Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter


Stock Market Going Nowhere...

Stock-Markets / Stock Index Trading Nov 04, 2009 - 03:05 AM GMT

By: Jack_Steiman


I can try to think of a catchy title but what a waste of time. Only thing to say is what I said. We are Nowhere folks! The tape isn't a thing of beauty for either the bulls or the bears. It's playing, on almost a daily basis, with the 50-day exponential moving average on the S&P 500 while trading above it on the Dow and below it on the Nasdaq. A hunger for lower beta and lower P/E's is the story these past few weeks. That happens when markets, at the very least, are in correction mode. We fell 7% off the highs but there's been no follow through at the 50-day exponential moving average on the S&P 500, and considering we have the financials living there, they will have to falter much harder than they've already done for the S&P 500 to start looking truly bearish in nature.

What appears to be taking place is the market is waiting on two gigantic events this week. We have the Federal Chairman Bernanke’s ruling on interest rates and his thoughts on the state of the economy this week as well as the powerful Friday’s Jobs Report, which will, of course, be on Friday. The market wants insight from both before deciding to take those 50-day exponential moving averages back or losing them for quite some time. Both are very key reports in that the market wants to know if the Fed is going to raise rates in the near future. He won't say if he is outright, of course, but he will hint at it if that's his intention. If he does hint at that, my gut says the dollar moves up and the market falls hard. The market also wants to know if the bleeding has stopped in terms of job losses, and if salaries are moving higher. Also hours worked. With the Fed out tomorrow on interest rates, we will get plenty of fireworks soon enough. The fun is about to begin.

We started the day lower, despite some great merger and acquisition news. BNI (Burlington Northern) and BDK (Black and Decker) were both taken over pre-market at huge premiums to their closing prices. You would normally equate this to a market flying higher before the opening bell rings, but strangely enough, not today, even though we were oversold. We started the day lower and spent the rest of the day going back and forth, although most of the time was spent in the red. A late bid took the S&P 500 and Nasdaq in to the green with the Nasdaq leading up, which is good. The Dow fractionally red on a percentage basis. Again, nothing from nothing, but yet another day where, although it's below the 50-day exponential moving average a bit, the bears were unable to take it down with force. Below, yes, but no follow through by the bears, which leaves the door open to recapture if the news from Fed Chairman Bernanke and the jobs report are very favorable toward low rates and economic growth. A big if.

When markets go lower and look bad, fear rises. The average trader or investor sees red arrows and thinks this is a definite prelude to destruction of equities. People have lived through two nightmare bear markets over the past nine years. The kind seen once in a hundred years, yet they've had to survive the torture twice in just those nine years. Red to them now means the potential for something unthinkable. It's understandable as fear is a much more powerful emotion than greed. Greed requires no emotional energy. You flow with it. There's no pain. Fear is created through bad experiences and thus will always carry more weight.

The question before us, therefore, is whether we're headed for the dreaded bear market once again. I'd be foolish to tell you that we definitely were not. There's always that possibility. In the short term, I don't see anything worse than the old low at S&P 500 1020. 2.5% from here. No fun, but nothing devastating. The reason is, the oscillators on the daily charts. Tremendous unwinding of those overbought daily oscillators has already taken place. The nasty negative divergences have already unwound plenty. All of this doesn't preclude the possibility that we could stay very oversold for a long time, but this is not usually the area one would equate with the beginning of market annihilation. I'm sorry bears, and I could be dead wrong, but short term I don't see anything worse than 1020 S&P 500.

S&P 500 support, critical support, is now 1020 with 1047 resistance. Then we see 1060, 1074 and lastly, 1101. I don't think we have any chance of seeing that level short term. Below 1020 we see 980. Nasdaq resistance is at 2083. 2040 is massive support followed by 1960, a full 4% below. That would be painful indeed. The markets are vulnerable here. Good news is, being ignored somewhat as it was built in long ago in this rally off the March lows at S&P 500 666. This is a VERY DANGEROUS market. Aggressive playing makes no good sense. A nibble here and there such as we did today on the QLD (Ultra QQQ ProShares) is all you should be doing with a tight stop in place. We got QLD at 48.10, but have a stop only 1.10 lower at 47.00. No big losses will be tolerated here. Please go very slow here. Accept what's in place and take measures accordingly. Almost all cash is best if not all cash at times.



Jack Steiman is author of ( ). Former columnist for, 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!

© 2009

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

© 2005-2019 - 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

6 Critical Money Making Rules