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

Stock Market Rally Continues...

Stock-Markets / Stock Markets 2010 Jul 27, 2010 - 03:11 AM GMT

By: Jack_Steiman

Stock-Markets

It also is putting distance away from 1099 down to 1092, which is very good news for the bulls. They certainly needed some breathing space and they got it for sure as the market churned near this 1100 area today, but eventually, and made sure the bears knew that it would have nothing to do with visiting sub-1100 again. The bears started to cover as the morning went on, and thus it was a day for the bulls. It's been a long time since the market got overbought on the short-term charts, but now we have those overbought conditions, which is a sign of health.


Remember that it's a bullish event to get overbought. Overbought is NOT a sell signal. Negative divergences with overbought is, but we have none of that here. The daily chart oscillators are in very solid shape. It would take a long time of back and forth action before we'd see a negative divergence form on those daily charts. With no bad divergences in place, the market was able to make the important move today further away from 1099 down to 1092, and the fact that we closed on the highs is particularly good news for the bulls and bad news for the bears. Today was exactly what the bulls had been hoping for, and thus, it's a knockout day for them over the bears.

The daily RSI's are now over 50 on the daily charts, and this is a necessary change of character for bullish runs. If you study all bearish markets, RSI 50 is about as high as any daily index chart, or even stock chart, will get. There's rejection from the 50 RSI area, but not this time. We rocked above and stayed above, and this is really good action for the bulls. The fact that we're over 50 on the RSI's, and add in the fact that the MACD's are showing a strong impulsion higher, is really good action from a bullish perspective. If you had the RSI's making the move, but the MACD's were not confirming, it wouldn't be very positive for the bigger picture. Fortunately for the bulls, we are getting that magical combination, and thus, things look good for the near-term. Always pullbacks, as we know by now, from short-term overbought, but the trend is changing, and that's a positive for this market for sure.

The other positive that's taking place is the change in the volume trends. Not only are stocks overall moving higher with good volume, but individual breakouts are showing the necessary 205 or more above volume that is necessary to confirm such a move. If stocks break higher out of bases, or any bullish pattern, but do so without confirming volume, you must never trust the move. This is definitely not the case at the moment. Stocks are breaking higher on some really powerful volume, and thus, are confirming price. In addition, the market is showing a strong advance/decline line on the important up days, yet, are showing no more than slightly red internals on the down days. It's showing accumulation in stocks rather than distribution. The internals are overall painting a brighter picture for the bulls these days.

Sentiment is the biggest factor over the past many weeks that have held the market up. With bad economic reports coming in almost daily and with poor earnings coming in at the beginning of the earnings season, it is without question the excellent readings from the bull-bear ratio that has held this market up. When the better earnings started to come in, this gave the market the impetus to move higher out of the recent lower range that had been established. Sentiment, along with good earnings, makes for a market that will want to continue to trend higher short-term until things get more frothy, or until earnings start to erode away.

Staying long for now.

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