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
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Fed Message.....Global Economy Stinks!!!!...

Stock-Markets / Stock Markets 2016 Jan 28, 2016 - 10:48 AM GMT

By: Jack_Steiman


Fed Yellen made herself known to the world today by saying that she would keep the rates at 0.25 percent, for now, because she wanted to watch how things go globally on the economic front. That's what she said. What she didn't say, but clearly implied, was that the global economic situation is worsening far worse than I had envisioned. I blew it big time, and I don't know what to do. Someone help me as we're toast. She might raise 4 times, but it'll take many, many years for that to happen. She wanted to please the markets a month ago, so she raised a quarter, and said she'll keep raising in the hope the global situation would correct itself. It didn't! It worsened and worsened hard. She's stuck, and she knows it, and doesn't have a clue as to how to right her wrongs. Wrongs she continued after Bernanke blew it, and Greenspan blew it before them. No one worse than Greenspan.

Yellen told everyone things stink, and, thus, after opening and immediate going to the downside, reversing to solid gains, it reversed again after the Fed announcement, and made lower lows. It did hold the last vestige of hope at S&P 500 1869, or the gap up still in place, so that's the number we need to watch closely because once that's lost the market is in short-term trouble, oversold or not. When your Fed Governor tells you things are bad, you listen. When she leaves the Disneyland dream behind you should take notice. She told everyone there is no more Disneyland available for us any longer. Don't worry folks, it'll return some day, and sooner than you think, but, for now, it's on an extended vacation. The Fed blinked today. The market didn't like it. No death sentence yet as 1869 held, but you can't like the message sent from the almighty leader of our 401K's. She blinked and blinked hard. Not good!

What's really interesting is that intraday we took out the recent high in the bull flag off the bottom at 1909. All systems go in a normal market environment. This is not a normal environment, but it was surprising to see that break above fail with such ease. Without even the slightest bit of a fight from the tiring bulls. You have to wonder what the average, always-bullish person is now thinking about the market, and if maybe they'll soon stop chasing moves down, and, thus, stop the process of buying weakness for which they've become so accustomed. How many failures are they willing to take, I wonder.

If they stop chasing, then the job gets that much easier for the bears in terms of taking the market down without a fight. Stock after stock fails miserably on back tests of those lost 20-day exponential moving averages, and since those 20's are now the lowest average due to moving average bearish crosses, the bears are having their way with things. The 50's are above the 20's and the 200's are above the 50's, and that's never good for the bullish case. Stock after stock is getting hammered once they back test. The list literally hundreds long. Probably thousands. Today was a real failure for the bulls even though they held the 1869 gap. Things looked promising. They didn't end that way.

The biggest problem other than the Fed facing this market is the continued poor action coming from the world of earnings. There are always some good ones out there, and some are being graced some mercy due to their falling so much ahead of their reports but overall the news out of earnings land is bad. Apple Inc. (AAPL) and The Boeing Company (BA), two giant market leaders, were just crushed today on their weakening reports. So much bad news coming from these leaders, and not just from their reports on the last quarter, but, more importantly, on the guidance going forward. Looking out ahead to the next quarter or the entire year is not very promising. Some amazing lowering of guidance. They don't like what they see at all. If you're high beta and/or a high P/E stock, it's look out below if you don't completely blow out the numbers and guide upward.

I never want to hold a stock in to earnings, even in a bull market let alone this type of market. The risk is so amazingly high now. Why put yourself through that type of risk? Makes little to no sense to me whatsoever. Now, more than ever, you need to be smart and appropriate. You need to stay ahead of the game by not taking on any unnecessary and needless risk. Be smart and wait for this all to pass in time and it will. For now, we watch 1869 and see if the bulls can hold the line. A huge night of earnings is ahead of us so the focus will be there for the bulls and bears alike. Texas Instruments Inc. (TXN), QUALCOMM Incorporated (QCOM), Facebook, Inc. (FB), and eBay Inc. (EBAY) head the lineup, but there are many others from Tractor Supply Company (TSCO) to Vertex Pharmaceuticals Incorporated (VRTX). A very interesting night ahead. Be careful folks. The road is a dangerous one for now.


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.

© 2005-2022 - 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