Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18
US Stocks Set For Further Advances As Q2 Earnings Start - 15th Jul 18
Stock Market vs. Gold, Long-term Treasury Yields, 10yr-2yr Yield Curve 3 Amigo's Update - 15th Jul 18
China vs the US - The Road to War - 14th Jul 18
Uncle Sam’s Debt-Money System Is Immoral, Tantamount to Theft - 14th Jul 18
Staying in a Caravan - UK Summer Holidays 2018 - Cayton Bay Hoseasons Holiday Park - 14th Jul 18
Gold Stocks Summer Lows - 14th Jul 18
Trump US Trade War With China, Europe Consequences, Implications and Forecasts - 13th Jul 18
Gold Standard Requirements & Currency Crisis - 13th Jul 18
Focus on the Greenback, Will USD Fall Below Euro 1.6? - 13th Jul 18
Stock Market Outlook 2018 - Bullish or Bearish - 13th Jul 18
Rising Inflation is Not Bearish for Stocks - 13th Jul 18
Bitcoin Picture Less Than Pretty - 13th Jul 18
How International Observers Undervalue the Chinese Bond Market - 13th Jul 18
Stocks Trying to Break Higher Again, Will They? - 12th Jul 18
The Rise and Fall of Global Trade – Redux - 12th Jul 18
Corporate Earnings Q2 2018 Will Probably be Strong. What This Means for Stocks - 12th Jul 18
Is the Relative Strength in Gold Miners to Gold Price Significant? - 12th Jul 18
Live Cattle Commodity Trading Analysis - 12th Jul 18
Gold’s & Silver’s Reversals’ Reversal - 12th Jul 18
The Value of Bitcoin - 11th Jul 18
America a Nation Built on Lies - 11th Jul 18
China, Asia and Emerging Markets Could Result In Chaos - 11th Jul 18
Bullish Gold Markets in the Big Picture? - 11th Jul 18
A Public Bank for Los Angeles? City Council Puts It to the Voters - 11th Jul 18
Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - 11th Jul 18
Argentina Should Scrap the Peso and Dollarize - 11th Jul 18
Can the Stock Market Close Higher For a Record 10th Year in a Row? - 11th Jul 18
Why Life Insurance Is A Must In Financial Planning - 9th Jul 18
Crude Oil Possibly Setting Up For A Big Downside Move - 9th Jul 18
BREAKING: New Tech Just Unlocked A Trillion Barrels Of Oil - 9th Jul 18
How Trade Wars Penalize Asian Currencies - 9th Jul 18
Another Stock Market Drop Next Week? - 9th Jul 18
Are the Stock Market Bulls Starting to Run? - 9th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

Employment And Oil.... Stocks Whipsaw Week...Bull Trend Still In Place.....

Commodities / Crude Oil Mar 05, 2011 - 10:37 AM GMT

By: Jack_Steiman

Commodities

Such an interesting week. If you remember last Friday's report, I talked about whipsaw coming up in a symmetrical triangle. I don't think anyone would argue that that's exactly what we saw this week. The triangle is alive and kicking. They are so emotional, especially when over played on either side. Longs struggle. Shorts struggle. Lots of back and forth that plays on your mind. Usually causes bad outcomes. You get aggressive in a symmetrical triangle you pay the price, even though you probably didn't put on a bad trade. It just feels that way at certain times within it. Again, nothing aggressive. If you play only a few plays you can more easily deal with what's taking place.


The whipsaw week is caused mostly by the gap down off the top a little over a week ago. The Doji top, which was last Thursday, I believe, maybe Friday, set the ceiling, but the market has not fallen hard off this gap down. It has tested down to the gap just above the 50-day exponential moving average on the Nasdaq, but held with relative ease. It has tested back up twice to the open gap at 2808 on the Nasdaq, but both times it failed. Quite normal within this emotional pattern. The bears are failing at the bottom, which is the way it normally is while the bulls are doing their share by failing at the bottom of the open gap down. Nice to see everyone doing the right thing.

So the week is over and we are still slightly closer to the top of the range at 2808 than there bottom 2727. The middle. Makes perfect sense since it leaves us guessing about what's on deck. The week lived up to its billing, and I am afraid we are about to embark on a repeat performance for next week.

One real good thing about symmetrical triangles is that by the time they have matured some, the daily oscillators have taken quite the move lower from overbought conditions that bought on the existence of the triangle in the first place. If you study the daily index charts across the board it is easy to see that a lot of good has taken place as we have gone from overbought to nearly, but not quite, oversold. But bull markets don't always need oversold.

We have had massive reduction in price, but we have had a lot of strong oscillator unwinding as well, which is bullish bigger picture. If we had price racing down then that would be a different story. Not the case at this moment in time. That can always change but what has taken place thus far can only be looked at as a net positive for equities. Stochastic's have raced down from the high 90's while rsi's have raced down from the 70 level. You can't say price has raced down with that so it's good action for the bulls when you look only at the technical picture.

The title tonight talks about oil and employment. Let's take a look at both of these important factors in terms of how the market thinks of them at this exact moment in time. We were all on pins and needles waiting on that employment report this morning. I know I was as the market was expecting some very decent news. The market received the news it was waiting for when the employment rate for those who are still looking was 8.9%. It doesn't count those who have given up, unfortunately.

The 192,000 jobs created were generally on target. That news took the headache of this potential worry and put it aside. The market was vulnerable to bad news on that front, so the bulls had to be excited about this situation being taken care of in a positive fashion.

The next worry being oil. This is getting completely out of control and is still a major issue for this market. We closed at 104+ on oil today. You really have to wonder when a certain price will take this market out and bring it to its knees. You'd think we have to be close, although the market is not reacting that way to be sure. At least not at this moment. However, there has to be a number where the market says enough is enough, and the economy just can't handle this any longer.

This is a MUST watch situation on a daily basis. There is real risk to the stock market with oil this high folks, so you don't want to get overly aggressive on the long side even though we're still clearly in a bull market. Some exposure, but not overly aggressive with oil over $104.00.

Some stocks had bad weeks and took on more of a down trend short-term, which is a change of character. But when you think about it, the market is holding up well so it's not wide spread. That's good, even if some stocks are suffering more than they have in quite some time. Every stock has bad times, even when they're bullish bigger picture. Usually happens to the stocks that have had the worst earnings reports in the latest quarter. The ones with the best reports remain quite strong in their patterns, even as the market sells off.

Stocks such as Google Inc. (GOOG) and F5 Networks, Inc. (FFIV) remain in difficult patterns along with many others from just about every sector. But again, the total picture is not bad at all. Just understand the pattern we're in and keep in mind how nasty the swings can be, while at the same time, keep an eye on the price of oil. Some exposure is fine. Nothing out of hand. Play appropriately and you'll be fine.

Do something nice for someone because you can every day of your life. Enjoy the energy of children if you get the chance.

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!

© 2011 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.


© 2005-2018 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

6 Critical Money Making Rules