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
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
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

Stock Market Gap To Gap...Hit The Top...Reversal....Nothing For Either Side

Stock-Markets / Stock Markets 2014 Aug 16, 2014 - 04:05 PM GMT

By: Jack_Steiman


The market came off the bottom with a series of gap ups as it back tested lost 20- and 50-day exponential moving averages. The big question was would those moving averages get taken back out or would those levels act as a wall of resistance, cascading the market back down once hit. We got through the moving averages, and hit the 197.00 SPY gap. That is where the market rejected the move higher with Ukraine/Russia the catalyst to get things moving back down intraday. At the same time that news came out, we also saw the short-term sixty-minute RSI's hit extreme levels of overbought with some readings as high as 80.

80 RSI along with gap resistance, along with bad news from Russia, and down we went. 23 S&P 500 point off the top within forty-five minutes. Not bad at all. You can unwind a market very quickly with the right mix of events both fundamentally and technically. We are in a far more difficult environment now with regards to the bull rocking higher, so we can't be shocked that today's gap was short term. A third straight gap up the final top short term. The bears are happy we didn't get through S&P 500 197.00, while the bulls feel better about creating some gap ups on this back test. Neither side thrilled, but neither side in despair for now.

With the move off the bottom, and with today's top in place, we now understand where we are from a technical perspective, and neither side is going to be happy about this. The range is enormous. Spy 193.00 to Spy 197.00. In between is now total noise, and when a range is this wide and loose, you have to deal with tremendous whipsaw that can get very emotional. This is where the market takes down the most traders. Too much action for a lot of meaningless noise.

With the spread so wide you can enter a play, or a series of plays, and get shaken out very quickly thinking something is happening that in truth may not be happening at all. With forty points the spread, think of how dangerous it can be to get overly involved. Only when we break below 193.00 on a closing basis, or break above 197.00 on a closing basis, can we get excited about what's next. That can take some time, so be careful not getting overly involved when you shouldn't be. We are now in a very wide and very loose trading range. Dangerous the best word for it.

The bull-bear spread probably took a move higher this week sadly. It would have been best if it kept falling down in to the 20's as a spread. We closed last week at 30%. Now we're probably at 32/33%. Top was 46%. If we can get one more very-nasty leg down in a correction we'll get those levels down in the teens. How awesome that would be for the bulls, but that is still an unknown. Will the rates game prevent such a move lower? It's possible, but there's still every chance we'll see another strong move down. Be careful and play the 193 to 197 range appropriately. Watch to see which range breaks over time on a closing basis with force. Day to day folks.

Have a nice weekend!



Jack Steiman is author of ( ). Former columnist for, 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!

© 2014

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 - 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