Can The Market Plunge 18%? Tick-Tock…

Tick-tock. Tick-tock. I remember going into houses as a kid where the sound of the grandfather clock in the hallway or living room was pervasive throughout the house. After leaving, I would still hear that sound for hours afterwards.

Funny, that sound from decades ago came back to mind as I stared at the S&P 500's weekly chart. Then I noticed why. The S&P has been in a sideways consolidation for almost three months now. Curious about the last time that happened, I had to go back to early 2011 to get the answer – it was followed by an 18% drop.

I've been noticing that many stocks show a disturbing reluctance to correct. On the weekly charts, the Stochastics indicators have stayed high for what is now an unusually lengthy period. Typically, the weekly Stochastics will return to the lower levels of the charts about once a year.

Yes, with the S&P 500 this did happen back in 2003 and it was not followed by a significant pullback. I suppose a good question to ask is whether 2014 is anything like 2003, as far as economic potential. That's too much for me to think about, as I'm writing this at 4 in the morning. But going to the daily S&P 500 chart, and noticing there are lower highs in the daily Stochastics indicator while the price chart is going sideways, I'm hearing that eerie sound from decades ago. Tick-tock. Tick-tock.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2014 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

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