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
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Breakout Oh So Close...

Stock-Markets / Stock Markets 2010 Aug 05, 2010 - 01:54 AM GMT

By: Jack_Steiman

Stock-Markets

We can all taste it, can't we?
The market was so interesting today. The day started out with a gap up, then the non-manufacturing report came out with good news, and the market flew higher. We got to 1127 on the S&P 500, but then a very powerful sell program hit, and knocked the Nasdaq from up 17 to slightly red in a matter of moments. It looked bad, but once the market went slightly red, it started to churn. It refused to just quit. That gave the market some real hope.


As the day went along, the bulls began to take back control. With a load of sell supply near 1131, the market was unable to close above 1131, but it closed awfully close to it. Good to see the market consolidating just below the big breakout. It would be far more bearish if the market quit this morning and didn't come back up, but the bulls showed some real strength by rallying back the troops, and taking this puppy higher, near the breakout by days end. A solid day from the perspective of the bulls, who wouldn't give an inch today, when it looked like the bears would take far more than that. A short-term victory, only because there is no breakout, but the bulls will gladly take it.

Now, we look at the internals. The picture painted there is very consistent. On the up days the advance-decline line is strong, and on the down days the advance-decline line is not very bad at all. The majority of stocks hanging strong. Today was no different. Advance-declines were positive by nearly 3 to 1 on NYSE, and 2 to 1 positive on Nasdaq. A red flag would be raised only if this pattern changes on a more consistent basis. For now, the internals remain bullish, and with volume trends solid, add that to the plus side of the ledger. Volume will count significantly if, and when, we finally can clear 1131 on the S&P 500.

There is one major event that really bothers me on a daily basis. The 10-year bond is showing a rapid decline to below 3%. People are so unhappy with the stock market overall that they are willing to take 2.9% over that time period so as to avoid the market. Everyone seems to hate the market, and this is keeping the market from seeing that flood of dollars that would be coming in on the sidelines. The market will need those dollars in time to get it really rocking, or the bulls will run out of ammunition at some point down the road, once the sentiment issues clear up. Keeping an eye on this 10-year bond as it is really worries me for the longer-term. The trend there says this market will get hammered some day, but that's in the moment, and we have time to watch it.

Sentiment is always one of my biggest issues to keep track of when there are extremes. The bull-bear spread came out today showing that the bulls were only creeping higher. No big burst up in the spread, which is very good news for the bulls. 38.9% bulls and 33.3% bears equal a 5.6% spread. This is historically a very low number, and suggests further upside and a break above 1131 on the S&P 500, but, of course, we have to see it first before playing it harder. Until the bull-bear spread gets well in to the teens, if not higher, it's hard to imagine too much sustained downside action in the market unless we get hit by a very powerful group of bad economic reports that show things are really declining rapidly.

Another headache for the market is the refusal we're seeing from the financial stocks. They are set-up better than they have been for a long time, but refuse to make a run up and break out as many other sectors have. The market will need this group of stocks to make things easier on the S&P 500 1131 breakout level. The Financial Select Sector SPDR (XLF) looked ready to breakout, as did the Direxion Daily Financial Bull 3X Shares (FAS), but both lagged badly today, and thus, a no go for now. If we can possibly burst through 1131 on the S&P 500, they'll finally get rocking. The XLF must forcefully clear 15.00 to make the move the bulls can trust.

Tomorrow morning we will be getting retail sales and the jobless claims numbers. These are two big reports, but not as big and Friday morning's jobs report. Three big reports over the next two mornings mean we should have exposure, but nothing too wild, especially from a higher beta perspective. If the numbers come out good, we will make the move above S&P 500 1131. If not, down we go, and then we'll see.

A day at a time here. So far so good.

Remember that I will have extended late day reports on Tuesday and Thursday, and a newsletter on Monday, Wednesday and Friday's.

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 21-Day Trial to SwingTradeOnline.com!

© 2010 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.


© 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