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

I Told You So: The Market Selloff Is Here

NEW YORK (TheStreet) -- I told you so. I told you traders and investors needed to prepare themselves for lower stock prices ahead.

This was based on in-depth, detailed analysis of where the market indexes are right now. My internal algorithm process is able to point out when the indexes are in overbought or oversold territory. When you couple those numbers with stock index prices that have been moving higher on lower volume, you have a situation that warrants extreme caution.

Chasing the stock market higher is not a recipe for success. Quite the contrary. Traders and investors are taking on substantial risk without realizing it.

On Friday, the stock indexes reacted in an unsurprising way. The DJIA closed down 140.19 points at 16361.46. The S&P 500 was down 15.21 at 1863.40. The Nasdaq lost 72.78 points to close at 4075.56 and the Russell 2000 was down 21.32 at 1123.03. This was all happening with increased downside volume.

For the year to date, the DJIA is down 1%, the S&P is flat, the Nasdaq is down 2.4%, and the Russell 2000 is down 3.5%. I have mentioned that 2014 will be the year of volatility and we have not been disappointed. This has been a stockpicker's market -- unlike 2013, when everything seemed to go higher.

Do not expect to see anything different as we move forward the rest of the year. The majority of big-name companies have reported earnings and the results have been mixed. The momentum stocks of 2013 are no longer the leaders in 2014. Facebook (FB) shares have given all their gains back, post-earnings, just like Netflix (NFLX).

Apple (APPL) was a big winner again on Friday, up $4.17 to $571.94. That is not unexpected. AAPL will now enter into overbought territory on Monday with an up open, according to my algorithm process that is able to flag these types of conditions. I fully expect to see AAPL have a selloff by mid-week.

The risk management process that I continually mention is needed by traders and investors. Protecting your capital in this type of market environment is of utmost importance.

The Nasdaq and Russell 2000 are deep into Trend Bearish territory right now. The DJIA and S&P 500 are still in Trend Bullish territory. Be aware of your surroundings as you navigate this market. The stock market sometimes does not appear to be what it seems, whether you are bullish or bearish. My trend process is a three-month or longer time frame.

If you would like to learn more about my process, feel free to visit our Web site at

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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 $93.57 -1.30%
FB $116.51 -0.19%
GOOG $693.31 0.33%
TSLA $240.15 -3.10%
YHOO $36.36 -0.63%


Chart of I:DJI
DOW 17,729.30 -101.46 -0.57%
S&P 500 2,059.25 -16.56 -0.80%
NASDAQ 4,762.78 -42.5110 -0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs