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
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Headaches, Headaches, and More Headaches.....

Stock-Markets / Stock Markets 2011 May 15, 2011 - 06:53 AM GMT

By: Jack_Steiman

Stock-Markets

The market had a tough close to the week. The number of headaches for this market is starting to add up. The market spent the week testing key support and finding a way to hold above it. 1335 S&P 500 is horizontal support that the bears worked on over and over all week, but somehow they couldn't take it out with any force. Although they did take it below by a few points intraday on one occasion. The problem for the bulls is that they couldn't muster up enough energy each time it held 1335 S&P 500 to blast it higher. 1370 never came close to being tested back on the up side.


As the week wore on the market seemed to gravitate more towards the lower end of the current range. We had a gap down recovery on Thursday that looked oh so good for the bulls coming into the action on Friday morning. The futures were up strongly early on, but started to erode as the morning wore on allowing only a small move up at the opening. It didn't last as things started to slip from green to red as the day moved along. At one point the Dow was down nearly 150 points. A late recovery which held 1335 was how it finished up, although we closed only a couple of points above leaving the door open to moving below that key level early next week. It won't be easy to lose it, but the door is now open a bit more. In the end, the week did little to settle the score about which way it wants to move for the short-term as it's still trading between 1370 S&P 500 and 1335 S&P 500.

So let's talk about headaches. They are adding up here. Probably the most bothersome for the bulls would have to be those extremely nasty weekly index charts across the board from the S&P 500 and Dow to the Nasdaq, WLSH, LJH, LWM, NYA and more. No matter where you look the negative divergences abound. They are strong negative divergences and they are occurring with oscillators very top heavy, which is what truly makes them so ominous. Elevated oscillators with negative divergences on the MACD, RSI, and Stochastics make for a scary outlook.

Now, with the daily charts in better shape it's not instant gratification for the bears, but the reality is that those negative divergences are going to play out and the best the bulls can ultimately hope for is lateral movement to work them off. But normally it gets worked off with some pretty decent moves lower over several weeks to months. There isn't an important index healthy on those weekly charts, so yes, we can try higher one more time, but sooner or later those weekly charts will have to take over, which means some extreme caution should be part of your daily routine.

Now that I've discussed the number one problem facing this market technically, let me give you a rundown of the other problems sitting out for the bulls short-term. There's everything from major leaders breaking down, to the proximity of 2007 highs, to sentiment, to the end coming up for QE2, to rising gas prices, to copper breaking down and diverging away from the S&P 500. When copper breaks down it's often telling us the economy is not in really good shape. But let's go back to the leaders breaking down. We saw a multitude of big names break below their 50-day exponential moving averages on their daily charts. I'll name just a few although there are scores of them everywhere you turn. Super stocks such as Apple Inc. (AAPL), Baidu, Inc. (BIDU), Sina Corp. (SINA), and Sohu.com Inc. (SOHU) are at the top of the list, but the list is much deeper than that. This is a total change of character for this market. Of course the very worst of stocks can be found in the land of the financials with stocks breaking down everywhere you turn including the ETF Direxion Daily Financial Bull 3X Shares (FAS). The Goldman Sachs Group, Inc. (GS) can't find a bid. In fact, it's one of the worst performing stocks in the world right now. An RSI of 22 on the daily chart for days as it continues to go lower. No bid at all from severely oversold. Just awful.

Stay away from that part of the market if you need to go long. Broker dealers and banks are just horrible right now. Sentiment is Still high, although improving, but once you get a support high reading such as we did at 41.6%, more bulls to bears, it takes quite some time to work off. The market is also starting to anticipate what's next for the market once QE2 ends in six weeks. Where's the liquidity going to come from is what it wants to know. Add in the economic strain of inflation everywhere, especially at the pump, and the market has real headaches to deal with short-term. It doesn't mean we head down right now, believe it or not, although we could. Remember that we're in a primary bull market, but there are mounting headaches, thus, the red flag is up.

The S&P 500 has massive support between 1335 and 1315. Let's discuss the importance of each one and why it'll be very hard for the bears, even with all the headaches out there, to take this market below 1315. 1335 is strong horizontal support. 1327 is the 50-day exponential moving average only eight points below. After that, we only have to look nine points downward where we have strong gap support, and then just three points below that we have the long-term uptrend line at 1315. So we have strong horizontal support, the 50-day exponential moving average, gap and trend line support all within 1.5% of each other. Four strong, powerful areas of support. Below 1315 we have free fall land. Nothing much until we see 1250. This is yet another reason why it'll be so tough. In a primary bull market it's hard to get to the land of free fall for the bears as the bulls will fight with all they have, and they have plenty folks.

This is why shorting isn't going to be easy either. For now, the bears haven't even been able to capture level one of this application. You have to laugh. It's like an I-Phone app. Get through level one and work on level two all the way through level four. If the bears could take out level one they have something to talk about, but for now, they've accomplished absolutely nothing. So yes, the headaches abound, but until the bears get rolling, the market remains almost unplayable for the very short-term. Please play cautiously.

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 constituting investment 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