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
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

Fed Signals A Very Weak Economy--Earnings Poor..Market Yawns...

Stock-Markets / Stock Markets 2010 Jun 24, 2010 - 02:32 AM GMT

By: Jack_Steiman

Stock-Markets

The market waited anxiously to hear what Fed Bernanke would say today about the state of the economy. He told us all that the economy, in a word, stinks. He said a lot of negative things mixed in with a dash of this and that, but the thing that was most negative was his telling us that interest rates will stay near 0 for the foreseeable future. This is his way of telling us things are so bad out there that interest rates can't come off 0. Think about that folks. 0!!!


Foreseeable future!!! Wow! So now everyone knows the economy stinks. The market today, so what! We don't need no stinkin' economy. The market is split off from reality, now it seems, more than ever but that's why you can't play the market for it "seems" to be saying. Have to follow those technical's to tell you what's going on and how to approach the most difficult, manipulated game in the world. If you play by your emotions only, i.e., the truth, you are likely to get killed financially.

The truth doesn't work in this game. Never has and maybe never will. As long as you come to play each day based on this reality, you have a good chance to have some success. Based on this news and the other news of the day, housing, the market got a full dose of horrible news. The reward for the bulls was a small gap up. The rest of the day was spent trading back and forth with the Nasdaq lagging some. The market closed flat, once again ignoring terrible news as only the market can. The bulls got hit by two trucks today and just like a good cartoon character, was back to full strength in the blink of an eye. Not bad for the bulls indeed.

So now let's shift from terrible economic news and move to earnings. The market should love this. Earnings are confirming the bad economic news we keep hearing every day. So far, in the past two weeks, we have had earnings from Best Buy Co. Inc. (BBY), FedEx Corporation (FDX) and Carnival Corporation (CCL). In that bunch we have earnings today/tonight from Bed Bath & Beyond, Inc. (BBBY), Adobe Systems Inc. (ADBE) and Nike Inc. (NKE). All six of these company's are economic barometers of the health of things over the past three months. Let's look at the scoreboard.

First there was Best Buy and Fedex. Both said things were not very good although they tried to play spin doctor. Didn't work. Both stocks knocked down hard. 0-2. Then a few days we heard from CLL and they said business for vacationers really slowed, especially in the last month. Its reward was to get hit down the same way Fedex and Best Buy did. make it 0-3. Tonight/today we got earnings from Nike, and Bed Bath and Beyond and Adobe. Three more bad reports for sure. Make it 0-6. All down on their reports. Bed Bath and Beyond and Adobe crushed. The markets response? Flat after hours on the futures. Yawn!! Who needs stinkin' earnings!! If the earnings come in like this going forward, you wonder how the market can stand up much longer. However, never under estimate this market. Like I said, who needs earnings or a good economy to get us higher?!!

So now we see we're going to have a problem with earnings. It appears May saw the economy in the United States fall hard. We recently had the Philadelphia Fed tell us things worsened at a very rapid rate. No growth at all. In fact, things falling apart. Worst report in many years. We see housing report after housing report in the last six weeks come in showing a dead real estate market. We know the last jobs report showed no private sector growth. I need not add more. You get the picture. When the CEO's reported their earnings last quarter, it seems they thought the stimulus affect would somehow continue. It hasn't. They seem to have been caught off guard as evidenced by the reports from the big six listed above. Bottom line is things are worsening for our economy. Will the market ever care? I don't know but it is ominous out there for sure.

We know resistance now comes in at 1131. We have just lost all the exponential moving averages that matter most which are the 20's, 50's and 200's. Also lost price at 1105. So know 1105 is resistance, and then 1131. We know that 1040 is key support. 1044 is January. 1040 in May and 1042 in June. If we break 1040 with force it would constitute a quadruple bottom breakdown and that's not good for the bulls. We're a long way away from that becoming a reality but it needs to be monitored carefully. Like I said, bad earnings and a Fed telling us things are very bad out there hasn't meant much to bringing this market down. Upside will be tough as well. Bigger picture we're in a range of 1040 to 1131. 9% and that's difficult to say the least. Let's see if there's enough bad news in the market the past day plus to get us rocking higher or will the market follow some truth. Unclear for sure. Respect both pivots. Cash is best for the moment. Just the way it is.

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.

Sign up for a Free 21-Day Trial to SwingTradeOnline.com!

© 2010 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.


© 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