What to expect tomorrow in the stock market

The stock market indices are at oversold extremes, and the decision support engine's pattern-recognition algorithms have found no instance in the past century when such oversold extremes weren't immediately followed by a multiday to multiweek rise.

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Therefore, within the coming three to 13 trading hours, a short-term rally should begin. Click here to see the following chart in a new window.

The McClellan Oscillator closed Friday at , which is about as oversold as it gets before a relief bounce arrives. The only times a deeper reading occurred in the past year were at the Aug.

All eight tests of the to zone were followed by sharp, multiday rallies. Second, as noted in the yellow box, Thursday and Friday closed with the daily sentiment index courtesy of trade-futures.

Yes, the Stock Market Will Crash, but Only After This Brief Rally - TheStreet

This is like the reading at the Aug. Third, the stochastics are now as oversold as they were at the Aug. The orange line, crossing , is the lower three-standard-deviation band, which contains Although the August decline pushed below this statistically impossible-to-maintain extreme, this revolution of crowd panic is less severe, suggesting at least a near-term bounce.

Indications have started to show since the Whole Foods deal was announced. Let's run AAPL through our decision support engine. History shows SGG's decline is about to bottom. This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

This will happen once the VIX closes back below its upper Bollinger Band , which closed Friday at As you know, the DEFCON scale is used by the military to describe the country's readiness level for attack by outsiders. However, it's an interesting exercise to do something similar when there are growing threats of attack on your wealth. DEFCON 5 is the lowest state of readiness, when investors don't really have anything to be worried about, as stocks are rising and appear to have the wind in their sails.

As economic conditions become strained, and market internals warn of weakening structure, DEFCON must rise, meaning a lower number; from 5 down to 4, and so on. The stock market's worst week of a new year in history tells us to become more ready for a period of unease that can be considered an attack on our wealth.

Therefore, different actions must be considered. Then, once all four of these major indices close below the August lows, we must adopt DEFCON 2 short exposure sell stops placed at the October lows.

For example, some short exposure, some precious metals exposure and mostly cash and equivalents. The last is a tricky term, as many investors think yield-enhanced, or high-yield, money market funds are cash equivalents.

Just What Will The Stock Market Do Tomorrow?

Cash equivalents means three-month Treasury Bills, which are currently as risk-free as you can get. Remember, in times of financial distress, it's more prudent to worry about the return of your capital, than the return on your capital. If you weren't informed back then as to the proper, objective action and timing, you are now.

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Find the product that's right for you. Jan 16, Prev 0 of 2 Next. Jun 20, How to Play Apple's Upcoming Bounce Let's run AAPL through our decision support engine.

Look into the Future with Stock Market Indexes

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