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
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Violent Whipsaw Yet Again...

Stock-Markets / Stock Markets 2011 Dec 08, 2011 - 04:34 AM GMT

By: Jack_Steiman

Stock-Markets

Is this crazy or what! This morning, very early on, the Dow futures were up 96 points. Those futures held well overall, until a spokesman from Germany put out a statement that it seemed there would NOT be a resolution for the Eurozone over the weekend. The result was a 1760-point reversal down in the futures. Oh well! No shock as we all know by now we're tied in completely to the news of the moment out of Europe. Our own backyard has become secondary to Europe. The United States is holding its own, and thus, the reason why this market is holding up in the face of such dire news out of Europe. If Europe was positively resolved, things would blast higher above 1265 on the S&P 500, or that nasty trend line of resistance we failed at again late today in the last two minutes. The market gapped down at the open. They spent the day trading a little below the gap open, and down around 25 points on the Dow.


The Nasdaq gapped down much deeper, and was down over one percent, or thirty points, at its worst. Slowly, but gradually, the market started to come back. Late in the session things turned up sharply in the Dow, and went green on the Nasdaq. A very late sell program at S&P 500 1267 in the last two minutes knocked things down hard. But in the end, not a bad day for the bulls with the S&P 500 five points below the breakout level. This sets things up for a breakout, but you never know. The late day action was bullish for sure, but somewhat rumor-news driven. That's getting old, but the bottom line is the bulls hung in when the bears easily defended yesterday, and it looked like things would fall hard. They didn't, and so, we can hope that somehow the right news hits over night and allows the gap up over 1265 tomorrow, or, whenever. For now, all today did was keep us in the range with the bulls close, but no cigar, at the S&P 500 1265 breakout trend line for now.

It's so interesting from a technical perspective to watch these lines of resistance and support, and how they get handled. We're now near the top, and once again, today we hit 1267 on the S&P 500 very late. The bears threw the sink at it, and knocked the S&P 500 down seven points in literally a minute's time. You can smell the desperation from the bears, and how badly they don't want to see this 1265 level get taken out for, if it does, they know they have no choice but to cover as the bulls will rush in to buy the breakout. There are a lot of shorts in this market, thus, a move to the old highs would be on deck at 1292 if we do forcefully clear 1265, so you can expect the bears to keep trying to keep this market at bay.

Technical analysis can really pay off if you know the exact levels. You can't argue the fight going on at this trend line at 1265. It's fun to watch with boring results if you're a bull, unfortunately, but at least the bulls continue to try to get the job done. Only time will tell, and sadly, the bulls likely need the right European news as a catalyst, but we'll watch closely to see if the bulls can get this rocking higher.
It's all about 1225 on the downside, and 1265 on the upside.

When you take the time to study the daily index charts you really can't get very bearish by looking at the oscillators. The price action has been fine, and the oscillators are fine as well. Normally, these types of confirmations will lead to the breakout, but because we're so news-driven it's hard to trust what you see. If we didn't have the European overhang, I'd say the odds of breaking out would be near 100%. This makes one want to get extremely bullish about things. But we all know you can't play on hope, and thus, you need to keep things in perspective.

It is tempting to jump in all the way, and it could pay off in spades, but again, the risk is simply way too elevated for such actions. The next big directional move comes from a forceful move below the gap top at 1225, or above 1265, of course. If we lose 1225, we rush lower to the 1195 level, or the bottom of that powerful gap up. That was the 490-point Dow day. That loss of 1225 would have to be considered bearish simply because huge volume was involved on that buy day, and it would be unusual for that not to be defended. The daily charts suggest the breakout, but we still need to be patient and not overly enthusiastic because of the European situation.

The Goldman Sachs (GS) had a nice breakout move today. Good to see it clear critical resistance it has struggled with for quite a long time now. It's a leader in the financial sector, and although we have learned not to trust these stocks, and rightly so, you have to be interested when a stock like Goldman Sachs does have a breakout move over strong resistance on a moving average. We all know the story by now.

When leaders don't lead, you should not expect a bigger-picture positive outcome. When they haven't led, and suddenly do, it makes you take notice. A change of character is always worth studying and trying to understand. I know many will say these moves happen from time to time and there's never any follow-through. I can't argue with that at all, but this one is worth noting is all. It's an interesting positive. Bottom line is nothing is a guarantee in this mess, but at least the bulls have something they can hang their hope on short-term.

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.


© 2005-2022 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