Still a Bear Market

Trader Talk

The major stock indexes were down 2% yesterday so of course today they were up a similar amount, with such volatility no doubt good for the business of anti-stomach ulcer drug makers. Officially, the NASDAQ advanced 2.5% on 2.3 billion shares, while the Dow Industrials rose 2.4% on NYSE volume of 5.4 billion shares. The leadership profile remains negative, with 80 stocks making new highs versus 233 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. As trend followers we do not need to be able to predict the markets to make money, and certainly no one can predict stock market turns and trends with any high degree of success over the long term. With that said, here's what we believe to be the higher probability plays going forward. The first is based on Elliott Wave and our experience of the breakdown/pullback historical pattern of expectation. That says since the S&P500 fell in five clear waves over four days prior to today's bounce, and today the S&P500 shows a Fibonacci 50% recovery of points lost during the prior slide, what should follow very soon is a continuation of the collapse, all as part of something very bad indeed for those long the market.

The second most likely outcome is based on our experience of technical analysis, which says those 50 day MAs shown in the charts below look mightly enticing to the bulls, and it wouldn't be a major surprise to see those technical-lines-in-the-sand be the final resting place for this counter-trend advance within an on-going bear market. We have seen no sign yet that the stock market wants to flip to bull mode, and we remain very cautious until the investment ducks start to turn for real. The next down move should be much more scary than we have seen so far during this bear, and we believe strongly that it remains a question of when the next down-leg of bear starts, rather than if.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Next Move Down for Stock Market

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with modest gains going into the close run on higher volume. The leadership profile remains negative, with 104 stocks making new highs versus 219 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, and today's action changes nothing in that regards. Indeed, the push into the green going into the close today looks like the finishing touches being added to close the counter-trend rally that began late last week. It should be all downhill from here.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

No Tradable Bottom Yet

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with the NASDAQ advancing 1.0% on 2.6 billion shares, while the Dow Industrials rose 0.7% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 55 stocks making new highs versus 801 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with every sell-off running in five waves and every bounce in three, all absent any sign of a capitulation spike down and corresponding up-spike in fear for the VIX, which suggests no meaningful or tradable bottom has been reached yet. Speculation in commodities remains high, with investor sentiment remaining ridiculously bullish, and thus that trend is destined for a hard fall somewhere around here. We do expect a summer rally of sorts for the stock market - once a capitulation low is reached - though an outright crash is not out of the question. What walks and talks like a duck is best called a duck until proven otherwise.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Stock Market Crash Not out of the Question

Trader Talk

The major stock indexes suffered another pummeling today, reversing yesterday's rally gains - and then some - with volume a tad lighter than yesterday.

Officially, the NASDAQ fell 2.3% on 2.6 billion shares, while the Dow Industrials dropped 2.1% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 63 stocks making new highs versus 449 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, and the main question when and how will this portion of the slide end? Our best technical guess - based on past bear patterns - suggests we are headed for some of kind scary drop below recent support, and that swoon either reverses very quickly on a big spike in the VIX, or, barring such a spike of investor fear landing to help save the day, the stock indexes suffer some kind of melt-down crash, perhaps a bona-fide scary one destined for the history books. Hard down and up before a few weeks of sideways churn is the more probable of the two, though a 1987-style running melt-down is certainly very possible.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Nothing but a Bear Market Rally

Trader Talk
The major stock indexes traded back and forth the unchanged level today, before a late-day rally surge pushed the indexes solidly into the green by the close. Volume was heavier than yesterday.

Officially, the NASDAQ advanced 2.3% on 2.5 billion shares, while the Dow Industrials rose 1.4% on NYSE volume of 6.1 billion shares. The leadership profile remains very negative, with 52 stocks making new highs versus 806 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The trading action today changes nothing with the overall technical set-up, which remains solidly bearish. We plan to add to our short positions on any continuation of the rally, though bear market counter-trend moves usually come to a quick end. The 20 day MA for the stock indexes is our expected entry point for new shorts.
For Free charts with trading signals and fundamentals ratings, visit AlphaKing

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing