Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market S&P 1375 Support Breaks

Stock-Markets / Stock Markets 2012 Nov 14, 2012 - 02:56 PM GMT

By: Jack_Steiman

Stock-Markets

Best Financial Markets Analysis ArticleThe bears had their chance yesterday morning with the S&P 500 gapping below 1375. It opened at 1371, only to see the bears give it up to an intraday rally that carried the index back to the low 1380's. The bears had to feel bad mostly because losing key support, such as S&P 500 1375, usually happens on a strong gap down and run. They accomplished the gap down but did not succeed on the run. The bulls found a way to hold the line. Then came last night and Cisco Systems, Inc. (CSCO) fooled the masses with a very nice report and some better than expected guidance. More on that later. The futures exploded higher. The bulls felt they had held the line in the sand and now it would be reversal up time. The futures were strong all night, but they began to weaken some as the morning wore on, although we still had a decent gap up open today. It didn't take long before the upside started to erode. The S&P 500 testing back towards 1375 again.



It churned there for a while, but you could feel the weight of the market as it just couldn't gain any further upside traction. Eventually it snapped, and down we went, closing convincingly below 1375 on the S&P 500. Now all of the key index daily charts are below their 200-day exponential moving averages with the Nasdaq and Dow well below. The S&P 500 tried to desperately hold the line, but it just didn't happen. This action puts the bears fully in control, even though we are now officially oversold on the daily charts, which doesn't happen very often but is a definite sign of market weakness. When it's oversold it can bounce up at any time but, for now, the bears are fully in control, make no mistake about that. It would take something special to change the new normal that has just hit the market.

Speaking of something special, that would probably relate to the fiscal cliff and getting some type of resolution or talk of closing in on one to get the market to reverse course. That was what the market was hoping to get today when the President spoke intraday on what may be happening with regard to compromise by both sides. The market wanted a "feel good" story to reverse the selling. Up until the President spoke the S&P 500 was just barely below that key S&P 500 1375 level. It was when he finished up that the market gave into deeper selling, with the reason being that he gave no indication of any progress being made towards a peaceful and appropriate resolution.

He said the fiscal cliff could come and go with nothing resolved but that he hoped smarter minds would prevail and get something done. He didn't sound overly optimistic, and when that became a fact, the market gave it up in terms of trying to hold above 1375. The bulls gave in as they were rightly disappointed. Outside of that type of potential feel good story, there isn't much out there that can come in and rescue the bulls here. The market broke today and did so convincingly. We'll have to learn more as the days progress, but you can't fight what you saw technically today folks. The bears took S&P 500 1375 away from the bulls. That's the bottom line.

CSCO is definitely worth spending a moment on here. Mr. Chambers, the CEO of CSCO, spoke last night after hours with CNBC host, Maria Bartoromo. He said things were going along alright and that he was hiring, but the hiring was coming outside of the United States. He said it was easier working with other countries, such as Canada, as they don't have the same poor tax laws and that they also made it easier regarding health care issues. A sad reality for what is ailing us all. The best companies in the United States are hiring outside of it. How can that bode well for our economy? How can that help with future growth in our business world? It's not only those in business. It's also those who won't do so because of these headaches. Many won't bother risking new ventures due to the rising cost created by health care and taxes. So yes, the stock did well on their report and was rewarded but, in the end, it was a failing grade for what he said about hiring practices for our own country.

The Dow closed below the three and a half year up-trend line on the weekly chart and didn't fight very hard in giving it up. The market is sending a message here to our Government leaders, and you have to wonder if they even care. The leaders of this country need to get together and prevent us from going over the fiscal cliff. If they do not do so the market will go much lower still. 1375 is now massive resistance on any move back up. That is what we should follow as the Dow and Nasdaq are so far away from that level now. If those three and a half year up-trend lines give way, we can fall extremely hard and fast. Stay cash. We're oversold, but we may simply stay that way for quite some time to come.

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 15-Day Trial to SwingTradeOnline.com!

© 2012 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