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
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
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 20's Hold.....MSFT/AMZN Crushed After Hours.....

Stock-Markets / Stock Markets 2010 Apr 23, 2010 - 05:31 AM GMT

By: Jack_Steiman


Last night I talked about the area of critical support on the S&P 500 being the 20-day exponential moving average or 1187. 1185 also being strong horizontal support. We got down to 1190 today on the lows after some very bad earnings reports last night. We basically got to those 20-day exponential moving averages and blasted up once again. This is the sign of a very healthy market overall. Yes, we could use some deeper selling but, yes, this is a very powerful bull market that continues to be under rated in my eyes. This is why we've only had long exposure since being lucky enough to call the bottom. No shorts. We gapped down on those numbers from last night and continued to run lower.

It looked like the bears had their day. Looked like I said. Didn't turn out that way. President Obama spoke, and from that point on the market climbed higher step-by-step until it went green late in the day, led by beta or the Nasdaq, which is healthy. We closed near the highs on a solid reversal off the gap down. You can't argue with what is. You can fantasize about what you'd like, but in this game, fantasy is NOT a good thing. As I like to say, it is what it is, and who could argue with the candles printed today. The market will get another tough test tomorrow. More on that in a bit but today's action tells the bullish tale. Tough to keep trying to short what hasn't worked.

Tonight we have a repeat from last night. We have two important stocks, one in particular, that are getting crushed on their earnings report. (AMZN) and Microsoft Corporation (MSFT). Microsoft Corporation (MSFT), the more important of the two. It's down about 3.5% on deferred earnings. AMZN down on the classic "full" report. The stock has run up non-stop and has a massively high p/e that screams danger Will Robinson. AMZN is down $11 after hours.

If you played Russian roulette on this one long, I feel for you, but that's the game of greed. It teaches some nasty lessons, doesn't it! If you expect to get rich playing this game, quit. Close your account and leave before you're broke. So now we have some nasty futures once again and we have to see how they do or don't recover overnight. Another litmus test is upon the bulls to hold things up and keep it going. What's interesting is that the ones that are getting hit on earnings really do have some good reports going. It's just that the stocks are mature. They're full. They'll bounce back in time but for now, if you're not perfect, you're toast short-term.

You MUST be very nimble in this market. There are plays that set up over and over and we are playing them as they come around. However, you shouldn't stay in too long if you get a nice profit. This market remains vulnerable due to negative divergences, overbought and poor sentiment numbers. At any time we could breach those 20-day exponential moving averages to make things feel ugly. Yes, today was a bullish day and this may not happen any time soon, but you have to be on guard for some bad days ahead. A market that continues to show promise and great overall action but a market also full of red flags for the short-term that has to be respected, not ignored.

The way to play this market is to buy stocks that have pulled back to critical areas of support with gaps not far below. The critical support initially being either the 20-day or the 50-day exponential moving average and if possible, a gap not too far below those levels. You DO NOT want to chase strength. You do not want to buy stocks that are elevated. You do not want to buy stocks as a rule when stochastic's on either the daily or 60-minute charts are at 80 or higher. When RSI's are at 70 or higher. When MACD's are well over the 0-line. Use weakness as your tool to purchase trades. They don't always work, but we can't argue with the results over the past several months using this strategy. Go slow and easy here. Nothing overly aggressive but keep some scratch in the game.



Jack Steiman is author of ( ). Former columnist for, 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 21-Day Trial to!

© 2010

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.

© 2005-2022 - 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