Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Benefit of the Doubt Must Go to the Stock Market Bulls

Stock-Markets / Stock Markets 2010 Mar 02, 2010 - 05:15 AM GMT

By: Steven_Vincent

Stock-Markets

Best Financial Markets Analysis ArticleA quick look at a chart of the SPX shows that price has essentially gone nowhere since October.  Essentially there is no trend at this time and there hasn't been since October.   Another leg down from a lower high would create a 6.5 month head and shoulders topping pattern.



Today equities have broken out strongly through shorter term resistance. BullBear traders have been long from the swing bottom near February 5th.  We are going to maintain our long positions and give the benefit of the doubt to the bulls.  Taking some profits as price enters the described resistance zone in the 1126 area is advisable, but we may want to hold at least half of the position as SPX appears to have forged an intermediate term reverse head and shoulders pattern which projects to 1170 (distance from neckline to head is 65 points added to neckline break).


The price close and 14 day MA of the Put/Call ratio is consolidating at its highs and the close is making a series of higher lows even as the market has rallied.  The persistence of fear in the market may make a top elusive until the 14 MA comes down to .80 or lower.


Gold is still consolidating but holding up well. Even during a sharp rally in the dollar today, gold did little worse than consolidate. It also appears to be creating a reverse head and shoulders formation. A run to the neckline to complete the head as indicated in the chart would be the next stage. Then a pullback followed by a rally would form the right shoulder.  A similar (much larger) pattern launched the most recent bull run from August to December.


The Euro appears to be undergoing a fairly extensive and complicated bottoming process which could produce a more significant rally than otherwise thought. On the other hand, we cannot discount the possibility that this formation is actually a continuation pattern. A
bull move in Euro would likely power equities to complete the reverse head and shoulders pattern as well as a strong move in gold. The fundamental backdrop appears set up for some kind of news event which gives hope to the market that the European debt crisis is blowing over (unlikely). Today's word was that Great Britain is the new Greece.

The setup appears to be for a rally to a double top or new highs in most markets as the dollar sells off and the Euro rallies.  Once the reality of the European sovereign debt debacle reasserts itself, selling may be renewed.  This is a process that may take several months.  There appears to be significant potential for the US Equities, the US Dollar, US Treasuries and Gold to all act as short to intermediate term safe havens during a period of European instability.

The US long bond looks like it wants to breakout in a setup which evokes the market prior to its 2008 panic run.


It's interesting that the Swiss Market Index has broken strongly to new highs.  If a major debt implosion is hitting Europe it would seem unlikely that the stock market of the continent's banking center would be performing so well.  Perhaps there is a message here.

For a more detailed analysis of the equities, commodities, precious metals and forex markets watch the BullBear Weekend Update.  Here's the first of 10 segments of a 110 minute report:

To watch the full report register to enjoy a one month free trial of BullBear Trading Service:

http://www.thebullbear.com/group/bullbeartradingservice

Good Trading!

Disclosure: No current positions.

By Steve Vincent

http://www.thebullbear.com

The BullBear is the social network for market traders and investors.  Here you will find a wide range of tools to discuss, debate, blog, post, chat and otherwise communicate with others who share your interest in the markets.

© 2010 Copyright Steven Vincent - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Carl
03 Mar 10, 09:48
Bullish ?

You say - BullBear traders have been long from the swing bottom near February 5th. We are going to maintain our long positions and give the benefit of the doubt to the bulls.

But on 7th Feb you said you were bearish ?

http://www.marketoracle.co.uk/Article17072.html

Steven Vincent has been bullish since March but has turned bearish on the intermediate term and is ready to turn on the long term as well. Larry Katz has been long term bullish since March but has turned bearish on the intermediate term while remaining firmly long term bullish. Andrew Cardwell has been neutral to bearish since March but has once again turned firmly bearish. The panel agreed that a short term bounce is likely and that the intraday reversal on Friday was the beginning of a bounce. All regard this bounce as a shorting opportunity.

So how exactly did you go long on the 5th when you were bearish on the 7th ?


Steven Vincent
05 Mar 10, 00:35
Bullish?

Please actually watch and listen to the referenced video. In it all 3 of us conclude that a bounce was imminent and we turned bullish for a trade. As the trade developed I concluded that the scenario had changed and that there would be continued upside and so we have stayed long. When I think that conditions have changed we will move back to the short side. Please watch the video.


Post Comment

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

6 Critical Money Making Rules