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
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
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Stock Market Keeps Fooling The Masses....

Stock-Markets / Stock Markets 2011 Oct 25, 2011 - 02:46 AM GMT

By: Jack_Steiman

Stock-Markets

And that's normal behavior. It rarely moves in the direction of the masses, especially for any extended time period. We have seen the masses get too bearish for quite some time now. It's approaching two months' worth of pessimism at extremes. The last five weeks have been off the charts. The market has exploded in those five weeks. Again, that's normal behavior.


We came into today wondering if the market would be able to be up again as the weekend brought about lots of fear regarding Europe. Would the right things be getting done by Germany and France in terms of working out a solution to what is hurting all of Europe? The threat of numerous defaults coming from many different places beginning with Greece and working its way towards Portugal and Spain. Talks did take place over the weekend, and really nothing much got accomplished. Is it death to our markets? Not at all as we await a final vote on what to do this coming Wednesday. The market, for now, is ignoring things there until there's a conclusion of some kind. Many are asking, shouldn't we be more worried. Of course, in theory, we should be.

The sentiment just won't allow for too much in terms of selling. If there's very bad news out of Europe on Wednesday, the market will take a nasty hit. No question about it. My guess is, it would be a buying opportunity. Most folks still think the market is all nonsense and deserves to go much lower, and while we get an update on that thinking this Wednesday, you can hear it all over the television stations that do business news. I heard myself this morning on CNBC. Beware. In time, that may be correct. And as I said, we can pull back at any time from here from overbought short-term charts, and the fact that we're so close to massive resistance at S&P 500 1260. Selling right here wouldn't necessarily be a death sentence at all. Again, I think selling can still be bought for at least a while longer. Anyway, today was another good day for the markets with the Nasdaq leading. That's always good news for the bulls.

I think the most interesting thing taking place here is the news out of Europe. When I look at it from a distance, it seems to mirror our headaches from 2008. Not a pretty picture to be sure. There doesn't seem to be a painless solution to the problems at hand, yet the markets are giving Europe a free pass, and I think I understand why beyond the sentiment issue taking place. Our markets, and likely their markets, too, smells a Bernanke coming with massive influx of cash to keep things flowing; a QE type of program that will keep their banks afloat, while the heads of these countries try to find the right solution. I am not personally in favor of QE type programs, because they delay what appears to be the inevitable conclusion of the situation. It never seems to end well does it! However, that said, maybe the markets smell out something we don't. Hey, what do I know really? I am not involved on that end of things and wouldn't know what is, and what is not, available to them to make things better in the long run. The market is acting as if something longer-term may work out, but that's all conjecture for now. Maybe it is only sentiment, and once that's out of the way, down we go. But the set-ups just aren't confirming that for now. Only time will tell.

For the first time in seemingly forever, the financials made an important move today technically in a bullish fashion. The Direxion Daily Financial Bull 3X Shares (FAS), or the three times proxy for the financials, made a strong gap up and break over its 50-day exponential moving average and held it easily into the close of trading. Something like this hasn't happened since these stocks got crushed a long ways back. Goldman Sachs (GS), Wells Fargo (WFC), Citigroup (C), and American International Group (AIG) were among some of the financials that had a good day today. Does it signify anything relevant? You'd have to say yes, even though it doesn't feel right to say yes. You may want to take it as a meaningless head fake, and it may be just that, but the oscillators say it's meaningful, and definitely not meaningless. It makes me shake my head, which is good because it means I don't trust it. And that's exactly what I'd prefer to do. It keeps me honest and from getting too bullish. We have to watch the behavior of this breakout for a while and see how far it runs before tiring out. More importantly, when it sells off, will the key 50-day exponential moving average hold as support?

If it does then the move is for real. You can often, if not always, judge the truth of a move in how it deals with taking out resistance and then back testing it as support. Very interesting times. Watch the 13.70 area for that back test. If it fails, you know it was nothing more than a head fake. But we shall see soon enough. The financials are finally playing a bit of a game of catch up to the rest of this market.

So we watch and learn from here. We took out key resistance on the S&P 500 at the 200-day exponential moving average at 1235. There was, also, strong horizontal resistance at the same level. Good clean breakout today. Now we run into the monster triple-bottom breakdown, bear-market breakdown level of 1260. What can, and will, the market do with it?

Taking it out on the first try is extremely rare, indeed. If it holds close to it on any selling, however, that would be a prelude to a breakout over time. 1200 down to 1175 is massive support. 1235 is first support because of that 200-day exponential moving average breakout which took place today. It would be more bullish if the bulls can hold this level on any selling to come, but if it doesn't, it's not the end of the world for the bulls. Holding above 1200 down to 1175 is key. Very interesting times are upon us folks. We learn as we go.

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