Best of the Week
Most Popular
1.UK General Election BBC Exit Polls Forecast Accuracy - Nadeem_Walayat
2.UK General Election 2017 Seats Final Forecast, Labour, Conservative Lib-Dem, SNP - Nadeem_Walayat
3.UK General Election 2017 Forecast: Conservative 358, Labour 212 Seats - Nadeem_Walayat
4.Theresa May to Resign, Fatal Error Was to Believe Worthless Opinion Polls! - Nadeem_Walayat
5.UK House Prices Forecast General Election 2017 Conservative Seats Result - Nadeem_Walayat
6.The Stock Market Crash of 2017 That Never Was But Could it Still Come to Pass? - Sol_Palha
7.[TRADE ALERT] Write This Gold Stock Ticker Down Now - WallStreetNation
8.UK General Election Results Map 2017 vs 2015 vs Opinion Polls - Nadeem_Walayat
9.Orphaned Poisoned Waters,Severe Chronic Water Shortage Imminent - Richard_Mills
10.How The Smart Money Is Playing The Lithium Boom - OilPrice_Com
Last 7 days
US Stock Market Correction Could be Underway - 24th Jun 17
Proof That This Economic Recovery Narrative is False - 24th Jun 17
Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - 24th Jun 17
Gold Summer Doldrums - 23rd Jun 17
Hedgers Net Short the Euro, US Market Rotates; 2 Horsemen Set to Ride? - 23rd Jun 17
Nether Edge By Election Result: Labour Win Sheffield City Council Seat by 132 Votes - 23rd Jun 17
Grenfell Fire: 600 of 4000 Tower Blocks Ticking Time Bomb Death Traps! - 22nd Jun 17
Car Sales About To Go Over The Cliff - 22nd Jun 17
LOG 0.786 support in CRUDE OIL and COCOA - 22nd Jun 17
More Stock Market Fluctuations Along New Record Highs - 22nd Jun 17
Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - 22nd Jun 17
Green Party Could Control Sheffield City Council Balance of Power Local Election 2018 - 22nd Jun 17
Ratio Combo Charts : Hidden Clues to the Gold Market Puzzle - 22nd Jun 17
Steem Hard Forks & Now People Are Making Even More Money On Blockchain Steemit - 22nd Jun 17
4 Steps for Comparing Binary Options Providers - 22nd Jun 17
Nether Edge & Sharrow By-Election, Will Labour Lose Safe Council Seat, Sheffield? - 21st Jun 17
Stock Market SPX Making New Lows - 21st Jun 17
Your Future Wealth Depends on what You Decide to Keep and Invest in Now - 21st Jun 17
Either Bitcoin Will Fail OR Bitcoin Is A Government Invention Meant To Enslave... - 21st Jun 17
Strength in Gold and Silver Mining Stocks and Its Implications - 21st Jun 17
Inflation is No Longer in Stealth Mode - 21st Jun 17
CRUDE OIL UPDATE- “0.30 risk is cheap for changing implication!” - 20th Jun 17
Crude Oil Verifies Price Breakdown – Or Is It Something More? - 20th Jun 17
Trump Backs ISIS As He Pushes US Onto Brink of World War III With Russia - 20th Jun 17
Most Popular Auto Trading Tools for trading with Stock Markets - 20th Jun 17
GDXJ Gold Stocks Massacre: The Aftermath - 20th Jun 17
Why Walkers Crisps Pay Packet Promotion is RUBBISH! - 20th Jun 17
7 Signs You Should Add Gold To Your Portfolio Now - 19th Jun 17
US Bonds and Related Market Indicators - 19th Jun 17
Wireless Wars: The Billion Dollar Tech Boom No One Is Talking About - 19th Jun 17
Amey Playing Cat and Mouse Game with Sheffield Residents and Tree Campaigners - 19th Jun 17
Positive Stock Market Expectations, But Will Uptrend Continue? - 19th Jun 17
Gold Proprietary Cycle Indicator Remains Down - 19th Jun 17
Stock Market Higher Highs Still Likely - 18th Jun 17
The US Government Clamps Down on Ability of Americans To Purchase Bitcoin - 18th Jun 17
NDX/NAZ Continue downward pressure on the US Stock Market - 18th Jun 17
Return of the Gold Bear? - 18th Jun 17
Are Sheffield's High Rise Tower Blocks Safe? Grenfell Cladding Fire Disaster! - 18th Jun 17
Globalist Takeover Of The Internet Moves Into Overdrive - 17th Jun 17
Crazy Charging Stocks Bull Market Random Thoughts - 17th Jun 17
Reflation, Deflation and Gold - 17th Jun 17
Here’s The Case For An Upside Risk In The Global Economy - 17th Jun 17
Gold Bullish on Fed Interest Rate Hike - 16th Jun 17
Drones Upending Business Models and Reshaping Industry Landscapes - 16th Jun 17
Grenfell Tower Cladding Fire Disaster, 4,000 Ticking Time Bombs, Sheffield Council Flats Panic! - 16th Jun 17
Heating Oil Bottom Is In.(probably) - 16th Jun 17
Here’s the Investing Reason Active Funds Can’t Beat Passive Funds—and It Worries Me a Lot - 16th Jun 17
Is There Gold “Hype” and is Gold an Emotional Trade? - 16th Jun 17

