Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Down Hard Then Reversal.....

Stock-Markets / Stock Markets 2014 Jul 29, 2014 - 11:06 AM GMT

By: Jack_Steiman

Stock-Markets

No one reading this article will argue that things are deteriorating technically. We also have fundamental headaches, such as we saw from the real-estate world today. But focusing on technical action, the bears certainly have made some progress. A nice gap down now in the way of the bulls making their task of sustainable upside far more difficult. That said, we started up a hair this morning, only to see the futures fall apart just after the open. A real swoon lower with the S&P 500 falling well over ten points quite rapidly. It looked bad as the 20-day exponential moving average was getting taken out with relative ease.


However, shortly thereafter, the sixty-minute index charts got oversold with readings of 30 RSI, or lower, and back up we went. The indexes mixed with the Nasdaq down a hair, while the Dow and S&P 500 were up a hair. The bears let it get away from them as the rally allowed the indexes to all finish back above their 20-day exponential moving averages. The S&P 500 losing the 20's would be huge for the bears, but once again a tail and tails mean it won't be easy for those bears. Nothing will be easy for either side, but at least the bulls can feel better about rallying back above those earlier in the day lost 20's. A nothing day when all was said and done.

So when is bad news good news? Once again, the rally seemed to coincide with bad news from the economic world. Housing permits dived lower. The stocks in that area were very hard hit to the down side. That said, bad economic news equates to good news for rates staying on the very low side. Fed Yellen is not anxious to raise rates as long the housing market and the economy overall are struggling. The forced bull is with us and not showing too much in terms of going away.

The GDP reports are poor. Housing is poor overall, with small pockets of good news but again, overall not very good. The Fed is going to need to see consistent good news from the housing market before she's overly anxious to start her rate raising cycle. Trying to understand when she'll raise is silly. She'll do it aggressively when the economy can stand tall without her help with low rates. Still bad overall economic news leading the lower rate cycle.

Bottom line, it's all about losing the 20, and then the 50-day exponential moving averages on all the major index daily charts. Until that moment occurs, meaning losing the 20's you shouldn't even think about shorting for the most part if at all. Do what feels right to you, of course. And once we lose the 20's, things don't truly turn bearish until we lose the 50's. The numbers are as follows.

On the S&P 500 the 20's are at 1972 while the 50's are at 1949. Have to lose 1949 with force and volume to get legitimately bearish. On the Nasdaq the 20's and 50's are at 4422 and 4353 respectively. When 4353 is in the rear view mirror the bears can celebrate. Losing it on big volume would be more confirming. You can play long, but safest is playing lower beta, lower froth stocks. You know the drill. Froth is the big headache that can take this market down without provocation. Day to day for now folks. Aren't we all.

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!

© 2014 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.


© 2005-2022 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