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Stock Markets on Hold for Christmas

Stock-Markets / Stock Index Trading Dec 24, 2009 - 03:40 AM GMT

By: Jack_Steiman

Stock-Markets

We had a small gap up today that was sold thirty minutes in to the trading day when the new home sales report for November was announced. It was well below expectations. A real blow to the theory of a growing or an improving economy. In the real world, with unemployment at 17% and climbing, finding too many home buyers on a consistent basis still doesn't appear to be a realistic expectation. The news wasn't just a little below expectations either. It was one of those truly scary misses which makes you wonder about things.


The market sold off but found the usual bid it seems to come up with just about every day. Losses turned in to gains which basically held on in to the close, especially on the Nasdaq. The S&P 500 hitting 1119 area again, a drop above, and then failing to follow through as per usual these days. The usual culprit, the financials, made sure it didn't blast off. Seasonality seems to be holding things up for now. Today was yet another day spent in the lateral consolidation. Seems like forever doesn't it!

The financials are the real reason the S&P 500 seems to be the big laggard in this stock market. Just about everywhere else we look we see a breakout taking place. The financials are showing some signs here of firming but really need to get rocking higher if this S&P 500 index is going to make a move worth respecting. With most of the key stocks within this sector still trading below their 50-day exponential moving averages, the onus is on the bulls here to make these stocks perform better. The bears are in control of this group for now but the daily charts are showing more hope these past many days as the pattern sets up.

Sentiment issues remained the same this week although the bulls are still well over the bears. Not enough, however, to claim that things can no longer move higher in the equities market. There are red flags to be watched in this area of the market but we're not quite there yet. Apple Inc. (AAPL) is reclaimed the 50's for now and that's a necessary part of the bullish equation. Having AAPL and Goldman Sachs (GS) below and acting poorly wouldn't be great for this markets future. The biggest red flag to watch out for is another move higher in the market that takes the bulls to more than 40% above the number of bears. Close but not there yet.

Bottom line is we're holding support but still unable to powerfully move through 1119 S&P 500. It will need to soon I feel as this is the best time of the year for equities. Very favorable and yet it still can't get going. Hopefully soon but we need to pay big time attention to this wall at 1119.

Day at a time as always.

Merry Christmas and Happy Chanukah!

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.

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