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Neither Bulls Nor Bears Are Anxious To Commit

  • Written by Syndicated Publisher No Comments Comments
    April 24, 2014

    It appears that both bulls and bears have been mostly waiting on the sidelines for some months, both sides talking about their expectations, but neither willing to back those expectations with action beyond brief short-term trades.

    Is it because the painful whipsawing in the volatility last summer resumed in January, after only a three-month October to December rally?

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    This is a market that almost four months into the year has tried both ways several times, and still can’t decide what the uncertain conditions mean for its direction from here.

    Most recently it was the big weekly plunge two weeks ago in which the S&P 500 fell 2.7%, and the Nasdaq 3.1%. That had the bears thinking it might be the start of something on the downside, but not with enough conviction to sell into it and create follow through.

    Last week it was a big rally week that saw the S&P 500 back up 2.7%, and the Nasdaq up 2.4%. The five straight rally days was the longest winning streak since November.

    Will it have follow through to the upside?

    The situation has the safe havens of gold and bonds also on edge.

    Gold, which had been rallying since December, has pulled back and is threatening to break below its 30-week m.a.

    Bonds, which had also been rallying since year-end, also remain uncertainly above their 30-week m.a., but just barely.

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    Both probably depend on the next sustained direction of the stock market.

    At some point something has to give in one direction or the other.

    When it does, the move is likely to be swift and significant. But so far neither side is anxious to commit, pretty much sitting on the sidelines waiting for someone to make the first move.

    We will just follow the signals of our technical indicators.

    To read my weekend newspaper column click here:  There is More to the Economic Slowdown Than Just Weather

    Subscribers to Street Smart Report:

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    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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