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
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Strong Week...Friday Reversal?

Stock-Markets / Stock Markets 2011 Apr 02, 2011 - 05:49 AM GMT

By: Jack_Steiman


This is the question we have to ask ourselves tonight. The market had a very nice week with today being the day we tested back up to resistance on both the S&P 500 and Nasdaq. The old high on the S&P 500 being 1344 with some resistance at 1332 first. We hit 1337 today right in the middle. The Nasdaq had strong horizontal resistance off a gap down at 2800 to 2808. We hit 2802 today on the highs. So in essence, both indexes hit their strong resistance levels today. The reason this is so important to look at is because we want to see what happened after resistance was hit.

The answer is, we reversed some with the S&P 500, Dow, and Nasdaq all printing black candles, meaning on balance sellers for the day after the gap up open. We gapped up, hit resistance, and then fell slowly throughout the day. Not great when there's a good run up and then hit resistance. Not terrible either. It's not a death sentence by any means, but it does suggest that we should see some attempt by the bears to sell things off a bit early on next week. Good news on the big Jobs Report was the reason for the gap up. Good news was important in terms of seeing what the market could do at these big resistance levels. Good news on the jobs front certainly offered the bulls an opportunity to clear those big levels of resistance. It didn't happen. They came close, but in the end, the bears were too strong to get through them. So, in the end it definitely was a nice week for the bulls. But now we should expect chop at best and some down side at worst due to those black candles at resistance. Nothing to run for the hills for. A breather if you will. A chance to unwind things. We'll know more Monday once we open up.

There is always something interesting to point to if you want to take an opposing view of what's taking place bigger picture. We all know the market looks fine overall. However, if you want to think more from a bearish perspective, all you have to do is look at those semiconductor stocks. The Semiconductor HOLDRs (SMH), or proxy for those stocks, really took a big hit late in the week and broke down below support. Big move down today on increasing volume through both its 20 and 50-day exponential moving averages.

Not good action by any means, especially since this sector has been leading on the most recent move up. It engulfed and broke support, which is just not normal action preceding a regular pullback. Usually it prints a Doji, or small black candle, such as we saw on the regular index charts today. Not this group, however. It's a red flag and keeps me on my toes as I try to understand the bigger picture message the market is trying to send.

This type of behavior, fortunately for the bulls, is not wide spread by any means. If it was I'd say we made an important top for sure for a very long time to come. It's more unclear now simply because the majority of sector charts are far more healthy. I won't worry about it too much, but I will be interested in watching how much of a follow-through takes place next week in this important economically sensitive area.

There is some life being shown by those pesky under performing financials. Nothing to get too excited about as the Direxion Daily Financial Bull 3X Shares (FAS), or aggressive proxy for this group, tried to break out today over 31.00 on a closing basis, but failed to complete that move at the end of the day. It was exciting there early on as it moved decently above this 31.00 level, but the end of the day took away the short-term hope that this area was about to rock higher. Maybe that will take place once this market calms down a bit off today's black candles. For now, we hold hope that it at least made some effort.

If the FAS can explode and hold over 31.00 on a closing basis, it would send the financial bears packing for a while as they would need to look for another partner to take down. They'd know without question that their days of controlling this area of the market are over for at least the short-term. If the market does chop around or fall a bit as I expect here, it will be critical to watch how much relative strength these stocks show. If they don't fall much while their oscillators hold up, watch out above. We'll know the answer sooner than later.

So now we know the market had the ability to complete those inverse head-and-shoulder patterns, which play out far more than their brother in harm, the head-and-shoulder's pattern. The reason being is that market go up far more than they go down. The SPX measures a bit over 1400 if it plays out over time, but how this market pulls back is key to learning about the odds of it happening. A right shoulder would be perfect here, thus, some selling would be fine. I want to see the SPX hold above 1290, and the NDX above 2700. If we fall below those levels the pattern is voided out. There's lots to watch and learn, and for now those are the key support levels to keep in mind.

For now we watch and learn and keep new plays at a minimum for now. Maybe the market will find a way to just keep blasting off upward and out, but those black candles across the board today suggests it won't be easy for too much upside in the very short-term. We will learn a lot next week, but for now keep it light.

Have a fun weekend and do something nice for someone because you can. Don't forget to inhale those kids as well.



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 21-Day Trial to!

© 2011

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.

© 2005-2019 - 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