I thought today was a mixed day because volume seemed mostly light. I watched the tape all day long on different stocks and it was very light trading in my opinion. To me that shows some winding down of interest. Similar to how a stock that gets poor volume can gradually decline and trade sideways. People are losing interest at these current prices, there is a mixed sentiment. However I have seen the market appear to trade light and then shift up, and Fridays sometimes appear light either way, so this isn't the best indicator. However it did give me an uneasy feeling in my gut. I think all the technicals point to us testing the 9000 range on the DOW next week. We broke through the 9500 support levels, we are in the 9400s, we may dip our heads above it briefly but I think we'll see a further decline. One thing that has me concerned is the unemployment numbers. I know the initial reaction was that the market seemed unphased by it, however I am wondering how people in general will feel about their money in a volatile stock market when they are at a greater risk of losing their job. I see more people selling to go to cash where they can feel at least a little safe. Now how this will effect big money who could care less about unemployment? The more fear of unemployment, the tighter people also get with spending their money. I'm talking a weekend of news coverage on how the unemployment numbers are could elevate fear. It's looking like forecasts and announcements are beginning to trickle in to warn people of a decline in earnings here and there because of "the economy". I know nobody wants to hear it but if there was ever a time for a black Monday or an "October Crash", you would think this month would be it. In fact if there wasn't an October Crash this month, we might as well discard that word from our financial dictionaries. I know my opinions don't mean much on this forum or the net, however I would love to hear someone argue against what I've said and maybe balance out some of my thinking. Maybe I'm over reacting and assuming too much.
Dip got bought. No need to pee your pants. No October crash this year. Market will go sideways in anticipation of a Santa Claus rally, which probably will happen.
go read all the business sites from cnbc to cbs marketwatch and online. NOBODYS EVEN TALKING ABOUT BEING DOWN 5%. EVERYONES AS BULLISH AS EVER AND THINGS AFTER THIS SMALL CORRECTIONG RIGHT BACK UP. what nobody and i mean almsot nobody on earth expects is a collapse.
Not sure is "crash" is the right word, but correction is certainly in the cards from these levels. Bottom line - unemployment continues to rise, and don't believe the 9.8 % # - it could easily be double, if you count in everyone (those who are off the coffers, those who have lost interest, those 62 years of age and older who have opted for early SS, etc.). Employment is directly proportional to spending which is directly proportional to GDP. Look for GDP to remain flat to worse this last Q. The NYSE Bullish % index reached 84 last week, which is the highest absolute value in at least the last 12 years (I can't get #'s before that). All indications are that we go lower. We'll see which levels of support do/do not hold as we head downward. Based on my charts, I can see a re-test of 7800 DOW, and if we break that, watch out below !
I don't know if that's quite the sentiment these days, but if it is, that is even further justification for downward action. All you need is to do the opposite of guys like Kudlow, Cramer, etc., and you'll be ahead of the curve.
It appears it will take a few weeks of continuously bad news to get a decent pullback in the markets. This should not be a concern to traders. If you think the market is toppy and you swing trade then go with lighter positions. If you just day trade, then this is a useless topic.
The dip did get bought but only to go up and test resistence and it failed to break through, why? In my opinion, simply not enough volume interest to push it through, again this could be because it was Friday, so it's hard to tell. Maybe there will be more interest next week after everyone get inundated with the near 10% unemployment news over the weekend? I personally don't think that makes sense, however there are some good bargains to be had, the problem is who wants to be long with layoff fears. Granted there are people in right now with old money who took a hit and decided to just leave it in, but not a lot of people willing to throw some fresh new money at the market when everyone is getting laid off and there is apparently nothing being done about changing the trend.
I don't know about 7800 DOW without some sort of very strong news factored in that would justify it. Could you post up your chart and how you are getting 7800 DOW?
Unemployment rate in the US 1910-1960, with the years of the Great Depression (1929-1939) highlighted. Well if you believe in charts, the crash of 1929 happened as unemployment headed toward 10% as well. According to the WSJ, the broader unemployment rate hit 17% in September. http://blogs.wsj.com/economics/2009/10/02/broader-unemployment-rate-hits-17-in-september