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 Grinding At The Old Highs.....Nasdaq Nasty Daily Negative Divergence...

Stock-Markets / Stock Markets 2015 Mar 24, 2015 - 10:58 AM GMT

By: Jack_Steiman

Stock-Markets

As the S&P 500 grinds its way to the old highs we're now seeing a true negative divergence on the Nasdaq daily chart. It doesn't have to play out, but it's there and needs to be respected as yet another headache that's hanging over this market, along with froth and terrible looking monthly-index charts. The market seems to be adding up problems yet it still hasn't broken. The power of the fed ever present in the minds of the traders out there. They seem to worry about nothing, no matter how bad the problem may be. The S&P 500 and Dow have the potential to flash negative divergences if they get up to their old highs.


But that's not clear, yet, as the MACD's aren't bad, they're just not blasting as they did before. However, if the price keeps going higher they may confirm price over time. Nothing is easy nor completely clear. If we didn't have the Fed backing this market we would be falling hard. The negative divergence in the Nasdaq 100 is really nasty, and with so many leading stocks back testing and failing, this really looks bad for the bulls. I don't know if the market can hold up much longer, but we shall see. It looks technically as if the market is ready for something bad for the bulls, but we need a big gap down that runs lower all day to start that engine running for the bears.

The biotechnology stocks have had a tremendous run higher. Froth at its very best. Many of them snapped down with gaps lower today, however, and did not recover, nor did they fill those gaps intraday, so they remain open. This doesn't mean the run in them is over as they are first to get love from those frothing bulls, but you have to respect the gap lower today that did not recover in basically all of them. They do not have negative divergences, so the frothing bulls can take solace in that, but they are now showing some MACD crosses from very elevated oscillator levels. So maybe back and forth is the best the bulls can hope for with the risk being a strong move lower.

The market has held up largely because of them, so it'll be interesting to see if the money continues its usual rotation, if they do indeed take a much larger hit in the very short term. Biotechnology stocks were joined by many other areas today, including transports. Kansas City Southern (KSU) in the railroad sector gave a warning that killed the stock and killed every stock in the sector. More and more of this is taking place. Yes folks, that's the sound of low rates for forever more. Nothing good about a lot of things taking place here, but we still haven't seen the big snap down lower. The bears need to get busy soon.

If ever the bears had an opportunity it is now. This moment. Bios snapping. Negative divergences on the Nasdaq. Froth out of control, and horrible looking monthly charts. There's no guarantee the bears will get the job done, but the risk couldn't be much higher than it is now. You don't get bearish until you see the market break technically. The start would have to be a huge gap down that stays open, and closes at or near the lows.

If the market can move laterally for a while and work off the divergences without too much damage then the bears are toast. But, for now, we give the edge to the divergences, but, again, you do NOT get bearish until there's evidence that says it's time. The biggest message being take it slow here, although I'm sure most of you won't. As usual, do what feels best to you, but there is real risk here. Let's see if the bears can finally get it done, or if the action from the Fed is so powerful, literally, almost nothing can stop this runaway train that's carrying those frothed out bulls.

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!

© 2015 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