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

Fed Talk... Rates To Rise.... Watching S&P 500

Stock-Markets / Stock Markets 2015 Nov 19, 2015 - 10:10 AM GMT

By: Jack_Steiman

Stock-Markets

The stock market has been resilient no doubt. The bulls are buying up moves lower over and over ever since the bull-bear spread got down to minus 10%. In a bear market minus 10% reading isn't all that important. It can and will go much lower than that, but since all we had was a correction when we reached minus 10%, the bulls became active once again. There hadn't been any real distribution volume on that last correction, so that was one way to recognize that the bear had yet to begin. Let's face it, the best way to blast off a new bear market would be to make new highs and get a negative divergence in real time on those horrible-looking, monthly index charts.


We have worked our way back to plus 16% on the bull-bear spread, but that's simply neutral, and not playing in to froth on any level, thus, the green light is still on for the bulls. All of this has allowed the market to hang tough after making a trip down to critical support on the S&P 500 at 2020. After hitting 2022, we have moved quite a bit higher, and are now looking to take out 2075, or major gap resistance on the S&P 500. If we can get above that we can try for new highs above 2134 on the S&P 500. Only time will tell if we get the move, but, thus far, you have to at least like the way the market held and blasted off support. Often this is a good sign for the bulls in the near-term. The energy is just not there for the bears as of yet to get the next leg lower.

All eyes and ears were tuned in to those fed minutes, which came out at 2 p.m. eastern time today with the basic message being that things are on course for a rate hike come December. The market is hurting for a rate hike as it would show some confidence that the economy is at least growing a little bit. The market is no longer interested in zero rates as it represents weakness. Things, or should I say psychology, changes quite rapidly and thus we've gone from a market that wanted only zero rates to a market that wants slowly rising rates. It definitely doesn't want the beginning of a new, rate-hike cycle, but it does want a slow move upward. Fear will turn to confidence if Fed Yellen would only speak about raising rates in December. When she did say that the market said good.

It's not great, but it is good, since she's already so far behind the curve. The banks should do well with this news for a while, one would think. Fed Yellen also made it clear that there is no need to worry about any aggressive cycle of hikes. She knows there is no real strength in this economy, or the global economy for that matter. She'd rather not raise rates at all, but she knows the market wants it, and, thus, she really has no choice. Remember her real job title, which is 401K manager. If she could get away with it she wouldn't raise rates for years to come as she knows there is no real growth. But again, she's so far behind the curve she really has no choice. She seems ready to give in to raise number one of 25 BP's. The market, overall, did so, and should like this as it removes uncertainty as well as doing the right thing.

The market needs a strong close over 2075 to get rocking towards the old breakout level on the S&P 500 at 2134. A close a few points above is not convincing. I like a move of at least half a percent or 2085. One percent is even more convincing, but I'll take a half percent, and feel good about it as it gives room to back test and allows for some overbought unwinding. There are only two numbers that really matter to this market and they are S&P 500 2020, and the above mentioned 2075. A move to 2020 on a closing basis, with a bit of force, would be very bearish for the short- to possibly medium- or even longer-term. The move over 2075 as I mentioned, could lead to a move to the old highs, or even higher than that.

The fight is on. As I've said before, a move to new highs makes the most sense, since that would etch in stone a true negative divergence. Once that occurs, you then wait for the topping stick, and, hopefully, some distribution volume to confirm the top is on for the bull. But we don't need to worry about that now. Our only focus is to recognize what's taking place in the short-term and play it. There's nothing bearish yet, but there's also nothing truly safe, since those monthly index charts are so awful. Day to day with a keen eye on a strong close over 2075, being what the bulls are looking for and what the bears are dreading.

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