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Stock Market Quiet In The Range....

Stock-Markets / Stock Markets 2010 Jun 19, 2010 - 07:27 AM GMT

By: Jack_Steiman


And that's about all there is folks. Have a nice weekend.

Ok... so I need to write a little bit more, but in truth, there is very little to speak of tonight. The market made two tries to get through the elusive 50-day exponential moving average at 1119 today. It failed. It made three attempts to get through 1105 and failed. It printed 1105 yesterday and hit 1107 two different times on Wednesday. The bulls held where they had to and the bears held where they had to. Neither side able to do anything, yet, in this new range just set up since early in the week when the bulls took S&P 500 1105 for themselves.

From that perspective the bulls can feel good about what they accomplished this week. They had made five attempts to get through 1105 and finally did so on that fifth try, thus you know they're not going to give it back so easily. We know the bears have to take back 1105, but when you have the 200-day and the 20-day exponential moving averages just below 1105, the job gets that much more difficult. 1199 is the 200-day and 1098 is the 20-day. Seven points of strong confluence of support makes the job for the bears quite difficult unless they get some really bad news from overseas over the weekend.

We closed at 1117 and with the 50-day exponential moving average at 1119, the door is open for the bulls to make the move but it doesn't mean we will as fast as we'd like. You know the bears are going to fight this. With the put call being high most days it tells me the shorts are still rocking and that's good news for the bulls in that it could be the fuel the bulls need. Shorts cover fast and with the high put call readings all week, it will only take a small amount of good news to get the market through 1119 with some force. Let's see if there's something over the weekend that can give the small spark needed to get this to gap over early on Monday morning.

One good piece of good news today was how well the advance/decline line held up throughout the day as we approached 1119 S&P 500. The fact that many more stocks were up than down tells me that the bears are having trouble taking out enough stocks to get this market to fall. The majority of stocks are rising as we get near this critical 50-day exponential moving average at 1119 S&P 500. If today was carried by only a few stocks that are heavily weighted it would have been more bothersome. To see more stocks selling so close to 1119 wouldn't exactly bring about a lot of optimism and hope. It wouldn't make the bulls feel confident but today gives the bulls some further hope that a gap over can occur soon as more stocks are participating with solid action.

Medium-term it seems that any deeper move higher will be met with very overbought conditions on the daily charts. If we clear 1119 we can head towards 1150 or the right shoulder made in January. At that point the overbought conditions would kick in. In addition, there are lots of initial sell programs waiting at 1150 if we get there because of that symmetrical pattern setting up. Automatic programmed sell signals at 1150 for sure. No guarantee we can get that high even if we get through 1119. Bulls will pull back as we move higher. Anyway, we take it a day at a time. It's what comes first, 1105 or 1119. I think we'll get through 1119 but nothing too aggressive right here.



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.

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© 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.

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