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S&P 500, Wilshire 5000, Nasdaq: Current Market Calls for Patience
There are times to anticipate the market and times to stay nimble -- the current situation calls for the latter.
Jason Haver    

In the last update, I noted the market had entered something of a no-man's-land. I also talked about the S&P 500 (INDEXSP:.INX) level of 1873 as key resistance. That level hasn't been claimed yet, and today we're going to look at another aspect of the argument.

Personally, there are times I don't like attempting to predict the market, because it's simply "too close to call," and I think getting too attached to outcomes at times like that can be dangerous. Certain types of markets call for nimble trading and flexibility of opinion, and I think the current market qualifies. 

As I looked across markets during the holiday weekend, I found at least two charts that cast some doubt on any potential bull case. One of these is the Wilshire 5000 Total Market Index (Full-Cap) (INDEXNASDAQ:W5000), which is basically the entire market represented in index form. WLSH throws a wrench into the ointment (I enjoy mixing metaphors) for bulls because the recent low took the shape of a three-wave decline, as shown below.    
 

Click to enlarge

On the other side of the coin, the Nasdaq Composite (INDEXNASDAQ:.IXC) captured the target that I noted was most probable (back on April 7), then bounced off the 200-day moving average and the blue trend line that I scribbled on this chart a few months ago. Bears have done what they set out to do here for a potential fourth wave, so further decline isn't required -- though it's not yet clear if the decline is finished. 
 

Click to enlarge

Finally, the S&P 500 chart. Due to Wilshire 5000 and a few other markets, I'm officially recanting 1873 as a key overlap. I still think it's important resistance, but I no longer believe that a brief break of that level would represent the end of the road for bears.
 

Click to enlarge

In conclusion, the market remains in a no-man's-land. Sometimes markets are clear, and high-probability targets present themselves (as evidenced by five captured target zones so far this month), but other times, staying nimble is our best weapon against the market. I'm slightly inclined to favor the bears on an intermediate basis, but this is as much an instinctive call as anything; with the market in its current position, one thing that won't serve either bulls or bears is complacency. It's worth noting that I've observed some level of complacency on the bull side recently, so it will be interesting to see if the market chooses to address that in the near future. Since it's unlikely the market will hang around current levels for long, a clearer picture is likely to emerge quite soon. In the meantime, trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
S&P 500, Wilshire 5000, Nasdaq: Current Market Calls for Patience
There are times to anticipate the market and times to stay nimble -- the current situation calls for the latter.
Jason Haver    

In the last update, I noted the market had entered something of a no-man's-land. I also talked about the S&P 500 (INDEXSP:.INX) level of 1873 as key resistance. That level hasn't been claimed yet, and today we're going to look at another aspect of the argument.

Personally, there are times I don't like attempting to predict the market, because it's simply "too close to call," and I think getting too attached to outcomes at times like that can be dangerous. Certain types of markets call for nimble trading and flexibility of opinion, and I think the current market qualifies. 

As I looked across markets during the holiday weekend, I found at least two charts that cast some doubt on any potential bull case. One of these is the Wilshire 5000 Total Market Index (Full-Cap) (INDEXNASDAQ:W5000), which is basically the entire market represented in index form. WLSH throws a wrench into the ointment (I enjoy mixing metaphors) for bulls because the recent low took the shape of a three-wave decline, as shown below.    
 

Click to enlarge

On the other side of the coin, the Nasdaq Composite (INDEXNASDAQ:.IXC) captured the target that I noted was most probable (back on April 7), then bounced off the 200-day moving average and the blue trend line that I scribbled on this chart a few months ago. Bears have done what they set out to do here for a potential fourth wave, so further decline isn't required -- though it's not yet clear if the decline is finished. 
 

Click to enlarge

Finally, the S&P 500 chart. Due to Wilshire 5000 and a few other markets, I'm officially recanting 1873 as a key overlap. I still think it's important resistance, but I no longer believe that a brief break of that level would represent the end of the road for bears.
 

Click to enlarge

In conclusion, the market remains in a no-man's-land. Sometimes markets are clear, and high-probability targets present themselves (as evidenced by five captured target zones so far this month), but other times, staying nimble is our best weapon against the market. I'm slightly inclined to favor the bears on an intermediate basis, but this is as much an instinctive call as anything; with the market in its current position, one thing that won't serve either bulls or bears is complacency. It's worth noting that I've observed some level of complacency on the bull side recently, so it will be interesting to see if the market chooses to address that in the near future. Since it's unlikely the market will hang around current levels for long, a clearer picture is likely to emerge quite soon. In the meantime, trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
S&P 500, Wilshire 5000, Nasdaq: Current Market Calls for Patience
There are times to anticipate the market and times to stay nimble -- the current situation calls for the latter.
Jason Haver    

In the last update, I noted the market had entered something of a no-man's-land. I also talked about the S&P 500 (INDEXSP:.INX) level of 1873 as key resistance. That level hasn't been claimed yet, and today we're going to look at another aspect of the argument.

Personally, there are times I don't like attempting to predict the market, because it's simply "too close to call," and I think getting too attached to outcomes at times like that can be dangerous. Certain types of markets call for nimble trading and flexibility of opinion, and I think the current market qualifies. 

As I looked across markets during the holiday weekend, I found at least two charts that cast some doubt on any potential bull case. One of these is the Wilshire 5000 Total Market Index (Full-Cap) (INDEXNASDAQ:W5000), which is basically the entire market represented in index form. WLSH throws a wrench into the ointment (I enjoy mixing metaphors) for bulls because the recent low took the shape of a three-wave decline, as shown below.    
 

Click to enlarge

On the other side of the coin, the Nasdaq Composite (INDEXNASDAQ:.IXC) captured the target that I noted was most probable (back on April 7), then bounced off the 200-day moving average and the blue trend line that I scribbled on this chart a few months ago. Bears have done what they set out to do here for a potential fourth wave, so further decline isn't required -- though it's not yet clear if the decline is finished. 
 

Click to enlarge

Finally, the S&P 500 chart. Due to Wilshire 5000 and a few other markets, I'm officially recanting 1873 as a key overlap. I still think it's important resistance, but I no longer believe that a brief break of that level would represent the end of the road for bears.
 

Click to enlarge

In conclusion, the market remains in a no-man's-land. Sometimes markets are clear, and high-probability targets present themselves (as evidenced by five captured target zones so far this month), but other times, staying nimble is our best weapon against the market. I'm slightly inclined to favor the bears on an intermediate basis, but this is as much an instinctive call as anything; with the market in its current position, one thing that won't serve either bulls or bears is complacency. It's worth noting that I've observed some level of complacency on the bull side recently, so it will be interesting to see if the market chooses to address that in the near future. Since it's unlikely the market will hang around current levels for long, a clearer picture is likely to emerge quite soon. In the meantime, trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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