Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Rallies to Fill Bear Market Gap

Stock-Markets / Stock Index Trading Sep 17, 2009 - 01:45 AM GMT

By: Jack_Steiman

Stock-Markets

Stunning. How in the world did the market just say "I don't care" to 1060 on the S&P 500? We closed at 1068 and that's barely through, but come on, even getting through it by 1 point is impressive enough. When we had the gap down from 1080 to 1060, it was a huge gap obviously and occurred on massive volume. There's no way we should have been able to just move into the gap again with the top at 1080. If we clear 1080, look out above. It shows you the intensity of just how strong this market is.


All of this goes back to what I have been harping on to all of you based on emails throughout the past many weeks, and that's to never short an uptrend in place. It just causes major whipsaws with very few exciting results. Most of those results will be ones that aren't favorable. I know many of you have been telling me that this rally doesn't make a whole lot of sense fundamentally, but we can't play that way. You are probably right. Who am I to say that these moves higher are appropriate or not. They may not be, but so what? Never argue with the message of the market. This means, and this is tough for many of you to hear, but it means stop playing emotionally. Maybe not one point of this rally is right. Maybe things are a lot worse than the market is telling us. The market just doesn't care; thus, you have to turn off the heart, the emotion, and play with your head, the logical side of things, and play what you see and know to be true -- and that is we have been and still are on a major buy signal. That has never shifted. Not for one moment since we took out SPX 956.

We started out with a move higher today based on stronger futures from good overnight action in Asia and Europe. Throw in good news on the CPI, or the consumer price index, and the market was up some. The bears tried a few times to sell this off, but were once again unsuccessful. We spent the day grinding in to the 1060 gap, and without much of a fight we took it out and closed basically just off the highs. Tremendous action from a bullish perspective. 1080 is the top of that huge gap and we'll see what happens if we get there but today's action tells me that we should make at least a try up to that area in short order. Leaders led today and did so in a big way and this kept the bears away throughout the day which allowed the market to successfully get in to the gap. Upgrades to Apple (AAPL) and Amazon (AMZN) gave the market a strong boost in tech land. Once the tech stocks lead, it's very hard to take the market down which took the bears out of the picture today right from the opening bell to the closing one.

The financials picked it back up again today after pausing and under performing for a while. I have talked about this sector being the key to hopefully getting through 1060. Without it the market had no chance; thus, it's no shock that today we saw some very powerful action from this area. It will need to continue performing if this sector has a chance to get through 1080 which would then take the market over 1100. This sector didn't perform for a while but the rest of the market did which kept things moving higher overall. Once things unwound for this group, it came alive again and just in time for the 1060 test. Solid action there and will need to be watched closely for future market insight.

As usual, the dollar struggled and struggled mightily. The inverse reaction by the market that has been in place for quite a few months kicked in again today. The breakdown in the dollar continues to deepen and this will make things much more difficult for the dollar bulls because the bear flag breakdown has now come down quite a ways and thus the bears find it easier to take it down as soon as it try's to get going. The dollar collapse somehow can't be good news bigger picture for all of us but for now, the dollar's collapse is the markets good fortune.

We talked about what comes first, the 1018 gap or the 1060 gap. We're in to that gap now with its top at 1080 and if we take that out, there's nothing until about 1125. A perfect 50% move up off of the whole bear market puts the SPX at about 1150 and maybe that's this markets destiny over time. I can't know that for sure but it seems to be a magnet calling the market higher. Don't count on that happening but you can't argue with what seems to be unfolding here.

Look folks, this can't go on forever and at the top. We'll get caught in a few plays. We've been through this drill before. You have to stick with the primary trend in place until it isn't unless you'll miss everything. Fortunately, we've been in the game. We exited Dicks Sporting Goods (DKS) today with a 5.7% gain in three days, and Mosaic (MOS) with a 2.5% gain, and are still holding three swing positions. You have to play, but do understand there's risk here. Overbought, etc. You know this old drill. Pullbacks can still be bought for now. Until we lose 1018, the trend remains bullish, thus higher.

Peace
Jack Steiman

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Sign up for a Free 30-Day Trial to SwingTradeOnline.com!

© 2009 SwingTradeOnline.com

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

Jack Steiman Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in