Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
Build Biotech Wealth on Solid Platforms - 18th Apr 14
Has Solar Power Finally Arrived? - 18th Apr 14
Bank Depositor Bail-Ins and Real Assets vs Liability-Based Assets - 18th Apr 14
10 Ways to Screw up Your Retirement - 17th Apr 14
One of Harry Dent’s Three Keys to Market Prediction is Cycles - 17th Apr 14
Obamacare Proof Stocks - 17th Apr 14
Gold, Silver And The Mining Sector: Prepare For A Severe Fall - 17th Apr 14
Hidden Australian Life Sciences Bio-tech Growth Stocks - 17th Apr 14
Disrupting Big Data Status Quo - 17th Apr 14
What the Stock Market Bears Have Been Waiting for... - 17th Apr 14
Copper Is Pathological and Suffers from SAD, but It Has Value - 17th Apr 14
Old World Order New World Order, Chaos And Change - 17th Apr 14
Even The US Government Will Abandon the U.S. Dollar - 17th Apr 14
Gold - Coming Super Bubble - 17th Apr 14
Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - 16th Apr 14
High-Frequency Insider Trading - 16th Apr 14
Gold Prices 2014: Do What Goldman Does, Not What It Says - 16th Apr 14
These CEOs Will Make Investors Rich - 16th Apr 14
Climate Change, Central Banking And The Faustian Bargain - 16th Apr 14
Every Central Bank for Itself - 16th Apr 14
Social Security, U.S. Treasury Stealing Every Last Penny From Americans - 16th Apr 14
Ukraine Falling to Economic Warfare and Its Own Missteps - 16th Apr 14
Silver and Gold Miners Still Disappoint - 16th Apr 14
Silver, Gold, and What Could Go Wrong - 15th Apr 14
How I Intend to Survive the Meltdown of America - 15th Apr 14
France Wakes Up To The Multicultural Multi-Threat - 15th Apr 14
The Real Purpose Of QE - It’s Not Employment - 15th Apr 14
Peak Coal - 15th Apr 14
Flash Crash, Rigged Markets - What’s the Frequency Zenith? - 15th Apr 14
Forecasting U.S. GDP Growth: A Look at WSJ Economists’ Collective Crystal Ball - 15th Apr 14
Stock Market - Is Something Nasty About to Happen? - 15th Apr 14
How to Trade Your Way To Freedom - 15th Apr 14
Understanding (and Ignoring) the Media Bandwagon Against Gold - 15th Apr 14
When Stock Market Bubble Crashes, Take Refuge in Gold Stocks - 15th Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

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.


© 2005-2014 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

Free Report - Financial Markets 2014