Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Poor Jobs....Daily Stochastic's Oversold......2043 Breaches But Holds.....Shocker!

Stock-Markets / Stock Markets 2016 May 07, 2016 - 06:33 PM GMT

By: Jack_Steiman

Stock-Markets

Another interesting bull-market day as there still seems to be nothing that can take this market down with any force. As a reminder, I have spoken about how we still haven't seen any major distribution off tops on any of the key, daily index charts. That's the first big hint that something bad is beginning to take place.


Without heavy volume selling off tops it tells us that the move lower will likely only be temporary. The long-awaited Jobs Report came in far worse than expectations. Forty thousand lower than expectations, which means the economy isn't moving along as hoped, but also tells us that since there was job creation it's not falling off a cliff either. Just simply meandering a little weaker step by step. Slowly but surely our economy is in decline, but not the type of decline that would force big money to give it up apparently. Again, the no-alternative theory. So the economy is weak, but since it's not totally dead, and rates are so low, let's just hang in there and buy up lower beta, lower P/E, higher dividend stocks.

The S&P 500 is leading for these very reasons. The Nasdaq is lagging by quite a large margin. 6% worth, which is a huge separation. We breached 2043 on the S&P 500 today. We saw 2039, and it seemed the selling was about to happen. Apple Inc. (AAPL) testing massive long-term 92.00 level support as well. It was time. The bears were ready to have a dance of delight. Or something like that. A dance they haven't been able to dance since January first. But wait. Out of the blue, when all seemed lost, came the magic bids that kept the S&P 500 above the key 2043 level or the 50-day exponential moving average. With the Nasdaq already below all key exponential moving averages the bulls were counting on the S&P 500 to save the day, and for now it did just that. In the end the bears came very close to a celebration, but that celebration will have to take a back seat to more disappointment for at least another day. The bears are used to it by now. The market to nowhere is still upon us. Boring and dangerous.

One aspect of this bull market that has been incredibly consistent is daily stochastic's on the index charts. When that oscillators gets oversold, anywhere around 15, or lower, the market seems to put in a meaningful bottom. We hit 2 on the Nasdaq and 7 on the S&P 500, and Dow at today's lows. Again, these are on the daily charts. In the past, when markets collapse for a month, or so, stochastic's will find a way to stay oversold. It does happen. Most of the time it does not. Is this the exception time? It can be, but, for now, we'll need more evidence. Since it usually isn't the onus, as always in a bull market, is on the bears to change what's already in place technically and on price. Stochastic's are suggesting a bottom has been put in, but we won't know for sure, and this can be said with certainty. We tested the 50-day exponential moving average on the S&P 500 today with the usual slight breach, but it held perfectly, and, thus, it should equate to higher prices in the short-term. I say should, because with longer-term negative divergences in place there are no guarantees at all. Just hope, for now, since the bulls did what they needed to yet again. And again in to the teeth of the worst possible economic news for the day.

The market has fallen quite a bit, especially on the Nasdaq heading in to today's action. The market is clearly bifurcated, and in most cases that's a bearish longer-term signal, especially when the Nasdaq is trailing behind so severely. It looks like the market is weakening internally, but you have to respect price first and foremost. Price is still hanging on by a thread, but it's not out of the woods. Even though today worked out in a bullish way for the market, there is still plenty to be concerned about in terms of fundamentals, negative divergences and froth. Those monthly charts are still in a terrible way. Economic fundamentals are eroding and the S&P 500 is up to an extremely-lofty, 24 P/E in a declining earnings environment. All those factors should be respected. Never ignore the truth even if truth isn't playing at the moment, because you never know when it'll decide to join the game. The negatives mentioned above aren't a joke, or to be totally ignored. Becoming too complacent can be very hazardous to your wallet.

Respect, respect and more respect. When you lose respect you lose your shirt.

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!

© 2016 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.


© 2005-2019 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

6 Critical Money Making Rules