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
Reasons Why the Greek Crisis Will Only Get Worse - 30th July 15
The War On Cash: Why Now? - 30th July 15
Greece - The IMF Experts Flunk, Again - 30th July 15
Threat Of Cyber Warfare the “Other Reason To Own Physical Gold” Warns Rickards - 30th July 15
The 5 Biggest Myths and Lies about the Middle East - 30th July 15
Greece, Diversion, and the New World Order - 30th July 15
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

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stock Market Bubble in Trouble

Stock Market Back Testing...Now What....

Stock-Markets / Stock Markets 2014 Feb 09, 2014 - 10:21 AM GMT

By: Jack_Steiman

Stock-Markets

The market fell quite a bit from the first day of January and kept going pretty much until midweek this week. The market oscillators got very compressed lower, while the Dow was testing its 200-day exponential moving average. It told me that the market should be done selling for a while, and that a rally should take place, thus, the Spy long that was taken. The real question is once we tested the 20- and 50-day exponential moving averages from underneath, something that basically occurred today, would the market just quit, or would it surprise, take them out and go higher?


We don't know if they'll be taken out with force, but it was solid action today to be sure. We'll get our answer next week on the take out, or not, but we also got slightly overbought today on the short-term charts. On top of that, we got a strong gap up today that wasn't filled, thus, the bulls have added some strength to the technicals, which were very against them coming in to today's action. That has changed to more neutral now. You know the bears have struggled to remove strong gap ups, thus, their job once again became more difficult. The market is making things difficult for both sides now. Today was a great day for the bulls technically, so now we wait to see what early next week brings. That should be the defining moment.

When markets get compressed and move straight down you accomplish a lot with regards to sentiment. The bull-bear spread has moved down 18 points from 46 to 28%. On top of that, there are now major out flows from stocks to bonds. Doesn't take long does it? Folks are running to bonds. That's more than interesting, and shows how little it takes in terms of selling to make that happen.

Before the move up late in the week we saw the Dow correct 8%, the S&P 500 6% and the Nasdaq about 5%. That's not all that much. With that little bit of selling folks are running to get out of the game. Have to love it. This tells me the market shouldn't collapse again all that soon, but you never know. There's probably lots of back and forth for a while, so take it easy on both sides. We may need deeper unwinding back up on the daily charts for a bit longer, but don't bet on that too heavily. For now, at least, we're seeing folks get more bearish.

Support now is at today's gap up level on the SPDR S&P 500 (SPY) at 177.72. It won't be easy for the bears to eradicate this level. Only when they do on a closing basis can the bears consider that they're retaking the market back. Anything above that level keeps things neutral. Resistance is at 181.66. There's lots of room to move back and forth for a while just to make things more confusing for folks. If we do weave around for a while, that could allow things to unwind further to the upside on the daily charts, and then we should head lower again, but for now things are quite neutral. Play it as such.

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!

© 2014 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