Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Finds A Way...Expect Some Chop Next Week...

Stock-Markets / Stock Markets 2011 Feb 26, 2011 - 04:35 AM GMT

By: Jack_Steiman

Stock-Markets

It found a way to get back through the 20-day exponential moving average. The Nasdaq tested down two times yesterday below the key 50-day exponential moving average, but closed above while showing a positive divergence on the 60-minute short-term charts at that double bottom. The close above with the positive divergence told us a move up off oversold was on the way, but I didn't expect the 20-day exponential moving averages to be captured back in one day. This is why you never short a bull market. You should rarely play counter trend. If you want cash that's fine, but counter trend playing makes little sense. 2769 was the level the Nasdaq needed to take back and it did just that. Nothing explosive above, but above, nonetheless. Impressive. The price of oil had led this market lower. It printed near 103.00 per barrel yesterday, and that was the reason for the brief loss of those 50's on the Nasdaq. The S&P 500 and Dow never fell below.


Oil put in a huge reversal stick lower yesterday and not coincidentally, the market started to recover. Today was the follow-through back up, although the market has tremendous resistance not far away due to a large open gap from the recent selling. Oil took us down and oil took us up, and because it's such an unclear situation overseas, you really can't count on things staying too stable with regards to the price of oil. If things get violent, oil starts to run up, and if things calm down, oil goes down with it. Unrest brings higher prices unfortunately. So it tells us nothing is truly safe as things work themselves out overseas, but it was good to see oil pull in yesterday in such a dramatic fashion. No one wants to see oil surging over $100 per barrel. The inflation risk would be terrible for the economy and for the stock market on some level. For today, the market found a way to creep back over the 20-day exponential moving averages and this takes some of the steam away from the bearish case short-term. Not totally by any means, but for the moment it's better news for the bulls.

If the bulls want some good news from today's action it is that the market may be setting up a large symmetrical triangle which normally plays out bullish, if the pattern preceding it was bullish, and it was. There is never a guarantee as any triangle can break lower. However, it is good news technically, if we can set up this triangle. It offers up the possibility that the lows on the Nasdaq at the 50-day exponential moving average the past two days may act as great support on any selling to come. The triangle represents the bulls ability to hold things up until they unwind deeply enough on the major oscillators.

There is no time frame for the length of these triangles, but the best way to play is to buy whenever you get closer to the bottom of it, and go mostly cash as you get to the top. You don't really want to fool around shorting much due to the primary trend being bullish overall. Make no mistake about that folks. It doesn't mean you can't short at all, but doing too much in that area will likely cause major frustration. Triangles are very emotional with strong swings both ways. Best to play in the direction of the overall trend and as you get closer to the bottom of the triangle.

I'm always looking for a change of character and whether that change is relevant or not with regards to the market in the short-term. Over the past two days we had some earnings reports that were rewarded, rightly so, or not, but we saw many of them print black candles by days end meaning on balance sellers for the day once the stocks gapped up at the open. Not the very best of behaviors. We saw that from Priceline.com Incorporated (PCLN), Salesforce.com (CRM), and Deckers Outdoor Corp. (DECK) over the past two trading days. Is it really relevant? Not sure. It could be just a timing issue for those plays as the market has been slightly down trending the past week as we all know.

Some stocks did hold the majority of their earnings gains, but some leaders like the ones I just mentioned didn't print the very best of candle sticks to be sure. It's just a small red flag, because, ultimately, it's the market action overall that talks, and today we saw strong action in the overall market price action. You don't want to say the whole market is in trouble just because some leaders didn't print the best candles. Clearly we saw money come in to other areas and maybe these stocks just got a little ahead of themselves and needed a rest, thus, the black candle sticks by days end. It's just important to note things as they develop. You're always trying to learn I would hope.

The market gapped up today after the successful test of the 50-day exponential moving average on the Nasdaq. This is extremely important as it puts a critical level of support above that 50-day area. If the market had moved up today off a flat opening, the technical shape of the market would be much weaker than it is now. Gaps offer wonderful support, or resistance, depending on where they occur, of course, and this gap off the 50-day test is huge for the bulls as it brings about an added level of safety to their minds when determining whether to buy or not. If they think they have good support close by in both the gap up and the 50-day exponential moving average, they will be more willing buyers. Gap and 50-day so close together really adds confidence to their game.

Good to see the bulls find a way to get things rolling off the 50-day test. Often what can happen in an overall bigger picture bull market. With 2808 now tough resistance for the bulls, at least now they can say 2715 and 2751 are good levels of support. Take a look at our 6th chart below of the Nasdaq to see whether you can locate these levels. Expect a pullback of some type short-term if we test up towards our 2808 Gap on the first test then we could test back down to one of our lower Gap areas. Thus, expecting some choppy action in the week ahead. Slow and easy as always here folks.

Have a great weekend and do something nice for someone because you can.

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!

© 2011 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 constitutinginvestment advice. Trades mentioned on the site are hypothetical, not actual, positions.


© 2005-2019 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

6 Critical Money Making Rules