Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Finds A Way...Expect Some Chop Next Week...

Stock-Markets / Stock Markets 2011 Feb 26, 2011 - 04:35 AM GMT

By: Jack_Steiman


It found a way to get back through the 20-day exponential moving average. The Nasdaq tested down two times yesterday below the key 50-day exponential moving average, but closed above while showing a positive divergence on the 60-minute short-term charts at that double bottom. The close above with the positive divergence told us a move up off oversold was on the way, but I didn't expect the 20-day exponential moving averages to be captured back in one day. This is why you never short a bull market. You should rarely play counter trend. If you want cash that's fine, but counter trend playing makes little sense. 2769 was the level the Nasdaq needed to take back and it did just that. Nothing explosive above, but above, nonetheless. Impressive. The price of oil had led this market lower. It printed near 103.00 per barrel yesterday, and that was the reason for the brief loss of those 50's on the Nasdaq. The S&P 500 and Dow never fell below.

Oil put in a huge reversal stick lower yesterday and not coincidentally, the market started to recover. Today was the follow-through back up, although the market has tremendous resistance not far away due to a large open gap from the recent selling. Oil took us down and oil took us up, and because it's such an unclear situation overseas, you really can't count on things staying too stable with regards to the price of oil. If things get violent, oil starts to run up, and if things calm down, oil goes down with it. Unrest brings higher prices unfortunately. So it tells us nothing is truly safe as things work themselves out overseas, but it was good to see oil pull in yesterday in such a dramatic fashion. No one wants to see oil surging over $100 per barrel. The inflation risk would be terrible for the economy and for the stock market on some level. For today, the market found a way to creep back over the 20-day exponential moving averages and this takes some of the steam away from the bearish case short-term. Not totally by any means, but for the moment it's better news for the bulls.

If the bulls want some good news from today's action it is that the market may be setting up a large symmetrical triangle which normally plays out bullish, if the pattern preceding it was bullish, and it was. There is never a guarantee as any triangle can break lower. However, it is good news technically, if we can set up this triangle. It offers up the possibility that the lows on the Nasdaq at the 50-day exponential moving average the past two days may act as great support on any selling to come. The triangle represents the bulls ability to hold things up until they unwind deeply enough on the major oscillators.

There is no time frame for the length of these triangles, but the best way to play is to buy whenever you get closer to the bottom of it, and go mostly cash as you get to the top. You don't really want to fool around shorting much due to the primary trend being bullish overall. Make no mistake about that folks. It doesn't mean you can't short at all, but doing too much in that area will likely cause major frustration. Triangles are very emotional with strong swings both ways. Best to play in the direction of the overall trend and as you get closer to the bottom of the triangle.

I'm always looking for a change of character and whether that change is relevant or not with regards to the market in the short-term. Over the past two days we had some earnings reports that were rewarded, rightly so, or not, but we saw many of them print black candles by days end meaning on balance sellers for the day once the stocks gapped up at the open. Not the very best of behaviors. We saw that from Incorporated (PCLN), (CRM), and Deckers Outdoor Corp. (DECK) over the past two trading days. Is it really relevant? Not sure. It could be just a timing issue for those plays as the market has been slightly down trending the past week as we all know.

Some stocks did hold the majority of their earnings gains, but some leaders like the ones I just mentioned didn't print the very best of candle sticks to be sure. It's just a small red flag, because, ultimately, it's the market action overall that talks, and today we saw strong action in the overall market price action. You don't want to say the whole market is in trouble just because some leaders didn't print the best candles. Clearly we saw money come in to other areas and maybe these stocks just got a little ahead of themselves and needed a rest, thus, the black candle sticks by days end. It's just important to note things as they develop. You're always trying to learn I would hope.

The market gapped up today after the successful test of the 50-day exponential moving average on the Nasdaq. This is extremely important as it puts a critical level of support above that 50-day area. If the market had moved up today off a flat opening, the technical shape of the market would be much weaker than it is now. Gaps offer wonderful support, or resistance, depending on where they occur, of course, and this gap off the 50-day test is huge for the bulls as it brings about an added level of safety to their minds when determining whether to buy or not. If they think they have good support close by in both the gap up and the 50-day exponential moving average, they will be more willing buyers. Gap and 50-day so close together really adds confidence to their game.

Good to see the bulls find a way to get things rolling off the 50-day test. Often what can happen in an overall bigger picture bull market. With 2808 now tough resistance for the bulls, at least now they can say 2715 and 2751 are good levels of support. Take a look at our 6th chart below of the Nasdaq to see whether you can locate these levels. Expect a pullback of some type short-term if we test up towards our 2808 Gap on the first test then we could test back down to one of our lower Gap areas. Thus, expecting some choppy action in the week ahead. Slow and easy as always here folks.

Have a great weekend and do something nice for someone because you can.



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!

© 2011

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 constitutinginvestment advice. Trades mentioned on the site are hypothetical, not actual, positions.

© 2005-2019 - 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

6 Critical Money Making Rules