This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

This Stock Market Is Not for Amateurs

NEW YORK (TheStreet) -- The stock market proved yet again that this year it is not for amateurs.

The DJIA finished the trading week on Friday down 45.98 points to close at 16512.89. For the week, the DJIA was up 1%. The S&P 500 closed down 2.54 points at 1881.14, up 1% for the week. The Nasdaq finished down 3.55 points at 4123.89, up 1.18% for the week, while the Russell 2000 eked out a gain, finishing up 2.83 points on Friday at 1128.80 and up 0.5% on the week -- making it an overall laggard.

The S&P 500 Series ETF  (SPY) volume was once again on the low side with only 84 million shares traded, well below the 119 million share average volume.

As I mentioned in Thursday's article, we may be seeing the start of the market selloff that I have been looking for. According to my own algorithms, the DJIA, the S&P and the Nasdaq were all into overbought territory on Friday when the market was up.

The Russell 2000, however, is the only index that has been trading on its own. It has not been following the other three indices. That raises the question, what indices are correct in this dysfunctional marketplace?

We will know the answer to that question very soon. As a matter of fact. I expect to have that answer early next week. I believe that there is a big down day or two on the horizon.

Another interesting bit of information for those traders and investors out there is the fact that the S&P 500 and the Russell 2000 have been alternating up and down weeks since the week ending March 14. If this pattern holds true, next week should be a down week for those indices.

I have been very cautious in this stock market for a while now. The Nasdaq and Russell 2000 have been in Trend Bearish territory, while the DJIA and S&P have been in Trend Bullish territory. That makes trading very difficult because of the whipsaw action that the markets are delivering on a daily basis.  

I have been positioned for a market sell off recently, and I expect to see that happen as soon as early next week. There is not a lot of buying conviction under the surface of this market. Without much buying force to continually drive prices higher, the ultimate outcome will be a market that will collapse under its own weight.

My algorithm process predicting overbought and oversold signals has kept my subscribers at www.strategicstocktrades.com happy throughout this volatile stock market in 2014. By recognizing the overbought and oversold signals of individual stocks and indices, investors can make buy and sell decisions much more easily and with no emotion involved. That repeatable process is critical for stock trading and investing.

Once again, please be very careful in this stock market. The algo machines are in control and the rug can be pulled out from under this market very quickly.

On Thursday I purchased the ProShares Ultra VIX Short-Term Futures ETF  (UVXY). I sold most of those shares at a 2.56% profit and a 1.59% profit. In addition, I shorted Cabot Oil & Gas  (COG - Get Report) and covered that short with a 1.6% gain. This was all based on my internal algorithm process.

At the time of publication, the author held a long position in UVXY.

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
UVXY $17.35 0.17%
COG $28.40 -1.10%
TSLA $202.99 0.27%
AAPL $126.81 -1.30%
FB $81.45 0.69%

Markets

DOW 18,119.92 +23.02 0.13%
S&P 500 2,102.35 +3.82 0.18%
NASDAQ 4,986.3090 +19.1680 0.39%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs