Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market S&P 1050 Holds For Now....

Stock-Markets / Stock Markets 2010 Aug 26, 2010 - 03:14 AM GMT

By: Jack_Steiman

Stock-Markets

Not great, but if the bulls want to exhale now is the time to do so. If this level is lost on a closing basis it's not good, especially if it's lost with some force behind it. We certainly did lose it intra-day, but the market started to get oversold, and thus the usual rally ensued. Not a great rally. Nothing earth shattering and nothing to hang your longer-term bullishness on, but at least the bulls can say they held the line in the sand on the S&P 500 for one more day.


The gap down today on the Durable Goods Report really looked bad. With the Nasdaq already losing key support at 2167/2170 yesterday, it didn't seem like losing 1050 on the S&P 500 was going to be all that difficult, but this is the first real test down, and it took many attempts by the bears to remove that 2167 area on the Nasdaq, so holding today is no real shock. The bears have at least taken things down close to 1050, and I don't think they're going to let it get too far away from them on any rally attempt that may be coming up short-term. For the day, the bulls made the necessary reversal, but again, nothing to feel all that good about and definitely nothing that say you should be getting long here very much.

Another piece of hope for the bulls short-term is the nature of the bond market which has been straight up on the iShares Barclays 20+ Year Treasury Bond (TLT) and straight down on the inverse UltraShort 20+ Year Treasury ProShares (TBT). The TBT put in a bottoming stick for the very short-term only today on strong volume while the TLT made a topping stick on huge volume as well. The overbought and oversold nature of these is in play as well as the RSI is over 70 on the daily chart on the iShares Barclays 20+ Year Treasury Bond (TLT), and under 30 on the daily chart on the TBT. This suggests, along with those candle sticks from today, which we should see a rally on the TBT and a move lower on the TLT for a day or so, and that should give the market a small bounce. Should because you never know for sure. Things can stay overbought and oversold but the set-up is such that one would expect reversals over the next day or so.

Strong resistance comes in on the Nasdaq at the 2160 level, or that major gap down point. We also had major horizontal support there four times before the gap broke it, thus the gap is powerful resistance. In addition, we have the trend line off the lows from March 2009 lows at 2170, so the confluence of resistance from 2160/2170 is extremely powerful and must be respected. It would take some fabulous economic news to get the market to take back that lost area of support now turned resistance. Support is clear on the S&P 500. 1050 is massive, and then so, too, is 1010. 2100 is strong support on the Nasdaq.

We are seeing interesting levels on the bull-bear spread, but nothing too dramatic. A 2.2% spread of bulls to bears. In the very worst bear markets we can see levels at 20%, or a bit more. Normally, once you start inverting, the bears have a much tougher time taking the market lower with force. It can happen, but normally the moves lower are more from a whipsaw perspective. This sentiment issue is something to keep a close eye on as it suggests the masses are out of the market, meaning there is a lot of cash sitting and waiting, but no one knows when that will be deployed back in. For now, we're not at extremes but getting awfully close, and thus again, it must be monitored for future reference on how to proceed.

One slow step at a time here folks. A very tough and dangerous market with loads of overhead resistance. Lots of gaps, etc. Nothing aggressive on the long side should you try to play a bounce. We are still in an overall down trending market.

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