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
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 Positive Divergences...Market Wants Higher....Banks Atrocious....Fed Scary....

Stock-Markets / Stock Markets 2016 Feb 11, 2016 - 10:52 AM GMT

By: Jack_Steiman


The market is begging to move higher based on how far it has fallen in such a short period of time. Quite the intense move lower, but what makes it look so technically bullish short-term is the very powerful positive divergences that exist in many areas of the market. While the S&P 500 and Dow didn't make new lows you can see by the MACD's, if they had, they would have created massive, positive divergences. The Nasdaq has been lagging badly and did make a new low. That new low has the potential for a positive divergence to kick in. The divergence is nowhere near as powerful as those of the S&P 500 and Dow, but a divergence is a divergence, and the Nasdaq has one, smaller in size though it may be.

There were some statements made in Europe last night regarding defending Deutsche Bank AG, a critically important bank that has been getting killed lately, and then a rally ensued. This rally caused our futures to reverse up, with some real power behind it. We gapped up huge, but then came the reality of the Ms Yellen to interrupt with the good tidings that were taking place. The banks had been rocking up early on, and were responsible for carrying the market higher, but then came Janet Yellen to spoil the move in the banks on a dime. She was asked about the possibility of using negative rates here at home as we saw done in Japan.

While she didn't say yes to that possibility she also didn't say no. She left the door open, which implied how weak things are on the economic front. Banks don't like the prospect of lower rates, and so the selling began in earnest in that sector alone. They are heavily weighted and took the Dow and S&P 500 off their highs. Without the banks performing in the future, it's not easy to get excited about what those MACD positive divergences are capable of doing. Again, those divergences on the S&P 500 and Dow are large. Very large to be honest. The type of large that can bring about many weeks of upside action overall. Yellen took away what would have been an explosive up day for the market. That doesn't mean the market still can't play out at least some of those divergences allowing for decently higher prices in the next few weeks. Only time will tell us what's possible. Yellen is usually the person who rocks the market higher. Today she was the Grinch.

I think what's troubling the market deep down is the lack of confidence from Ms. Yellen. When you look at how our economy is falling with regards to manufacturing and services it's scary enough. The market would look past the numbers if the Yellen would speak in a way that said not to worry. If she would talk confidently about how she sees the economy is improving, and how rates can continue to rise without fear of hurting the economy, we would be rocking up. Keeping in mind, the market ALWAYS want to go higher, and if she showed confidence, the market would run with it. The problem is she's showing fear and anxiety. To even think about negative rates means she's uncertain. If she's uncertain so is the market. We can't know what she knows, so we look to her for signs. We have all learned to read her body language when she talks. Today that body language was one of nervousness. One of uncertainty. She's being honest which is good and necessary.

At least she's deflecting things and hoping things get better, so she can tell a better story later on down the road. She's just being honest and telling us that she's not excited about our economy, especially the global economy, and so things could worsen here at home. This likely puts a halt to anything wonderful for the market once and if those divergences play out to the up side. Try to keep in mind just how far and fast we fell. Normally, even in a bearish environment, you'd see some strong retrace back up. Market wants it, but we'll see how much we can get. The banks today painted a not so rosy picture, but even the banks can be dragged up some if those MACD's play out over the next few weeks, but they'll likely lag behind other stronger areas. Careful where you go if you decide to play long.

It's possible that we'll just meander around, back and forth, for some weeks, with an upward bias to work off the divergence and unwind daily and short-term oscillators. The environment couldn't be more difficult if it tried. So many opposing forces currently at work. Positive divergences versus poor banks. The need to unwind oscillators up versus bears getting more aggressive on rally attempts. Again, we should rally and rally hard, but we'll have to see the banks firm up in a big way before getting excited about a bigger rally with some staying power. Day to day as I try to figure out this nonsense.


Jack Steiman is author of ( ). Former columnist for, 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!

© 2016

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 - 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