Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Finally .25... Bullish Statement.... Gradual.... Bull-Bear At 8%....

Stock-Markets / Stock Markets 2015 Dec 17, 2015 - 11:53 AM GMT

By: Jack_Steiman

Stock-Markets

The world has waited for years it seems for that first rate hike, since the economy was supposedly improving. Month after month, and report after report, for well over a year the market couldn't decide whether Fed Yellen would finally raise rates that quarter of a percent. You would think it would be slam dunk if things were rosy, but we all knew they really weren't, so she refused to raise. ISM Manufacturing Report is in decline. Services going the wrong way as well. It's hard to raise rates when the economy can't get out of its own way. The pressure kept mounting, however, as the Yellen knew the street wanted to see some confidence, since she kept saying that things were getting better. She finally did the dirty deed this afternoon. I'm sure she feels mixed, since we are contracting on manufacturing. It's truly unheard of to raise rates, even though they were at zero, in a declining economy. The key to the whole thing was the statement after the raise.


She said that the Fed would be very careful about raising any further, until she saw that the economy could get the job done in a more powerful fashion. That was what the market wanted to hear and they got it. It didn't mean that the market would blast out, but it's definitely what the market wanted to hear. A rate hike, but no longer-term rate-hike cycle in this economy. The deed is done Now the market can trade as it needs to. It's intentions over the coming weeks no longer affected by outside forces. She'll go away quietly now. The market will do what it needs to. Simple as that. No more rate hike nonsense. No more will she or won't she. No more uncertainty. That's always the markets biggest headache. Uncertainty is no longer a headache. Now we get the truth. Finally! Now we can break out or break down. Whatever happens we know the market isn't waiting on any further news. The market got its rate hike it wanted so badly. Now what!! We'll know for sure soon enough.

Bigger picture the Fed has other problems. A rate hike of .25 is nothing to really even talk about. What she has to deal with big picture is the contraction that's going on here at home in manufacturing. Services is slowing as well, but the move below 50 on the ISM Manufacturing Report is her biggest problem since it indicates things really aren't improving despite her efforts on two different fronts. Zero rates and QE just haven't gotten the economy to turn up. In fact, it is turning lower with no end on the horizon for now. Since her real job is 401K manager she has to figure out ways to get the market higher by improving economic conditions. Since her two best weapons haven't worked she must try to figure out yet another way to get the dirty deed done.

She has been unsuccessful since she came in to office, so what's a Fed Governor to do who seems to have run out of bullets? More QE? Please say nay. She can't be that vapid. She needs a plan to get folks to spend. The Jack Steiman plan would be to send checks to the public instead of feeding the banks where no one uses it. People will spend because that's what people do, but they need a catalyst. A check of significance in the mail to everyone would be better than cash sitting in the banks. That's what I would suggest. It won't happen, but that would be the best solution in my humblest of opinions. The real question becomes what can she do if she refuses to take that approach. I'm afraid she doesn't know. We shall see won't we!

Last week saw the markets take a nearly 4.5% move lower. The S&P 500 was near 2100 down to 2008. The bull-bear spread took a nice hit low going from 17% to 8.2% this week. We are definitely not concerned about froth being a problem here for a very long time to come. Possibly years. The nine percent move lower comes as a surprise but if you think about it more intensely you can understand it. The market has gone nowhere this entire calendar year and as market fail to rise we slowly, but very surely see the bulls give up hope. They were used to getting instant gratification for many years, but now have run in to a twelve month plus brick wall. The longer it goes on the harder it is on their collective psyche. Last week saw the bulls really give it up as the biggest part of the drop was 7% on the bulls to agnostic side or the bulls to outright bearish side. Bears only rose 2% total, but the bulls really gave it up!!! Interesting for sure as we're seeing the tipping point. Any deeper move lower will take us in to the negative column very quickly, since the bulls are already hurting psychologically.

The S&P 500 broke out above all its exponential moving averages today. That's good news for the market, since the cluster of all three key averages made it difficult for sure. The 20, 50 and 200 exponential moving averages were within nine points of each other. That is very tough for the bulls to penetrate, but that's what they did, so the news is good short-term, at least for the bulls, unless we get a real surprise reversal that sticks. There's always pullback's, but a reversal that sticks would be a surprise. 2104 is next up followed by 2116 and finally 2134. Who knows how high this goes, but simply follow the resistance and support levels for guidance. 1993 is long term support. 2043 is first big support. The lowest exponential moving average or the 200-day. Enjoy this for what it is. Above 2043 and we're fine. Below it a worry. Above 2104 we rock to 2116. Day to day.

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