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
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 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

ECB Thursday...Jobs Friday....Fireworks?.... Stock Market Froth Out Of Control..

Stock-Markets / Stock Markets 2014 Jun 05, 2014 - 10:15 AM GMT

By: Jack_Steiman

Stock-Markets

Fireworks could be in the cards for the market here. We have two huge events the next two mornings. We have the ECB voting on rate reductions tonight as well as deciding on a QE infusion. If the Euro zone gets what they want, we should see it rally, and that should spill over to our markets ahead of the open. If the market doesn't get what it wants, then the euro zone markets could crash out and things could get very tough for the bulls in the morning.


Draghi is under pressure to do the right thing for their economy, and the pressure usually gets him to do the right thing. He also can be a bit of a me-against-everyone from time to time, but I don't think he'll be playing any ego games with this type of situation, thus, I do expect the rate cut. I'm not nearly as sure about the QE part of the deal, so we shall see how the markets overseas react to what takes place.

Of course, tomorrow morning will be interesting, but so will Friday morning. We have the huge Jobs Report pre-market, and if the report mirrors the ADP Jobs Report from this morning, we're in trouble. The report today missed horribly, and this helped push our futures down pre-market this morning, before recovering as the day went along. I'm not sure our market can handle a really bad report for one critical reason. Sentiment! The bull-bear spread is now at a major sell-signal reading of 44.8%. It doesn't get much more bearish than that for the bulls for the short term.

Of course, it's only one important indicator, but when the spread is over 40% bulls-to-bears, you have to be prepared for a sudden and deep-sell episode. Timing it is truly impossible as the market often needs a catalyst to get rocking lower, but it can occur at any moment. When sentiment gets this bad you often see the market fall even on good news, thus, nothing is truly safe. That said, if the market does need a catalyst to get moving lower, the Jobs Report can be the thing the bears need to finally get rocking with force. Friday morning should also hold some fireworks. It won't be dull.

It's too bad the froth has ramped this hard. 44.8% is a real headache not to be ignored. Whenever the bulls hit 60%, the market really struggles. We're currently at 62.2%. It's not an immediate signal as the rest of the market is on a buy signal. Clearly, the daily charts look favorable, especially the Nasdaq. Price always trumps everything else, but this type of spread is really nasty from a blast off higher perspective. It can happen.

Nothing is impossible, but it really will be tough for the bulls to keep forcing upward action due to this headache. We watch 4204 down to 4186 on the Nasdaq, which is massive gap support. If that level area goes away, it's likely lights out for the bulls.

Again, one day at a time. See it and react. Don't anticipate too much.

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