This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Kostohryz: Anxiety on the Sidelines

NEW YORK ( TheStreet) -- Right now, the stock market is facing an interesting psychological set-up that will determine the direction of major stock market indexes such as the S&P 500, Dow Jones Industrials and Nasdaq.

Also affected will be their corresponding index ETFs including the SPDR S&P 500 (SPY), SPDR Dow Jones Industrial Average (DIA) and PowerShares QQQ Trust (QQQ).

There is a palpable anxiety on the part of investors and traders who have been left behind by the massive surge in the major stock indices so far in 2013 to capitalize on any dip to hitch a ride onto the back of the runaway bull market. This is why, up until now in 2013, every minor dip in the major indices has been bought aggressively.

The psychological profile of these folks is such that they are unable to pull the trigger on buying while stocks are rising sharply, for fear of being the sucker that buys at the top. However, any dip in the market may alleviate the fear of being the "last sucker to buy" and psychologically paves the way for these investors to go ahead and purchase stocks anxiously, presumably before the bull market resumes.

Anxiety Among Longs

There is another cohort of anxious investors and traders out there right now, and they represent the exact mirror image of the investors and traders who are anxiously awaiting a dip for the opportunity to buy.

These are the folks who are holding large paper gains from the stellar advance of the stock market thus far in 2013. They are very anxious to preserve their gains and not give them back in the event of a potential market correction.

In this regard, the recent rash of disappointing fundamental macroeconomic data on real income, consumer confidence, consumption, durable goods, ISM manufacturing, ISM services and employment, as well as disappointing earnings data from important bellweather stocks such as Oracle (ORCL) and FedEx (FDX) got these people very nervous. The increasingly terrible situation in Europe has them even more nervous.

Adding to the nervousness of the longs is the deteriorating technical internals of the market. Indeed, there seems to be emerging a rarely experienced consensus amongst high-profile technical analysts such as followers of Tom Demark's system, various Ellioticians and conventional technical analysts that the stock market is due for a significant correction.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs