Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Ugly Weekly Charts...Still No Reversal.....Froth Remains Extremely High..

Stock-Markets / Stock Markets 2014 Jun 14, 2014 - 12:37 PM GMT

By: Jack_Steiman

Stock-Markets

The market is trying to find a way to hang in there. Yes, there was a bit of selling this week, but not much to talk about. Not nearly as much as many would expect considering how many problems the market is currently facing. The bears are somewhat in disbelief that the market hasn't fallen under the weight of froth alone. Gap downs get bought up. The bears are acting almost fearful of getting involved due to the markets inability to find sellers when things look really bad for the bulls. So, the week came and went, and in the end, the bears feel a drop better about things, but I don't think they feel satisfied. Maybe fearful, but definitely not satisfied.


They are wondering just what it will take, because not only did the market have big problems coming in to the week based on froth and technicals, but you can add overseas headaches regarding civil war and major unrest. While there was some selling there was absolutely no technical damage, thus, things remain open for next week. It's not a slam dunk that the markets will just fall because they need to correct. The market will most definitely correct, but probably do so when folks least expect it, or when the bears have totally surrendered to the possibility. Just the way it usually works. That said, the market can begin a major correction at any time. Just understand where we're at and adapt accordingly.

The first part of the headline says it all. UGLY weekly charts, and this evening you'll see a couple of them in the Dow and S&P 500. Very Nasty negative divergences. You never know when the negative divergences will kick in. You don't anticipate it. Most that have will tell you they wish they hadn't. Loads of pain. You see it, and then you respond to it, and not before unless you like to take enormous chances, that I believe no one should, but, of course, that's up to the individual.

Some want to capture 100% of a move, but by trying to do that they usually get nothing but losses. The charts are ugly, however, and, thus, be on alert that at ANY moment, based on divergences alone, the market can take a beating. It may take a day or a week or a month to kick in, but just be aware of what you're facing so you can, once again, adapt to the circumstances. Maybe we make another new high first, but just know that it's ugly out there on those weekly-index charts.

We began the week with the bull-bear spread at a ridiculous 45+% spread. That is down right, yes, there's that word again, UGLY! In normal times this alone usually leads to a pullback that can easily exceed 10%. We probably ended this week near the same level, give or take 1%. At some point it'll have to go back to the twenties or teens, so yes, there will be an important correction.

There's clearly and obviously a theme in this letter. The market is under intense pressure in terms of trying to hold up. So many things going against it from froth to technicals. Again, you have to see the proper reversal first before getting bearish. You can keep some small exposure long but be very careful about getting overly involved. Sure, we can make new highs first. That said, recognize the problems and make sure you keep yourself safe from unnecessary losses.

The S&P 500 has key longer-term support at a very interesting level. 1897 is long-term horizontal support while a pennies below that literally we have the 50-day exponential moving average If and when, and only when, we lose 1897 the charts remain favorable for the bulls. The 20-day exponential moving average is at 1922 thus that's the first stop of important resistance but in the end it's ALL about 1897. A strong close below and the selling is on. The level on the Nasdaq being the bottom of a large gap up at 4186.

The top of the gap is key-first support at 4204, but in the end, losing the entire gap is key, and thus, the key, important level is 4186. Nasdaq below 4186 and S&P 500 below 1897 is death for the bulls on a closing basis. One day at a time as we watch very closely for the first signs that a correction is about to begin. For now things remain status quo. Nothing more than a casual 70-RSI pullback has been taking 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