Best of the Week
Most Popular
1.China Crash, Greece Collapse, Harbingers of Stock Market Apocalypse Forecast 2015? - Nadeem_Walayat
2.Gold Price Awaiting Outcome of Greece Crisis - Clive_Maund
3.Gold Price Peculiar 6 Month Cycles - Rambus_Chartology
4.Gold Price Just a Little Bit More - Bob_Loukas
5.8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble - EWI
6.Gold And Silver – Without Either, You Will Be Greeced - Michael_Noonan
7.Lies, Damned Lies and Statistics - James_Quinn
8.China Crash, Greece Crisis Harbingers of Stocks Bear Market? Video - Nadeem_Walayat
9.Gold and Silver Record Shorting - Zeal_LLC
10.Markets Big Deflationary Downwave Quick Reference Guide... - Clive_Maund
Last 5 days
Ibuprofen Warning - The Pain Killer that can Kill You! - 29th July 15
More Ritholtz on Gold, and Another Response - 29th July 15
Crude Oil Price Is Lower – and You’re Richer - 29th July 15
U.S. Home Sales Market Is Dead – This Chart Proves It - 29th July 15
Greece- What Happens When Economists Talk Politics - 29th July 15
The Gold - U.S. House Prices Ratio As A Valuation Indicator - 29th July 15
Will Crude Oil Price Decline Continue? -Video - 28th July 15
Gold & Silver Money Has Devolved Into Debt and Plastic - 28th July 15
Buy and "Own Gold Krugerrands" Says Money Expert Jim Grant, Very Bullish on Gold - 28th July 15
How to Protect Yourself from China's Crashing Stock Market - 28th July 15
Quantum Geopolitics - 28th July 15
Gold Mining Stocks to Weather the Storm - 28th July 15
Stock Market Bulls Beware! - 28th July 15
Will Chinese Stock Market Crash Affect the US? - 27th July 15
Crude Oil Price Under $48! - 27th July 15
Are We Seeing a Trend Reversal with U.S. Interest Rates? - 27th July 15
How to Know When the Gold Bear Market is Over - 27th July 15
Gold Bear Market Phase III - 27th July 15
Silver Bull Hammer Buy Signal - 27th July 15
Gold Cracks Support and Plunges to New Lows - How Low Will Price Go? - 27th July 15
Commodity Markets Breakdown Of 2015 Is Now A Fact - 26th July 15
Gold Price at a Five-Year Low: Here’s What to Do - 26th July 15
Stock Market Primary III Inflection Point - 26th July 15
Central Banks and Our Dysfunctional Gold Markets - 25th July 15
Gold And Silver - The US Dollar Does Not Exist, Part II - 25th July 15
How Wall Street Put Apple Stock in Animal House - 25th July 15
How to Trade Markets Using the Stochastic Oscillator - Video - 24th July 15
A Bond Market Crisis Is Coming... Here's What to Do - 24th July 15
Why There's Resistance to the Iran Nuclear Deal - 24th July 15
Absurd Gold Stock Levels - 24th July 15
Gold Mining Stocks Nearing Rebound - 24th July 15
Misperceptions Create Significant Bond Market Value - 24th July 15
Commodities Distressed Investing - 24th July 15
OPEC Shorts Are Driving Down the Crude Oil Price - 24th July 15
USD Index Rebounds - 24th July 15
If You’re Worried About a Tech Bubble, You’re Focusing on the Wrong Thing - 24th July 15
Gold Stocks Bear Market Bottom Buying Opportunity? - Video
The Stealth War on the United States - 23rd July 15
Commodity Prices, Gold and Silver Stocks Next Leg Down - 23rd July 15
The ‘Real’ Reason the Fed Wants to Raise Interest Rates - 23rd July 15
Crude Oil Price Slump is a Once in a Decade Opportunity to Make Money, Guaranteed - 23rd July 15
Gold Price Hits a 5-Year Low: How to Time the Next MAJOR Bottom - 22nd July 15
Silver and the Deflation Thesis - 22nd July 15
Gold Price Crash - Trend Forecast 2015, Gold Stocks Buying Opportunity? - 22nd July 15
The Three Reasons Behind Iran’s Resistance to the Nuclear Deal - 22nd July 15
Winning the Hunger Games - How to Choose Successful Agriculture Investments - 22nd July 15
Are Free Markets The Solution? - 22nd July 15
Gold Hammered “Unprecedented Attack” - 21st July 15
The Turkish Enigma - 21st July 15
Gold and Silver: The Final Capitulation Commences - 21st July 15
Greater Israel Setback from Iranian Nuclear Agreement - 21st July 15
U.S. Housing Market: Is the Roof About to Cave In (Again)? - 21st July 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stock Market Bubble in Trouble

Stock Market Hopeful of Fiscal Cliff Agreement.....

Stock-Markets / Stock Markets 2012 Jan 01, 2013 - 10:01 AM GMT

By: Jack_Steiman

Stock-Markets

The stock market has been hoping for an agreement between both sides for quite some time. It began to look quite dismal for the prospects of getting something done. Neither side really seemed interested in doing what was right for the public but isn't that always the case. They probably still don't truly care, but there is an image and reputations at stake here, so it appears a program of some real substance will get done, one that actually includes both sides giving in some. Seems almost impossible to believe, but there is real hope that things will get done and done in a way where the public actually thinks it's not half bad. Never say there aren't any miracles. You are possibly witnessing one at this moment in time. If we get exactly what we need we should see higher prices in the stock market overall. Not straight up. Lots of head fakes up and down but overall higher. Let's see what we get over the next 24 hours and how the market responds to it.


The market opened on Monday a bit lower, but quickly gathered a head of steam as news came out that things were progressing along. Once Obama spoke at 1:30 PM ET, the market blasted off once again. He wasn't exactly super optimistic while saying that things were moving along but that no deal had yet been struck by the two sides. At first the market started pulling back, but shortly thereafter, it started gaining steam and by the time the day ended, there was nothing, but green across the board, closing right at the highs. Very solid action as the market is sensing a good agreement both sides can feel good about. Solid action that shows the market isn't dead and gone just because we have struggled for the past week or so. The bulls can feel good about today's action. Nothing to get excited about, but clearly good action for the bulls.

Let's take a moment to go over things regarding the overall health of the market. You need to ask yourself a few questions. Also, you need to look at the backdrop regarding interest rates. First of all, at this time we see no distribution volume off tops. That's key. Big money is not selling off high readings. Good news is still treated as good news, and sentiment is not even close to being a problem. In addition, there may be something more importantly to realize.

Mr. Bernanke is intentionally keeping interest rates near zero so as to keep people from running out of the market. With rates this low folks have nowhere else to go with their dollars. This alone is helping to protect the stock market from falling apart. Even if rates started to go up from here it would be a very slow and gradual process. Rates would still be too low for folks to start running out of equities and into the safety of those rates. Until rates start going up much more than where they are now, folks will likely stay with stocks over anything else. The market may not always be friendly with the news that's out there, but Fed Bernanke is working on forcing folks to hang in there. He's doing a good job from that perspective.

The market will likely continue the whipsaw that's been occurring and making life difficult for traders, but I think we can still have some small exposure, just nothing too heavy. Buying oversold is best but not the only way. I would not be shorting until we get a sell signal in the overall bigger-picture market. That doesn't exist in this moment. It can happen quickly and suddenly, but right now the market remains on a buy signal which really exists until we see sub 1350 on the S&P 500 or the long-term up-trend line.

Peace and Happy New Year!

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.


© 2005-2015 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

Biggest Debt Bomb in History