Best of the Week
Most Popular
1.Will UK Interest Rate Rises Crash House Prices? - Nadeem_Walayat
2.Full on Crash Alert for Major World Stock Markets... - Clive_Maund
3.Gold And Silver Market Bottoming? Big Rally Imminent? Reality Check Says NO - Michael_Noonan
4.The Coming Silver Price Rally Will Outperform All Previous Ones - Hubert_Moolman
5.The Trigger For The Upcoming Stock Crash - Harry_Dent
6.Imploding Department Store Results - James_Quinn
7.Dr. Copper is Speaking, are you Listening? ... - Rambus_Chartology
8.Pandemonium in the Stock Market, Dow falls 1,000 points in a week - EWI
9.Asia's Whirling Dervish of Devaluations Has Encircled China's Exports - Keith_Hilden
10.China Weakens the Yuan; Rattles Global Stock and Financial Markets - Gary_Dorsch
Last 5 days
Independant Scotland 1 Year on, UK Civil War If the SNP Fanatics Had Succeeded - 30th Aug 15
Gold’s 7 Point Broadening Top - 30th Aug 15
The Day the Stock Market Shook the Earth: Takeaways From the Dow’s 1,000-Point Drop - 30th Aug 15
Gold Price Rally Marked by Short Covering - 30th Aug 15
Aging Stocks Bull Market - 29th Aug 15
Economic Destabilization, Financial Meltdown and the Rigging of the Shanghai Stock Market? - 29th Aug 15
The Stocks You Should Be Buying After the Market Drop - 29th Aug 15
How I Learned to Stop Worrying and Love Market Fluctuations - 28th Aug 15
China's Yuan Devaluation: Why It Was "Expected" - 28th Aug 15
Stocks Go Nuts But the Question Remains – Will the Rally Stick? - 28th Aug 15
Fed’s Stock Market Levitation is Failing - 28th Aug 15
The Eight Energy Systems Driving The Stock Market Rout - 28th Aug 15
Silver Sold, then Squeezed - 28th Aug 15
U.S. Economic Fundamentals 'Look Good' - Bullard of St. Louis Fed - 28th Aug 15
Stock Market Margin Calls Mount - 28th Aug 15
Einstein, Physics, Gold and The Formula To End Economic Decay - 28th Aug 15
The 10 Best Stocks for Options Trading Plays in This Market - 28th Aug 15
Economics of a Stock Market Crash - 28th Aug 15
Currency Wars Detonate; Gold Refuses to Budge - 28th Aug 15
UK Immigration Crisis Hits New Record, Trending Towards Becoming a Catastrophe - 28th Aug 15
The Ultimate Cash-Management Guide - 27th Aug 15
Why a Fed Rate Hike Could Be a Blessing for Gold Prices - 27th Aug 15
Why Devaluing the Yuan Won't Help China's Economy - 27th Aug 15
Stock Market Trend & Trade Signal Of the Decade - 27th Aug 15
Keep Your Eye On the Gold and Silver Bear - 27th Aug 15
Refugees Expose Europe’s Lack Of Decency - 27th Aug 15
How to Profit from China's Currency War - 27th Aug 15
How China's Currency Policies Will Change the World - 27th Aug 15
Chinese Medicine not Impressing Dr Copper - 27th Aug 15
Novel Biotech Novel Technology Platforms with Dramatic Growth Potential - 27th Aug 15
China Stocks Bear Market Crash, Are We Near the Bottom Yet? - 27th Aug 15
Stock Market Crash Black Wednesday Rally Crushes the Bears - 26th Aug 15
VIX Shorts Being Squeezed While SPX Prepares for Another Decline - 26th Aug 15
Why China's Economy is Deteriorating - 26th Aug 15
Citizenship as a Weapon: Travel Controls and What You Can Do About It - 26th Aug 15
Gold and Silver - How To Manipulate a Market - 26th Aug 15
How to Make a Quick 20% When the Stock Market Crashes - 26th Aug 15
Why We Can’t Handle A Stocks Bear Market - State Budgets Will Implode - 26th Aug 15
Stocks Bear Market, Is This 1929 All Over Again? - 26th Aug 15
The One Trading Strategy You Needed for Stock Market Crash - 26th Aug 15
Second Chance To Buy Cheap Gold Mining Stocks - 25th Aug 15
Gold Facts and Gold Speculations - 25th Aug 15
The Stock Market Crash Season is Here… - 25th Aug 15
Liftoff Setback Leads to U.S. Dollar Pullback - 25th Aug 15
The Stock Markets Are Extraordinarily Volatile, Here's What to Do - 25th Aug 15
Israel: The Case Against Attacking Iran - 25th Aug 15
Saudis Could Face An Open Revolt At Next OPEC Oil Meeting - 25th Aug 15
How to Calmly Weather This Stock Market Downturn - 25th Aug 15
Stock Market Sound the Alarm - 25th Aug 15
Stock Market Meltdown - Dow Monday 1000 Point Crash then Rebound, What's Next? - 25th Aug 15
El-Erian: Stock Market Sell off Is Not 1998 or 2008 - 25th Aug 15
Gold the Ultimate Financial Crisis Insurance - 25th Aug 15
Stock Market Black Monday Crash Fizzles Out, Next Black Tuesday? - 25th Aug 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Stocks Slide

Stock Market Some Unwinding...Earnings Poor....Caution The Word....

