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Nasdaq On Breakout...Greece On Deck

Stock-Markets / Stock Markets 2015 Feb 14, 2015 - 03:04 PM GMT

By: Jack_Steiman


When you're either a few points above or below a critical area of resistance, not getting through doesn't mean you failed to make it and that things are heading south. On the other hand, if you clear resistance by just a few points it doesn't mean you're really made the breakout. You want to see a forceful failure or you want to see a forceful push through on the close. That tells you if things are bearish or bullish. So we'll just say the S&P 500 is real close to making a strong breakout and that could come on Tuesday if the news is just right on Monday. We'll talk about that later on in this letter. A close above today was good, but it's just not far enough above to call it a breakout in my world. I like at least half a percent, if not more on a closing basis. A nice day for the bulls as the oscillators stayed overbought on the short-term charts. Can you say froth? I think you can. It continues to rock on.

Greece is the big news we'll be watching on our holiday day off this coming Monday. Will the problems there be resolved peacefully or will we get more of a standoff position without resolution. The European markets are going to react to this news and we will follow along, so it should be a wild open for us on Tuesday. Our markets are feeling frothy again as seen in the latest bull-bear spread that's bound to worsen when we get the new numbers next week. But that means the bulls want to ramp this thing higher and the right news will do it. When political leaders get together you never know what the outcome will be but there's hope based on the conversations that have taken place over the past several days.

The market acted today as if it expects good news, thus, it is vulnerable if the wrong outcome prevails. The problem for traders is you don't want to be left holding nothing at all in case the news is solid. You then have to chase up and that's never the best way to play this game. With this in mind we are holding exposure, but not so much that if the news isn't good we'll take a pounding. We are in solid, strong companies, thus, even if the news is bad we shouldn't get hit too hard. No way to know, but you want the premier stocks in a froth driven environment. Greece will once again be front and center over the weekend. Here's to hoping things turn out well.

So we closed over 2093 on the S&P 500, and now we're well above the 4814 breakout on the Nasdaq 100. That has the breakout in the rear view mirror and that's bullish because now even some selling can still hold the breakout. The S&P 500 should not be considered safe yet, but the good news is that the Nasdaq 100 is leading and you always want the most-frothy stocks to lead the way on any strong market move. You want the bulls to have the appetite for everything that's wrong with buying the stocks they do. No reality is what we want. If the bulls were to turn rational the market would collapse, so it's good to see the ridiculous be in charge. When non-froth leads such as the world of the Dow and S&P 500 are, you don't feel as good about things so now we watch to see if the Nasdaq 100 can pull the S&P 500 far up enough for it too to be able to put the breakout in the rear view mirror.

For now things are bullish, but froth and poor weekly and monthly charts are still out there and should have your respect.

Have a nice long 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.

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© 2015

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.

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