yes, they are down from their 2010 highs but is that really a bad thing? One really strong advance the indexes could notch up a decent 2010 performance come December 31st.

Ask yourself in all honesty: A market that behaves like this, that continues to defy all this negativity/ doom and gloom projections that is thrown at it: what is this market trying to tell us??


Jason Leavitt said...

Great comments Stewie. Thanks.

Stewie said...

Thanks jason. nice to see you here mate.

Sahmtrader - Moderator said...

Thanks, Stewie. Always enjoy reading your material when I get the chance.

Food for thought: the market going against all odds is not the same market that used to give accurate reflection of conditions. All fake, fake dollars, stuffed quotes, cheating, etc. Overall global economy is very very fragile and the US gimmicks will NOT be able to hold the scam up much longer. The currency markets are FAR more powerful than the stock market and no matter how hard they manipulate, they will NOT avoid the inevitable.

We are very close if not AT the first major turn down, imho.

Stewie said...

Very interesting Sahmtrader and i always enjoy hearing what other traders are thinking. Really, in this 'new' market it seems like traders need to be ready for any scenario to be honest. I mean, who would have ever thought or been prepared for that 'flash crash' event a few months ago? Traders need to be extremely flexible and be ready to anything.

SStrader said...

I would have said that it looks like it will go higher in the long term cuz the news about gold "going up forever" is getting rediculous and this market is consolidating instead of dropping.

but i agree with u.

Jack said...

Its the old wall of worry theory and its been one hell of a wall but we are at the same resistance where the last failure occurred so we are either up 300 or down 300.
Either the fed is pumping a bunch of money in right now or the fear of everything paper is driving money into stocks?
Dont fight the Fed?

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