Still a Bear Market

Trader Talk

The major stock indexes enjoyed a partial rebound of yesterday's mega losses, though volume was a tad light for such gains.

Officially, the NASDAQ advanced 5.0% on 2.4 billion shares, while the Dow Industrials rose 4.7% on NYSE volume of 6.1 billion shares. The leadership profile remains very negative, with 23 stocks making new highs versus 604 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 bulls stepped up to the plate today to prevent a follow-through to yesterday's misery, temporarily delaying any crash run of the quick type. Hopes are rising that the red ink yesterday will move Congress toward a YES vote on the bailout package. We continue to believe that such a focus on the bailout misses the point of a stock market in trouble due to fast-approaching recession. Thus any and all rally attempts going forward should soon fail. Indeed, yesterday's collapse landed in five waves, while today's partial recovery in three. That's classic bear market action that should lead to continuation of lower lows and lower highs. The stock indexes closed at a point where further gains are going to be difficult to come by. A retest of the 2002 bear lows remains our downside target for this leg of the bear.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

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Jury Out on Bull / Bear Battle

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with a mixed close run on higher volume. Officially, the NASDAQ fell 0.7% on 2.2 billion shares, while the Dow Industrials rose 0.1% on NYSE volume of 5.1 billion shares. The leadership profile remains negative, with 100 stocks making new highs versus 218 stocks making new lows.

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

The technical set-up remains the same, with both the S&P500 and Dow Industrials challenging and bouncing off their 50 day moving averages today. The bull/bear battle to dictate the trend for the remainder of the year is held hostage to the current back and forth along those MAs. Commodities continue to collapse, and we reiterate our warning from earlier in the year that these cyclically sensitive groups should be avoided at all cost on the long side. If the bear returns from here all stocks should collapse, including commodity stocks. If the bull continues to run then money should move out of the lagging commodity stocks and into sure growth prospects such as pharmaceutical type of stocks. We do believe the bears will see a big win before the year is out, though we continue to see one more blast-off rally to the 200 day MAs before the end comes for real.

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