Last night we had the second debate between Clinton and Trump. The market wants the status quo because if Trump wins, he said he would remove fed Yellen. That's not what this stock market wants. It wants Yellen since she, and she alone, is responsible for quite a bit of the wealth most have in stock market gains over the past many years. If she goes away, it is quite likely rates will go up quite fast and kill the market. The market wants a democrat since this will make certain that Yellen will remain in office, and, thus, the world of low rates and, therefore, more Disneyland is possible.

It seems that most think Trump made no progress last night. I didn't even watch. I'm going by polls and how the market reacted. Clearly it thinks Clinton is still leading. If it ever thought that was in danger, we would see much lower stock prices. The closer we get to the election finish line, the more the market will celebrate if it thinks Clinton is still in the lead. The market clearly wants no part of a major change in politics, so, thus far, all is good within the world of insane stock prices. One more debate to go. We shall see how the market reacts to that one as time moves along, but, for now, it appears the market feels the democratic party will still hold the office of President once the election has passed.

The Nasdaq 100 is leading, and that's what a bull market wants to see when going northward in price. When the S&P 500 and Dow lead, it means folks are looking for safety, and safety has no place for those aggressive, frothing bulls. The S&P 500 and Dow charts have two gaps to clear, while the Nasdaq 100 is rocking along near its old high. That said, the Nasdaq 100 is dealing with a significant negative divergence on the daily chart. Will it ever matter? Hard to say as this market has done a great job of ignoring those types of divergences for quite some time.

They usually play out no worse than a lateral move over several weeks to unwind it. If the divergence ever kicked in this market would get smoked as it's quite large in nature. The market seems only to focus on political news and anything done by fed Yellen. Some day that will go away but it doesn't appear to be any time soon. Maybe the election has to come and go before the market focuses on some truths that are out there. The only thing we know for sure right now is the Nasdaq 100 is leading in price, and that means folks are NOT looking for the safety play. That will have to reverse before the bears can find any hope for themselves.

So yes, we are still stuck between the two key levels of 2100, or trend line, and 200-day exponential moving average support and 2194 or the old double top. I have given up trying to figure out which will break first but the bulls are still in control above 2100. All the market has done since the double top at 2194 is base out while trying to unwind overbought oscillators. Nothing bearish about that. Don't get too aggressive would be my best advice between these two key levels of support and resistance. Find the occasional play, but understand your environment. Those who have over played the past few months probably wish they has remained more patient. Sadly, day to day continues.

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.