Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Breakout Holds....

Stock-Markets / Stock Index Trading Oct 16, 2009 - 02:03 AM GMT

By: Jack_Steiman

Stock-Markets

The bears tried this morning to take things lower after yesterday's clean breakout over S&P 1080. The futures were down pre-market but worsened once the earnings came out from Goldman Sachs Group (GS) and Citigroup, Inc. (C). The numbers from GS were solid but it had been straight up and needed a pause in the action. It certainly got that refresher pre-market as it was down about 5$. Citigroup, Inc. (C) was awful. Less of a loss than expected but they're still bleeding out badly and this hit the market even harder.



The market got back a small amount of those losses when jobless claims came in slightly better than expected. Bottom line is, we still opened lower and stayed that way for much of the day, but with little follow through on the opening selling by the bears. As the day neared its end, traders on the dark side gave up pretty much ahead of tonight's big earnings reports from Google Inc. (GOOG) and International Business Machines (IBM) allowing the market to finish green across the board. The Nasdaq lagged a bit but still managed small gains after some solid early losses.

When a market clears critical resistance, it's imperative that it holds those gains, regardless of whatever news hits the market and we can see that this took place, even though C and GS never got much of a bid all day. Again, the market was able to hold on to some gains even though some big cap heavyweights didn't do very well. Baidu, Inc. (BIDU), Google Inc. (GOOG), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), and Goldman Sachs Group (GS) all behaved poorly yet there were gains. This is more bullish than not and shows how the big money can rotate to enough places to keep the market moving up even when the big players don't participate.

After hours tonight we have some interesting news from two big players. GOOG had some outstanding earnings and the stock is up roughly 2% or about 10$ in the after hours. However, we had some disappointing news from IBM. The earnings slightly beat the street as did their revenues but only barely so. The stock was priced as GOOG was meaning only a blow out would be acceptable.

IBM is hit hard. It's down about 4% after hours. This negates the good news from GOOG but the bulls can hold on to the fact that at least the futures at this point in time are not being hit very hard because of the GOOG buffer. Of course, as I write this report, it's early. The conference calls from both of these companies can change their stock prices dramatically but for now it's one really good report and one really bad one with the futures only down slightly on the S&P 500.

We now have to focus on the top of the wedges which are at roughly 1110 S&P 500 and 10,250 on the Dow. It will be almost impossible to break through those wedges if we do indeed get there. We will be grossly overbought on all time frames and to make matters worse, we will have even larger negative divergences on those daily charts. Not a combination that would normally allow for a breakout. We would, at the very least, need a stronger pullback to set things back up over time thus it's important to keep those levels in mind. If we get close to 1110 on the S&P 500, you want to start thinking about removing longs and start considering putting on a few shorts. Not too many as we'd still be in a confirmed up trend. The odds would favor some decent selling however from those wedge tops.

Support on the S&P 500 is at 1080 with resistance at 1110. This is the new range to be thinking about. If we lose 1080, we start thinking 1060 or the bottom of that gap from October 2008. The Nasdaq has support near 2200 with support now at 2167 down to 2147 or gap support. Below that we have the 20-day exponential moving average at 2116. There are gap ups now acting as support for the averages thus down side won't come too easily across the board although tomorrow should theoretically see more strength in the Nasdaq and more weakness in the S&P 500 as IBM is weak and GOOG is strong. The S&P 500 will need more watching tomorrow.

Just to go over things once again, please remember how difficult things will get for the averages if and when we approach the top of those wedges. You will not want to be aggressively long at the 1110 S&P 500 area. You may want to short but it's best to see the reversal stick take place if and when we touch that 1110 number. Sometimes you get a breach above and then you get the reversal stick and sometimes you don't quite hit the top and you being reversing. I'll be keeping a sharp eye on this whole process.

Slow and easy as always.

Staying only long for now.

Peace
Jack Steiman

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 30-Day Trial to SwingTradeOnline.com!

© 2009 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.

Jack Steiman Archive

© 2005-2022 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