Stock Market Giving A Pass?

Stock-Markets / Stock Markets 2015 May 02, 2015 - 12:46 PM GMT

There really is no other way to explain it. Earnings have been terrible this quarter. To go along with that theme almost all of the economic reports from retail sales to the ISM Manufacturing Report have been poor at best. So why isn't the market crashing out is the question many are asking. Before today we saw a recent sell off, which hit the Nasdaq to the tune of 199 points. That's good selling. 4%. Today we saw the market shoot back up off an oversold sixty-minute event from that selling. While some buying should have been expected based on oversold, the strong move higher caught many off guard.

A lot of shorts were being taken into today's trading. The bears can't be happy to now have a gap up and run after putting in two gap downs that stuck. The whipsaw to nowhere still on going. Very frustrating for everyone. No one knows what to expect day to day. Even hour to hour. A market to nowhere is just that, thus, you get a lot of unexpected moves based on what took place previously. When it seems all good it's not and when it seems all bad, well, it's not. So today shocked everyone, and it came out of the blue, when all hope seemed gone. Exactly what we've seen for five months and counting.

And the beat goes on. Why? Because in the end it seems the market is giving everything a pass. The market has seen terrible everything yet it's not losing critical support at S&P 500 2045. When the market keeps getting bad news from everywhere, and doesn't fall, it's accepting excuses. Fed Yellen the other day said weather was the reason why the GDP was almost in economic recession. Yes, that awful winter was the excuse. Hey, why not buy that excuse if the market wants higher. The market recognizes these earnings are bad, yet only the individual stocks are getting hit, not the market. And make no mistake about it, these stocks are getting ripped apart. Just look at LinkedIn Corporation (LNKD) today. Hide the kids before showing that chart. Scary.

Yet the market didn't blink. The word we have grown to love and respect is here again. Rotation! So while LNKD, and others in the sector, stunk, money rotated around and found homes to keep the market afloat. The market is giving a pass simply because it wants to. Nowhere else to go so in flows keep coming and the market keeps holding up when you think there's no way fundamentally that it should. The bears really have to be beside themselves. If I were a bear I know I'd be more than upset. I'd be say conspiracy, blah, blah. That's not the way it is. The Fed is open about her intentions to keep the market from falling apart. For now, no one is winning, but the bulls are holding in there when they really shouldn't be.

S&P 500 2119. S&P 500 2045. Buy weakness. Sell strength. That's the game for now. The problem is many of the bottoming days are not showing bottoming sticks and vice versa. Full candles up don't follow through. Full candles down don't follow through. We're not getting classic bottoming sticks such as hollow candles off a down trend. We're also not getting classic topping sticks such as black candles off up trends. No DOJI's on either side as well. That's the toughest part of this market. Buying weakness is easy if you get the right type of bottoming stick. Same goes for the other side of the trade. For now, it's more guess work. We don't always bottom at 30 RSI. Sometimes we go much lower or at times we bottom well above 30. A very tough environment. For now, the range continues with no winner at this point in time.

Have a nice weekend!

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.

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.

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