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
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Gap Up Failure But Positive Divergences In Place...Will It Matter?

Stock-Markets / Stock Markets 2014 Apr 15, 2014 - 10:59 AM GMT

By: Jack_Steiman

Stock-Markets

It should. Those short-term charts have some pretty compressed down oscillators that normally give a bounce, especially when they have a positive divergence in place. We have that here and, while we can't rule out a complete crater down, I don't think the market is quite ready for the next leg lower. Sure, in time, but not right here although you don't let your guard down and you avoid froth stocks like you would the plague. No reason to be involved with those types of stocks, even if we get the bounce. While this divergence gives hope for a short-term bounce, the medium term looks poor for the bulls at this moment in time. Things can always change, but the charts are suggesting lower in time. But again, I don't think so right away. We'll have the answer to that soon enough.


Today started out with lots of hope as Citigroup Inc. (C) reported a solid earnings report. The stock beat on the top and bottom line and was rewarded throughout the day, although it closed off the highs. That said, it was a solid report. The financials held up well, but once the Nasdaq was up fifty points it was all downhill from there as the bears are now getting aggressive on moves higher. They have the indexes below their 50-day exponential moving averages and are, going to fight like mad to keep it that way and that's what they should be doing.

It's been a rare time that they've been able to hold any advantage, and now want to be sure to not give it away. While today wasn't a disaster for the bulls, closing so far off the highs, even with good divergences in place, can't feel good. This is what often occurs when a market is shifting from bullish to more bearish for the short term. That's the case even with divergences and oversold. It's just tougher to maintain upside action. Today was certainly a case in point for how difficult the game is for the bulls now. Again, not a disaster, but far from encouraging. Hopefully, the existing divergences can take us higher before falling once again with force.

When markets turn like this from bullish to mostly lower it's all about adaptation. If they don't adapt they pay the piper in a way that's unpleasant and mostly unnecessary. If you recognize what's going on you can deal with things in a more positive fashion. Not only do you need to be able to recognize bull and bear markets, but these types of markets as well. Not bullish. Not bearish. But correcting. We still do not have a single open gap down on the Nasdaq 100, even though it's well below the 50-day exponential moving average, which is utterly amazing. Gaps should occur along the way but far less in terms of numbers of them due to the fact that this is not a bear market, but a correction. 1847 strong resistance for the S&P 500.

Nice and easy here folks. Again, avoid froth. Be smart and adapt to the market environment in place.

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.


© 2005-2022 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