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 Bulls Punch Back...

Stock-Markets / Stock Index Trading Oct 23, 2009 - 02:12 AM GMT

By: Jack_Steiman

Stock-Markets

Just when it looked like all hope was lost for this rally to hang in there, the bulls fought back today in a big way, engulfing the losses from yesterday. Not much news to go on except some good Dow earnings reports this morning. The market gapped down big on the Nasdaq, but the Dow wanted green. The market was bifurcated with the Nasdaq down 10, but the Dow up 40 an hour or so in. After that, the Nasdaq started to reverse while the Dow kept going. The S&P 500 started lower but it too reversed as the banking stocks started to turn up after the downgrade on Wells Fargo Company (WFC) late day yesterday.


By mid-day the bears had once again given up and ran to cover, allowing the market to turn up harder and close basically on its highs. Solid action across the board other than some commodity and railroad stocks. They under performed as you all know too well. However, strength in those financial stocks more than made up the difference allowing the bulls to hold where they needed to today. With the close well above 1075, the bottom of the gap, the bulls can breathe a sigh of relief while the bears once again having to deal with that feeling of frustration that only the stock market can deliver to ones mind set.

As we came in to today's action, after the close at 1081 S&P 500 yesterday, we were precariously close to losing the top of the October 2008 gap at 1080 just captured, and also losing the most recent gap from 1077 to 1075. Losing 1080 and 1075 would be bad news for the bulls for the short term. With the way the market closed yesterday thanks to that inappropriate late day downgrade on WFC, today seemed hopeless for the bulls other than the fact that we were somewhat oversold on the short-term charts, but that's no reason not to take things down if the bears had anything in their arsenal.

The daily charts were overbought thus no excuses. The bulls would not allow the futures to fall and thanks to some good Dow earnings reports pre-market, the bulls held the levels necessary at the open. This didn't stop the bears from trying the gap as we actually touched 1074 before rocketing higher. Once again it shows how tough it is to lose major gap support without actually gapping below it at the open. This is what the bears must do some day to get things moving in their favor. A gap down and run below a critical support level. Then and only then will things become more favorable to them for at least the short term. 1075 remains the next level of massive support for now. 1101 is massive resistance. Above that and we have a shot for 1121 or the 50% retrace off the March lows.

If you take a look at tonight's charts (COMPQ, SPY, RUT, IVY, BKX, SOX), which I'd like to think all of you do, you will see a chart of the BKX or banking sector and just how close it came to a total breakdown, which if it had occurred, would have sent this market reeling lower. When these wedges break up or down, and in this case down, they can really get rolling. It goes very fast thus the market was on the precipice of a major move lower. You can see today's candlestick and how it held up. Good action for the bulls.

The dollar bounced off the bottom of the wedge yesterday and then gapped up today. This was the action the dollar bulls wanted to see and, of course, our stock market didn't. It didn't take long however for the PowerShares DB US Dollar Index Bullish (UUP) chart to start reversing off its gap up highs. By days end it was actually a drop red and well off the gap up open which normally doesn't bode well for it. Will that be the case tomorrow? Will it break down? No way to know. It remains oversold but anything is possible when an issue is on a confirmed sell signal such as the UUP is. This requires the most watching for understanding future action in the stock market. It will have to break out or break down soon as the wedge is getting tighter and tighter.

Bottom line is today we saw the bulls defend where they had. We are now in a range where a breakout is above 1101 S&P 500 and a break down is below 1075. These levels only matter on a closing basis and not intra-day. Tails from below or above can happen at any time as we saw today when we hit S&P 500 1074.

Very dangerous market out there.

Slow and easy please.

Peace
Jack

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.


Comments

Turok
23 Oct 09, 12:09
Easy Free Market Money

I can't believe the easy money I am making in the market!! AMZN you just can't loose. Only little pull backs and the next day I am richer. It's like money grows on trees. Who needs a casino when the government is giving Wall Street free money? Wow I don't care if the government is fiscally irresponsible with its money. Just keep pouring in the market Ben and Tim. I will ride the free ride of riches. Just wait before the stock has its earnings buy and “better than expected “Free money. I am going out to play golf today and spend the easy market money made.

There is no stopping the market of Uncle Sam’s free money.


Post Comment

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