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
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
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

Summers Out... Stock Market Likes But Fades Late.... Nasdaq Lags Badly

Stock-Markets / Stock Markets 2013 Sep 17, 2013 - 07:52 AM GMT

By: Jack_Steiman


The market sent a strong message today about what it thought of the prospects of Larry Summers taking over as the head of the federal reserve. Mr. Bernanke and his liquidity machine are on the way out this January. The market wanted to get more insight into who may take over. It wanted someone more in tune with the ways of Mr. Bernanke. In other words, free cash. Mr. Summers is known to be the opposite. He doesn't believe in nonstop stimulus where Ms. Yellen does believe in it. The market was hopeful to have someone step in who would basically keep the machine running if necessary, and thus, celebrated the news that came out over the weekend when Mr. Summers said he was no longer interested in being the head of the Fed world.

Futures blasted up all over the world. Our futures were up huge last night with the Dow up over 220 points when adding in pre-market fair value. We basically opened on the high and faded slowly but surely for the rest of the day. The Nasdaq closed over 40 points off the high. The pullback was not shocking since intraday RSI's reached over 80 on the Dow and near 80 on the S&P 500. The Nasdaq closed near the lows with the Dow and S&P 500 holding on to respectable gains, although they too closed well off the highs. Anyone who bought the market open took losses for the day. Bottom line is today is yet just another day in this meandering market trading in quite a large range between 1627 at the bottom and 1710 at the top. Bulls did do some damage, but they were unable to clear 1710 key resistance. Thus, we will likely trade on news events in the days ahead. Until 1627 or 1710 gets taken over with force, no one is truly in control for the short-term. Meandering will continue for now.

You watch to see where a market throws its dollar bills when you get news such as we got over the weekend with regards to Mr. Summers and Ms. Yellen. Because she's a clone of Mr. Bernanke it's no surprise that the financials got a decent bid for the day. The money flowed out of technology and into financials because traders see that area as being the biggest beneficiary on the news. That said, this market keeps doing the one thing that keeps the bull going. Traders are finding places to hide even when things get overbought or when a sector or two are out of favor. Rotation, rotation and more rotation and that's the key to a strong bull market.

Yes, there are moments when the market needs to sell a little harder for a while and nothing really holds up. But most of the time different sectors of the market are finding a bid when others are not. That keeps the market meandering about, but it also keeps the market from falling too hard, thus, making things more bearish. So yes, news is key for the market now, and we'll get that in a big way on Wednesday when we hear from the Fed. News again will drive the market. Hopefully it won't be to the theme of more meandering. My gut says why not, let the market sell the news initially. Maybe this time the market will fake them out, but it makes more sense to get some selling if there's even a hint of pulling back on the those free dollars. Fireworks Wednesday should be the theme of the day.

With the S&P 500 closing below 1710 due to the late day pullback, that level remains the key level of resistance for now. If we can clear 1710 with some force, we can get to that long-term up-trend line at 1730. Neither one will be easy to clear, especially 1730 if we ever got there. The market would be very overbought, and it's very rare for those long-term trend lines to clear on the first try. They can back and fill while trying to break through, but may take many attempts before getting through, if indeed we eventually do get through. 1674/1672 is gap support on pullback's now. Some exposure makes sense. Too much does not at these nose bleed levels.



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