The market had spent weeks ahead of the Jackson Hole, Wyoming speech by fed Yellen before making any type of move that included some volatility and a try higher with some force. The thinking was different depending on who you asked. Some thought she'd simply say nothing other than the usual, which was she'll raise when it's appropriate meaning she's looking at the data that comes in from report to report. Others thought she'd definitely talk about raising rates in September. That she'd give a definitive date and then we'd see how the market responds. She played the middle ground. She's very good at being vague. She said that employment is full, and that things are better and that rate hike is coming. We already know one is coming Ms. Yellen. But when? She didn't say. Same old. She'll see. When she feels like it she will.

So she said she will raise, but didn't do it today nor told us when. The market has learned not to trust her. She has often spoke about raising rates, but as time has passed by she has yet to do anything. She tells us she has fears from Brexit or this and that. So the market doesn't trust her when she doesn't give a definitive date. She has earned the mistrust. Bottom line is she gave a bit more information about the need for rate hike but once again was unclear about timing. The market is tired of this. We all are. It tells you she still doesn't trust the global economy nor ours. We can keep the guessing game going. I think that's exactly what she wants. Satisfy many by saying it's coming, but in the end, still doing nothing. Just the way she is. Not good.

So with the market swinging about all over the place today because of the lack of full understanding of the feds future actions, we deal with a market that neither wants to blast higher nor fall down below 2134 on the S&P 500. A lot of nothing with lots of noise in the background. It is tough to play a market that has no real direction short-term. We've gone nowhere for many weeks now. The market has failed at blasting out after the July 11 breakout. It has also failed at breaking down, even though it has had many opportunities. This puts all of us in a difficult spot in terms of learning how to play the short-term. You can stay long, but do so with respect to how tough the environment is. Rotation is still with us, and that will have to go away before we can fall with force. To sum it up, even if we get one rate hike it's clear there won't be a series of hikes and that alone could keep us on the bullish side of things. Go slow.

Lastly, a quick note to recognize the loss of the 20-day exponential moving average on the S&P 500 at 2174. Now the bears have something in their favor. This hasn't happened since June 30. If the bears want it, they shouldn't have too much trouble testing the 50-day exponential moving average on the S&P 500 at 2150. If we lose that, we test the breakout at 2134. If we lose that, the bulls are in real trouble. That's the key breakout level we need to watch very closely. A change of trend here. We shall see if this whole breakout over 2134 on the S&P 500 was nothing more than a head fake.

Have a great 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.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.