Market Oracle FREE Newsletter

The MRI 3D Report

Stock Market S&P 1375 Support Breaks

Stock-Markets / Stock Markets 2012 Nov 14, 2012 - 02:56 PM GMT

By: Jack_Steiman

Stock-Markets

Best Financial Markets Analysis ArticleThe bears had their chance yesterday morning with the S&P 500 gapping below 1375. It opened at 1371, only to see the bears give it up to an intraday rally that carried the index back to the low 1380's. The bears had to feel bad mostly because losing key support, such as S&P 500 1375, usually happens on a strong gap down and run. They accomplished the gap down but did not succeed on the run. The bulls found a way to hold the line. Then came last night and Cisco Systems, Inc. (CSCO) fooled the masses with a very nice report and some better than expected guidance. More on that later. The futures exploded higher. The bulls felt they had held the line in the sand and now it would be reversal up time. The futures were strong all night, but they began to weaken some as the morning wore on, although we still had a decent gap up open today. It didn't take long before the upside started to erode. The S&P 500 testing back towards 1375 again.



It churned there for a while, but you could feel the weight of the market as it just couldn't gain any further upside traction. Eventually it snapped, and down we went, closing convincingly below 1375 on the S&P 500. Now all of the key index daily charts are below their 200-day exponential moving averages with the Nasdaq and Dow well below. The S&P 500 tried to desperately hold the line, but it just didn't happen. This action puts the bears fully in control, even though we are now officially oversold on the daily charts, which doesn't happen very often but is a definite sign of market weakness. When it's oversold it can bounce up at any time but, for now, the bears are fully in control, make no mistake about that. It would take something special to change the new normal that has just hit the market.

Speaking of something special, that would probably relate to the fiscal cliff and getting some type of resolution or talk of closing in on one to get the market to reverse course. That was what the market was hoping to get today when the President spoke intraday on what may be happening with regard to compromise by both sides. The market wanted a "feel good" story to reverse the selling. Up until the President spoke the S&P 500 was just barely below that key S&P 500 1375 level. It was when he finished up that the market gave into deeper selling, with the reason being that he gave no indication of any progress being made towards a peaceful and appropriate resolution.

He said the fiscal cliff could come and go with nothing resolved but that he hoped smarter minds would prevail and get something done. He didn't sound overly optimistic, and when that became a fact, the market gave it up in terms of trying to hold above 1375. The bulls gave in as they were rightly disappointed. Outside of that type of potential feel good story, there isn't much out there that can come in and rescue the bulls here. The market broke today and did so convincingly. We'll have to learn more as the days progress, but you can't fight what you saw technically today folks. The bears took S&P 500 1375 away from the bulls. That's the bottom line.

CSCO is definitely worth spending a moment on here. Mr. Chambers, the CEO of CSCO, spoke last night after hours with CNBC host, Maria Bartoromo. He said things were going along alright and that he was hiring, but the hiring was coming outside of the United States. He said it was easier working with other countries, such as Canada, as they don't have the same poor tax laws and that they also made it easier regarding health care issues. A sad reality for what is ailing us all. The best companies in the United States are hiring outside of it. How can that bode well for our economy? How can that help with future growth in our business world? It's not only those in business. It's also those who won't do so because of these headaches. Many won't bother risking new ventures due to the rising cost created by health care and taxes. So yes, the stock did well on their report and was rewarded but, in the end, it was a failing grade for what he said about hiring practices for our own country.

The Dow closed below the three and a half year up-trend line on the weekly chart and didn't fight very hard in giving it up. The market is sending a message here to our Government leaders, and you have to wonder if they even care. The leaders of this country need to get together and prevent us from going over the fiscal cliff. If they do not do so the market will go much lower still. 1375 is now massive resistance on any move back up. That is what we should follow as the Dow and Nasdaq are so far away from that level now. If those three and a half year up-trend lines give way, we can fall extremely hard and fast. Stay cash. We're oversold, but we may simply stay that way for quite some time to come.

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 15-Day Trial to SwingTradeOnline.com!

© 2012 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.


© 2005-2017 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

Catching a Falling Financial Knife