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 Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Nothing Bearish At All ...Jobs Hotter Than Expected....

Stock-Markets / Stock Markets 2015 Feb 07, 2015 - 12:43 PM GMT

By: Jack_Steiman

Stock-Markets

Markets never change in this regards. When RSI's get overbought on those sixty-minute short-term charts it usually precedes a selling episode of some kind. Market sell in different ways. It can sell in a bearish fashion which means the oscillators lag the selling in price. It can sell in a bullish-fashion, meaning price doesn't fall much, while the oscillators reset quickly. This is what we've seen for the most part over the past many years. The RSI on the sixty-minute chat on the Dow hit 75 today, while the Nasdaq and S& P 500 hit 70.


The bulls tried to hold things up, but the inevitable selling kicked in which now has our RSI's averaging about 57. It can go lower, for sure, but it's a good start. And for that matter, it can just go back up from here. We'll see on Monday, but the one thing for now that can be said is that the selling was normal for lack of a better word. Nothing bearish at all. It can turn in to something more ominous. Never count out that possibility, but for now all we can say is that today's selling was normal technically.

There shouldn't be too much more selling barring unforeseen news over the weekend.

Rates shot up today based on the jobs report, which came in a bit hotter than expected at 257,000 jobs created versus 237,000 expected. This was the news wanted to hear in terms of an accelerating economy since all the other recent reports have been so poor. An accelerating economy is consistent with the concept of a fed eventually raising rates. It's the topic of the day almost every day it seems. When will they raise rates? The answer is really an easy one. When all of the key economic reports start coming in positively from the GDP to manufacturing to durable goods to ultimately employment. Having just one good report isn't going to do it.

In fact, it would require a stretch of solid reports across the board before the Fed would finally pull the trigger on her first 25 basis point raised in rates. It will be interesting to see how the market handles that news after the initial crater lower. My bet is it would recover for a while at least but would ultimately fall very hard if the rate hike becomes the first of a cycle worth of rate raises. Then the market will probably enter a bear, but for now we're a long way away from that first rate raise. She's a scared fed who hasn't seen close to enough good news in those key economic reports so patience for those who want the cycle to begin.

The earnings season has been mixed. Probably the worst quarter I can remember in quite some time. Yes, there have been plenty of huge winners but by far there have been misses that have equated to huge hits to individual stocks. Many of them have caused bear markets in those individual names, but as usual the market has used rotation as an answer. The story of rotation has been with us for years now. This will be the first huge hint that things may be changing down the road. When money stops trying to find a home then we know things are changing from bull to bear.

Folks, keep track of these good reporters, and when the selling comes they sell off the least, while the bad earners keep taking it on the chin, thus, the lesson is clear. If playing long you should stick with the stocks that had full candles up on their earnings day. Conversely, if you need to short because you have a bearish bias, simply focus on the full red candles on stocks that had a bad report. Try to simplify the most difficult game around. It's never easy but this process of what you get in to short or long really isn't difficult. As time moves along we keep an eye on the best stocks to see if they can maintain their bids. As long as the best are treated with royalty we know things are still bullish big picture. Use weakness to buy. Otherwise i would say remain peaceful. Don't over play out of greed.

Have a nice weekend!

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!

© 2015 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