Stock-Markets / Stock Markets 2013 Apr 20, 2013 - 08:05 PM GMT

By: Sy_Harding

Stock-Markets

This was a week for the bears. They were able to take all of the key index charts and bring them down with a little bit of force. The indexes were down roughly 2.5% on average, somewhere between 2% and 3.5% depending on where you look. The market had grinded for many weeks and then a few days came with some decent selling which basically took out the gains from those previous weeks. When market fall they usually fall pretty fast and can remove many weeks of prior gains in a very short time span. Today was maybe the most interesting day of the week in that the market was bifurcated in reverse from what we're used to seeing. The market has been better for the bulls the past few months when they concentrated their efforts on the Dow and S&P 500 stocks but especially the Dow stocks. Lower P/E and lower beta stocks with dividends have led the way.


Today we saw the Nasdaq lead the way, but, I have to say, there was a huge excuse. I will touch on the topic of earnings later in this report. It's always best when all sector climb in equal quantities. Today we did not see that so there's nothing to get very excited about at all. It's an oversold rally for now. Lots of resistance overhead, which I will also talk about later in this report. This week, in summing it up, saw us pull off the top fairly decently with the bears now somewhat in control for the short-term. Nothing too horrific, but there's the potential for another 3-4% down across the board over time.

Everyone wants to know the true effects of QE 1,2 and 3. Mr. Bernanke has been flooding the world with real dollars, so tell us sir, how are we doing? Not so good it seems. Manufacturing is getting worse. Jobless claims are worsening as well. Jobs aren't being created as economists thought they would. Not good at all. In fact, manufacturing is nearing recession numbers as the last report was barely over the flat line reading of 50.0 when it saw a number of 51. Not good, especially when it was a fall of nearly 6% from the prior month. There's a bigger concern setting up.

Earnings are well below expectations for the most part. Yes, there are some great reports out there and those reports are being rewarded. However, the number of misses from key companies is alarming. General Electric Company (GE), eBay Inc. (EBAY), Intuitive Surgical, Inc. (ISRG), Albemarle Corporation (ALB), and International Business Machines Corporation (IBM) to name a few over the past two days alone. It's across the board. All that cash and still a very high number of warnings which has to concern everyone. Maybe not the Disneyland of the stock market, but the real world can't be happy. In time, if it continues, it will hit the market as well. Makes you wonder what things would look lie if the Fed did nothing all these years. It would be beyond ugly but probably necessary.

It's not good to inflate world prices while the majority of people lose more and more of their salaries. He's inflating our health care costs. He's inflating our food costs. He's inflating our energy costs. Not our salaries. What's left for him to do? I have no idea but he won't be letting up any time soon as the only way to keep things going for our economy is to keep the stock market rocking and thus he will try with every fiber of his being to do just that. For the current quarter it's alarming to hear how many companies missed on their report and beyond that, how many guided lower for the next quarter or the rest of the year. It's not good thus far. QE is still not working.

When you're in the raging part of a bull market, everything is good. No matter what a company may report on their earnings, the stock will likely go higher. They can say things are bad and don't look very good but the excuses will come out in spades which will allow the stock to rise anyway. If you report good news, you're beyond rewarded. The froth gets out of hand. Just the way it is in the raging part of a bull market. In a bear market you see the opposite take place. Bad news gets slaughtered to the point where you almost can't believe what you're seeing.

Good news won't be allowed to take hold. The bears will find the excuses instead of the bulls and convince everyone it's a fluke and that things will have to worsen. The stock will sell. Where are we now? In between for a while. Good news is being treated as good news. It can even get frothy good. Bad news, however, is being treated as bad news. No grace for now. If you're bad you will pay the price. See IBM and ISRG today to name just two. No love when you don't say the right things. The market is neutral here for a while to allow unwinding. Be more than careful.

Let's discuss support and resistance levels as the market swings about with more of a down trend in place for the moment. The Dow closed at 15,547. First resistance is real close or the 20 day exponential moving average currently at 14,597. If that clears, horizontal resistance is at 14,756. Support exists at its 50 day exponential moving average at 14,359. This is massive support as well as the Dow has been the leader, and thus, it would not be great if it lost its 50's. The S&P 500 closed at 1555. Resistance is just five points above or the 20-day exponential moving average at 1560. One percent above that is horizontal resistance at 1574.

Key support or the 50-day exponential moving average is at 1541. It tested recently, but thus far, it has held. If the Dow and S&P 500 were trading below their 50's the market would be in big trouble near-term. The Nasdaq closed at 3206. The weakest of the major sectors has resistance at 3232 or its 20-day exponential moving average. Support comes in at 3100 or gap while 3086 is the 200-day exponential moving average. Not good if it loses its 200's. Bottom line is things aren't great and their not terrible. I do not believe we're headed into a bear market at this point in time but the market could use more selling. We shall see what the market offers up in the near-term. Lots of risk so please be careful.

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!

© 2013 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