The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

Stocks

Not Much Good Takes Place When This Happens

by admin August 7, 2024
August 7, 2024
Not Much Good Takes Place When This Happens

As a long-term stock trader, one development in the stock market takes me and many others to our collective knees. It’s a Volatility Index ($VIX) that rises past 20. There has never been a bear market that’s unfolded with a VIX that remains below 20. FEAR, besides the obvious price decline, is the common denominator in every bear market decline.

I’ve shown this VIX chart many times, but now that the VIX has soared since the Fed meeting, it’s certainly an appropriate time to remind ourselves of one simple market fact.

Stock market performance is at its absolute worst with a VIX above 20. Check out the chart below.

This should at least open your eyes to the possibility of lower prices. These calculations date back to S&P 500 ($SPX) performance after April 10, 2013, when the S&P 500 cleared the double top from 2000 and 2007, confirming a new secular bull market was in place.

The rally since Monday’s opening bell has been nice, but very few key resistance levels have been cleared. Early tests are here, or rapidly approaching, right now. Let’s look at a few key indices on an hourly chart. Many times, the declining 20-hour exponential moving average (EMA) provides solid near-term resistance, stopping the initial bullish wave in its tracks. Take a look:

S&P 500 ($SPX)

NASDAQ 100 ($NDX)

Semiconductors ($DJUSSC):

Failing at these key resistance levels doesn’t mean a bear market is underway. It simply increases the odds that the resistance levels provided will be difficult resistance to overcome initially. Likewise, a break through above key short-term resistance isn’t a precursor to new all-time highs around the corner. I’m simply watching these levels as a “piece” of the Q3 puzzle, trying to determine whether the odds of a further decline are increasing or decreasing.

Nine days ago, I held a “Why the S&P 500 May Tumble” webinar, providing members with a ChartList of various price and economic charts they should watch in determining the likelihood of a big decline. That webinar paid off handsomely as our EB members were able to plan ahead for the increasing odds of a significant market decline. Now members, not too surprisingly, are asking in droves whether this is a pullback to buy back stocks cheaper or if this is more likely to be a much deeper correction or even a bear market that’s developing.

These two choices are miles apart and getting this next step right will be the difference between a very painful Q3, one in which a lot of money might be lost, or setting up one of those “buying opportunities of a lifetime.”

I can’t answer all of our members’ questions one at a time, so late yesterday afternoon, I decided to host the obvious next step webinar, “HUGE Selling and Rising Fear: Pullback or CRASH??” This is a members-only event and it will begin at 4:30pm ET, just after today’s close. If you’re not a member, but would like to attend, we’ve got you covered. Simply CLICK HERE for more information and to register as a FREE 30-day trial member.

This is another HUGE event and I’d love to see you there!

Happy trading!

Tom

0
FacebookTwitterGoogle +Pinterest
previous post
QQQ: Critical Levels to Watch as Nasdaq Teeters on the Edge
next post
Google loses antitrust case over search

Related Posts

From Summer Doldrums to Year-End Surge: How to...

May 31, 2024

Market Chaos: How to Spot Bottoming Stocks Before...

February 14, 2025

5 Strong Stocks Defying the Bearish Market!

March 12, 2025

Stock Market Shows Its Magic: An Exciting Finish

June 1, 2024

The Best Five Sectors, #8

February 25, 2025

DP Trading Room: Mortgage Rates are Falling –...

August 13, 2024

It’s May, So Should We Go Away?

May 6, 2024

What More do the Bulls Want?

October 5, 2024

This Is How I Crush The Benchmark S&P...

February 22, 2025

Is It Time To SELL Your Magnificent 7...

July 13, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Is a Chinese chain’s blood orange cold brew the future of coffee in America?

      July 7, 2025
    • S&P 500 Earnings for 2025 Q1 — Still Overvalued

      July 7, 2025
    • Don’t Overlook This Lagging Industry; I Believe It’s Set To Explode!

      July 7, 2025
    • Trump dismisses Musk’s political ambitions as ‘ridiculous’ in sharp rebuke

      July 7, 2025
    • Israel hammers Houthis with airstrikes, rebels respond amid Red Sea flare-up

      July 7, 2025
    • Is a Chinese chain’s blood orange cold brew the future of coffee in America?

      July 7, 2025

    Categories

    • Business (1,284)
    • Politics (3,919)
    • Stocks (1,498)
    • Uncategorized (45)
    • World News (1,277)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved