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
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Holding 1628.... Nasdaq Lags… Nothing Bad...

Stock-Markets / Stock Markets 2013 Jul 09, 2013 - 10:16 AM GMT

By: Jack_Steiman

Stock-Markets

Today was an important day for the bulls. They finally captured the gap resistance level of 1628 on the S&P 500 on Friday after numerous failures. They didn't clear cleanly as the close was only approximately four points above, but it was good to see the close above 1628. Today the bulls were able to get a gap up again putting some further distance away from 1628. Every point counts when you're trying to move through a key level of resistance such as 1628. The move today wasn't huge, but it was decent and that's really all that matters as you can't have explosive days every day.


The important thing is whether the S&P 500 was able to hold the 1628 level, and whether it was able to run a little higher. We can answer yes to both of those questions. As time moves on, the longer you can hold above, and the further you pull away, the easier it is for the bulls to get more aggressive as time will allow them to feel better about where things stand. If the bears can't make a big run against that 1628 level with force below, the bulls will know they're in full control and will seize on it. The bulls are in the clear here so they will need to get going on it sooner than later. But for today, it was good to see the bulls follow through on holding 1628 and running up a bit further.

Some are talking badly about how the Nasdaq lagged today and how that is never a good sign. Not true. It's only a bad sign if it becomes a habit. Day after day, but one day does not a trend make. The Nasdaq has actually out performed by quite a bit, and thus, it can't be viewed as a shock that it spent a day letting the other sectors catch up a bit. When you run the fastest you get overbought by the most and this is exactly what took place on the Nasdaq. The sixty-minute chart got the most overbought, thus, it had to pull back the hardest.

It got well over 70 RSI and that's not sustainable as well know by now. Some selling to unwind is never a bad thing so we look at how the Nasdaq under performed today and take it with a grain of salt. Nothing bearish whatsoever. Now, if it becomes a habit as the market tries to move higher in the weeks ahead, that would become a red flag. It's never great to see froth not lead when moving upward. Froth needs to lead and there's no greater place for froth than what we find in the Nasdaq. Valuations as we all know are totally out of control there but that's how bull markets work. Lead me to your frothy leaders. I think today was nothing more than the Nasdaq pulling back more from overbought and that it will overall continue to lead the market higher over time.

It's now earnings season. The bar has been lowered due to the numbers that came out the past few quarters. Many key companies have lowered their expectations. This allows these companies to have an easier time beating the numbers they previously talked about. Many stocks have pulled well off their highs, thus, it'll be somewhat easier to get them to climb back up if the news is even respectable. Bad news is likely to be treated as such, but if companies can talk up the future a bit then most should get away with things, even if they aren't as good as hoped for this quarter.

Alcoa Inc. (AA) always starts things off, but they're a meaningless stock with regards to the overall market. It's all about the leaders in leading sectors that will be reporting in the days and weeks ahead. The financials will be watched closely as they start their parade of reports this Friday when Morgan Stanley (MS) and Wells Fargo & Company (WFC) come in. If those two are good it sets the tone for the rest of that group.

JPMorgan Chase & Co. (JPM) and Goldman Sachs Inc. (GS) are either later this week or early next week. Tech stocks will also be in focus. How much worse can it really get for Apple Inc. (AAPL)? It has tried to rally lately off its double bottom with a positive divergence. If AAPL can help that would be huge for the Nasdaq, the natural leader of the market. It's crunch time as these reports will go a long way to helping us understand whether the S&P 500 can hold above 1628 for the longer-term.

The S&P 500 has support at 1628 and then there's a conglomeration around the 1600 level. Below that would be a double bottom at 1560. If we lose 1560 we can easily go towards the 200-day exponential moving average at 1529. If we can break through 1654/56, we can test the old highs at 1687. But that will require some good news on the earnings front.

For now you use weakness to buy or hold more cash as we learn about how earnings will look. I think they'll be fine but we shall see.

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.


© 2005-2019 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