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 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 Unwinding Sentiment - Lateral To Nowhere - Fed On Deck Next Week

Stock-Markets / Stock Markets 2015 Jun 14, 2015 - 03:37 PM GMT

By: Jack_Steiman

Stock-Markets

If the market is going to move laterally, it's really nice to see the worst day of the week occurring on a Friday. Leaving a nasty taste in the mouth of those relentless bulls. This is important, because it's before a weekend, and, thus, there's too much time to think, or, in other words, get emotional. Traders thinking we just can't break out no matter how close we get, and now they have to go in to the weekend on a down note. Turns bulls in to bears, or at least agnostic. We're begging for this, and somehow the market knows how to make things happen when it needs it to. There's nothing worse than a bad feeling late in the week, and, if this played out as I think it did, we may get our first reading below 30% on the bull-bear spread since last October, and only the third reading below 30% in roughly seventy weeks. That's unreal. It's hard to make sense of that when you normally would equate this type of behavior in terms of too much bullishness with a major market correction, if not a bear market.


We haven't come close to even a decent correction. Some pullbacks, for sure, but nothing that one would feel has been overwhelmingly bearish for equities for any extended period of time. Just nothing in terms of consistent selling that would allow the bulls to shake in their pants for a while. With the prior week giving us a reading of over 30%, maybe we'll finally see a nine as the first number. I know I would like to finally see some real fear kicking in. And not just bulls to agnostic, but I would really like to see the bulls turn bearish. Spike that number over 20% with force. That said, I'll take any reading that equals below 30% quite happily. The process seems to be very quietly taking place and that's good if you're a bull.

So how does one get to be bearish? Or at least calm their bullishness? Stay in a lateral market that continues to let the bulls down every time it seems it's ready for the next leg higher. If you push the bulls too far, meaning failure after failure, for now, almost six months, eventually they'll get annoyed. They'll get emotional, and that all happens with a base that never ends, or at least never seemingly does. It's almost six months for crying out loud. It's almost unimaginable that this market hasn't been able to get out of its way without being bullish or bearish for so long. To head fake up and head fake down, over and over just when one direction seems guaranteed to play on everyone's emotions.

We are basically at the same level we were at the end of December when the S&P 500 printed 2093. That was on December 29, and here we are on June 12, and at the same level. For a long time the bulls simply said that it's fine that we're moving laterally. It's healthy. No problem. That way of thinking is going away now. The lateral action isn't bullish or bearish. One has to wonder just how long this nonsense can continue onward, but it is what it is and you need to adapt to the base, so as to not get overly involved at just the wrong time meaning buying when it looks real good. It's best to buy weakness, not strength. The base is still very much with us and shows no signs of imminent death.

Two relevant features for next week. It's getting closer and closer to doom for Greece as the days pass towards June 31, when they have promised to bundle all their weekly overdue payments in to one grand payment. There have been negotiations ongoing, but no progress has been made. Lots of walking away from the table, which isn't a good thing. The Euro Zone is playing big-time hard ball here, while Greece, I think, expects the usual white knight to ride on in and save the day. You know what, they're probably right, but the Euro Zone is playing a strong game of chicken here. Lots of anger by the rest of the Euro Zone.

They're tired of bailing out the weak and the sick. They may have no choice, but it's getting ugly. This is critical to watch as the days get closer to the thirty first of the month. On top of that, we also have to watch the words out of the Fed at their meeting next Tuesday. Will they or won't they raise rates now. It's highly doubtful, but the market is tuned in to every word out of Fed Yellen's mouth. Will she hint that one is inevitable in the near future, or simply leave things open based on economic reports to come in over the coming months? Every word will be scrutinized. So there's lots on deck next week that can be a huge market mover. Nothing is really safe. Buying weakness is best. Chasing strength is not.

In the meantime, we watch the base range from S&P 500 2040 to 2134 with keen interest as always.

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