Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The End of the World History Stock Market Chart : Big Pattern = Big Move - 26th Jan 21
Stock Market Recent Sector Triggers Suggest Stocks May Enter Rally Phase - 26th Jan 21
3 Top-Performing Tech Stocks for 2021 - 26th Jan 21
5 Tips to Manage Your Debt - 26th Jan 21
Stock Market Intermediate Trend Intact - 25th Jan 21
Precious Metals Could Decline Before their Next Attempt to Rally - 25th Jan 21
Great Ways of Choosing Good CMMS Software for a Business - 25th Jan 21
The Dark Forces behind American Insurrectionists - 25th Jan 21
Economic Stimulus Doesn’t Always Stimulate – Pushing On A String - 25th Jan 21
Can Karcher K7 Pressure Washer Clean a Weed Infested Driveway? Extreme Power Test - 25th Jan 21
Lockdown Sea Shanty Craze - "Drunken Sailor" on the Pirate Falls Crazy Boat Ride - 25th Jan 21
Intel Empire Fights Back with Rocket and Alder Lake! - 24th Jan 21
4 Reasons for Coronavirus 2021 Hope - 24th Jan 21
Apple M1 Chip Another Nail in Intel's Coffin - Top AI Tech Stocks 2021 - 24th Jan 21
Stock Market: Why You Should Prepare for a Jump in Volatility - 24th Jan 21
What’s next for Bitcoin Price – $56k or $16k? - 24th Jan 21
How Does Credit Repair Work? - 24th Jan 21
Silver Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Fear Versus Fundamentals....No Winner For Now....

Stock-Markets / Stock Markets 2015 Sep 22, 2015 - 09:47 AM GMT

By: Jack_Steiman

Stock-Markets

A horrible market environment exists when there are have two opposing forces battling it out, each with a great weapon on their side. The bulls have a very powerful weapon in the form of fear. The masses are very fearful here. Pessimism is ramping. The bears also have a strong weapon on their side. A weakening, global, economic environment. Two powerful market forces fighting it out every single day. Since sentiment is such a strong force all the time in the market it's going to be nearly impossible to break forcefully below 1867 on a closing basis. Not impossible, of course, but very difficult. It would take some really bad news to make that a reality.


It could happen in the force of recession verified by a sub-50 ISM Manufacturing Report on October 1, but even then it won't be easy. Sentiment is a key driver for the stock market at extremes. With the bull-bear, and other sentiment readings, such as short interest at incredibly bullish levels, it's going to be very hard to kill the market off for good for the short-term. It was a mistake for me to take off the SPY long, since it can probably be held for several months with gains. Not that it'll blast off, but it's likely to trend higher, even if we retest 1867, since pessimism is just too intense. I will look for entry into ETF's in the near future. I'm hoping we just don't blast out first.

It's going to take some time for the bulls to create enough optimism for the market to fall hard again and allow a bear market to take over. We probably need equal or likely new highs over the coming months, before the market can fall hard for a more prolonged period of time. Only when optimism rises enough along with massive negative long-term divergences can the market start a bear with force. That's quite a ways away, but it will happen. So, for now, the battle is on. You saw it in full force today. A powerful move up, followed by a very powerful move down, and then back up yet again. Neither side able to take control. The bulls were giving each other high fives early. The bears later on and in the end both were confused and tired, although the bulls won out a little bit. Nothing from nothing. Nothing the key word. The market giving us nothing, but again, I do expect higher in time. I doubt fundamentals can win out over sentiment in the short-term. That's a longer-term story.

The Fed could actually help this market blast out if they would come out and say the right thing here, even before their next meeting comes up. Tell the world they're going to raise rates slowly and in a dovish fashion starting next month. Take away the uncertainty and show some confidence she truly doesn't have, but show it anyway. In other words, lie. It goes on all the time in this game, anyway, so go for it, and let everyone know things are fine, even though they're not. Raise a quarter. I mean come on, how much damage can a quarter percent do rates when it's from 0 to .25? None at all so do it and take away the uncertainty and allow the pessimism to have a catalyst for the next rise higher in the averages. The pessimism is so powerful here that it really wouldn't take, but the slightest of good news to get this market rocking back up, no matter how bad things truly are around the world.

The bulls just need to get the Nasdaq, the froth leader, to lead yet again. It has six points of double resistance it needs to clear to get the market rocking higher. 4894 is strong gap resistance, with 4900 being the 50-day exponential moving average, meaning a decent close above 4900 sets the market in motion higher. The shorts would be forced to cover, and the shorts are out there in a big way. We got to 4881 today, only to see that level fail badly, but at least we got close. Again, one statement from the Fed will get the job done. The news could also come from overseas in the form of China with a "surprise" report on manufacturing, if you catch my drift. You just never know where the good news will come from when the market needs it. So stay open and wait for it. It's probably not far away, since sentiment likely just won't let the market fall too much, although it definitely can fall some.

The Nasdaq was weakest today as those grossly frothed out biotech stocks took a pasting. That caused the Nasdaq to fall half a percent shy of taking out critical resistance as I mentioned from 4894 to 4900. A strong close over 4900 will get the job done, but the nasty reversal during the day will make things tougher short-term simply because a lot of technical damage was done to the leading area of froth, the biotech stocks. Huge, 50-day back-test failures with long down candle sticks. It'll take time to recover the damage done. Big sellers hit these stocks in a very big way, so they won't lead very much for a while. Patience is the name of this boring game which has developed sadly. Nothing is easy for either side, but neither side is giving in easily to the other. The bears attacked where they needed to today and succeeded in holding the Nasdaq off.

So patience, with the best way to play being to buy weakness and avoid froth stocks. Day to day folks. Sorry. It is what it is, but remember, pessimism won't likely allow for anything too severe, although nothing is truly safe for now.

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.


© 2005-2019 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

6 Critical Money Making Rules