Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

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.


© 2005-2019 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