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
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
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Holding...Whipping Between Support And Resistance...

Stock-Markets / Stock Markets 2013 Feb 16, 2013 - 12:06 PM GMT

By: Jack_Steiman


The market has had a way of holding up into multiple overbought episodes across all of the major index charts on their dailies. At some point, it will fall very hard, but for now, there is nothing indicating that this will happen now. We are not getting the type of market opening candle-stick prints that would suggest something nasty is upon us, although the market doesn't always have to be that friendly and give us a warning sign we can count on. A large gap up that closes with a black candle or worse yet, a red one, would indicate the market has topped out for the short-term, and that you should be in mostly, if not all, cash. You can even take a short or two on the indexes.

For the moment, however, the market is stuck between resistance on the S&P 500 at 1525, the previous high and support at 1503, or the 20-day exponential moving average. Any trading between those two points on a closing basis is simply noise and nothing else. Any down move may feel bad, but if 1503 holds on a closing basis, it's meaningless. Same holds true on the long side. If we break above 1525 intra-day, but can't close decently above by the close, it's nothing but meaningless noise. Whipsaw in between these two levels would be a good thing, if it can do the dirty deed of unwinding those daily, and even sixty-minute, charts to allow for some more energy to lift us higher still. So today was one of those meaningless trading days with neither side taking out either one of those key levels. The uptrend is still clearly in place, while the market does its churning just below 1525 on the S&P 500.

Even though in the end today was a meaningless trading day, there was one element during the day that was different. When was the last time any of us heard Wal-Mart Stores Inc. (WMT) warn about sales. Their CEO today said that their sales for February were the worst in seven years. The market took about a one-hundred point dive on the news in minutes on the Dow. S&P 500 fell hard, but it's still above 1503 quite decently. So nothing from nothing is nothing. But you wonder when the market will snap given the constant overbought conditions it has been seeing. This news certainly could be the catalyst. WMT fell hard but nothing too severe. It could have been much worse for sure. However, it's an economically sensitive stock and shouldn't be completely ignored when it tells you the consumer is really reigning it in quite suddenly. Yes, the economy is still weak with folks still very concerned about their futures. We need to see if this becomes contagious. WMT may become the bears best friend.

There are always places to avoid, even in the best of overall bull markets. Sometimes something happens to an individual stock such as Apple Inc. (AAPL) that carries it in to a nasty bear market due to the inability to keep growing at a certain pace. There are also times when a sector or two that are related also go into bear markets, due to the trade being a bubble over time. This has happened to silver and especially gold. SPDR Gold Shares (GLD) has taken a nasty journey on its way to stair-stepping lower ever since it began its distribution volume decline off its 185.00 tops seventeen months ago. It has been putting in a series of equal or lower highs as it breaks down. The fear trade is slowly, but very surely, going away and that's why the decline in the commodity. Mr. Bernanke is making it more difficult for the gold bulls when he makes statements relating to inflation being under control, and other statements regarding better health for our economy. With GLD in a bear market, it's probably best you lose some of your excitement for those play. It's best to focus your energy now in other areas of the market that are working better.

Some of the daily charts seem to be better technically than others. The Q's look better in terms of MACD, etc. than the S&P 500 or Dow. Stocks, like AAPL, continue to struggle, however, and that's causing a strained tape in that sector more than others, but it's hanging decently well considering the weighting in that stock. If we lose 1503 on the S&P 500, there's major support between 1470/1480. Only if we start losing this area of support do we need to be a bit more concerned. The market is very tough here, so, please, continue to keep things light. Exposure is fine, but not a lot, especially on the higher beta side.



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!

© 2013

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 - 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