Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Spain and CMG... Stock Market Smacked Down...

Stock-Markets / Stock Markets 2012 Jul 21, 2012 - 12:43 PM GMT

By: Jack_Steiman


Sometimes there's an event that takes place to hit the markets in a negative fashion. Sometimes there are multiple things that occur that can bring a market lower. We saw it today in the form of earnings, the markets number one focus these days, and from news in Spain regarding more bailout talks and defaults. None of it is very good news, and thus, the market had a very bad day today. No fun.

Last night we saw Chipotle Mexican Grill, Inc. (CMG), a large and heavily weighted restaurant stock, say things weren't perfect. When you have a 55 P/E, and you say things aren't perfect, you can get hit. The problem is that not only do you get hit, but so does just about every stock in that sector, and many times, especially if the report was very bad, which it was. The entire restaurant sector bled out today. From Panera Bread Co. (PNRA) to Whole Foods Market, Inc. (WFM) to Monster Beverage Corporation (MNST), and everything in between. If you had anything related to food or beverage you were taken out and shot. Not fair ,but just the way it is for now.

The market in a foul mood these days when there's bad news on the earnings front. Throw in bad news from Spain, and you get what you get, a bad day for the bulls. No technical damage, but a bad day for the bulls, especially if you're in the worst of the wrong places. The charts will show you the lack of damage, but it doesn't make today any easier to deal with. Spain is now talking about needing more cash a lot sooner than thought. The nonsense there appears to be never ending. Their stock market crushed. This was the other culprit to today's bad day. Italy is also giving our markets trouble. Their market's down roughly 7%. That would be roughly 900 Dow points in a single day. So you can understand our rough day here.

In fact, it's amazing today wasn't worse. So a bad day, with no technical damage, but it did take the bears off the hook as the market was getting closer to breaking out. But in this market, you have to accept the bad times when all looks good as we are not in a bull market, nor are we in a bear market. When it looks bad we rally, and when it looks good we fall. Agnostic to nowhere in the big wedge. It was another meaningless day in the market, no matter what it may have felt like. Bigger picture nothing happened. Yet!

Lots of areas suddenly don't look as good as they did a few days ago. The banks, rocking late last week into early this week, have taken a huge hit these past few days. It's on the precipice of breaking below trend line support with no real support for a long way lower. The restaurants are now badly damaged. Nothing good is coming out of those stocks for some time to come. If the banks go, and then other areas start to go, and all that moves are some technology stocks, that's bearish bigger picture. We get earnings from Apple Inc. (AAPL) and Inc. (AMZN) next week, and if they're bad, look out below. If you lose the final leaders, the market is done. Amazon has a nearly 200 P/E. They better be perfect on their report or they'll be the next Chipotle Mexican Grill, Inc. (CMG)/NVR Inc. (NVR).

The risk there is massive. Can it go up 30? Yes, but can it fall 75? Yes! The same with Apple, although nowhere near as bad on their P/E. Earnings ultimately lead, and we need to see the best of the best come through. If not, it's trouble ahead. All eyes will be focused on the remaining big leaders to come next week and a bit beyond. The market can't afford technology to become like the restaurant sector.

Tonight you will see the charts. What they are telling you for now is that nothing is broken. Not yet. The long-term S&P 500 weekly chart wedge still in decent shape with no immediate threat to breaking down. The wedge is three years and four months old, and it's nowhere. Not fun hearing that, I'm sure, but when you see it you'll understand. So even with today's bad news, and poor action, the charts remain neutral for the moment. At some point in time, the wedges will get taken out, but that can be weeks, months or even years. The Fed is holding things up, while the fundamentals take things down. Nasdaq 100 3000 big resistance, while Nasdaq 100 2865 is huge support for the medium-term.

Keep it light.



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 15-Day Trial to!

© 2012

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.

© 2005-2019 - 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