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Stock Market 1993 Or Bust.....

Stock-Markets / Stock Markets 2015 Dec 22, 2015 - 12:22 PM GMT

By: Jack_Steiman


We can spend forever talking about what the market will do. Will it break down or will it break out. What will be the catalyst, or will it not, and so on. Here is the bottom line folks. Until the bears can take away 1993 on the closing basis with a bit of force, the trend remains basically trend less, with a bullish bias, meaning just meandering. But the bears are unable to take control. Control is different than meandering. Since we're still in a bull market, to me, meandering within it is not bearish. It's only bearish when a critical level of support is removed in a fashion that suggests much lower prices. We have yet to see that on any level. We get that if we can push some volume in to a break down below 1993. To be completely blunt, losing 1993 on light volume would likely lead to a head fake down. When a market breaks one way or the other away from a trend that was in place prior, big money usually lets you know it's occurring.

It doesn't have to, so there are never any guarantee's but it almost always gives some type of hint that a trend change is about to take place. So yes, the market looks bad. So yes, it seems as if a breakdown is upon us shortly, but be aware of the danger of thinking something has to be anything because it doesn't. We've seen one save after the other for a very long time now. The onus is clearly on the bears to do something they just haven't been able to do. They start to get the job done, but they don't. It looks promising only to end in disappointment. So be open. Don't write the script. Follow it as it unfolds by understanding the level from which one trend changes to another. That level is 1993 on the S&P 500. Hopefully, if it does break, it does so in a convincing, higher volume fashion. If not, the unknown is still with us. Day to day.

If we were to draw a conclusion over what may occur, we may only have to look at stocks in general. The number of stocks trading below key, exponential moving averages. The number of stocks trading with their 20-day exponential moving average on the bottom, with the 50 in the middle and the 200's on the top, and all pointing in the wrong direction. So many stocks are trading in a bearish fashion it makes you wonder how the overall market price has not turned bearish. There aren't too many places left for the bulls to run to in terms of finding a bullish escape. Key sector after key sector is not looking very good. We know transports are brutal. Just brutal. We know that industrials are just about as bad. Semiconductors are better, but nothing to write home about. Biotech stocks about the same as the semiconductors. Not horrible, but living on the edge. Home builders are no fun. Technology is starting to crack badly.

Stocks like Apple Inc. (AAPL) are in bearish trends. Commodities are in big picture massive bear markets. Not many places left and this is what concerns me as well. We need to see better patterns, or at least some form of bottoming patterns, will begin to emerge to offer up hope that things will be getting better, and that the bulls still have a chance at coming out of this year long plus malaise. There has been no sustainable, upside action for quite some time now, and you can see the frustration in the numbers as the bull-bear spread is not far from zero now. Quite the change in perspective, and hope than what we saw six months back when we were near 505 on the spread. The bulls need to see some changes in those patterns soon, or all hope will be lost. They are hanging by a thread, but still hanging. For now!

If we do lose 1993 with force, and, hopefully, some volume then we can start to look at two key levels below that need to catch or a bear market is likely upon us. You want to see strong gap support at S&P 500 1951 hold, because, if it doesn't, we're likely to see a double bottom at 1892. If we see 1892 the likelihood of making new highs over 2134 becomes remote at best. The bears will get braver as each level of support disappears from view. The only good news being if we do visit 1892 we're also likely to see an inverted bull-bear spread which may alleviate the bear from getting out of hand. Below 1892, and it gets really nasty, but we need to speak about that at this moment in time. For now, we focus on the number one level all are watching. That level being 1993 on the S&P 500. Above that the trend is still, theoretically higher. See the move and adapt. Until then play what you see.

A meandering, mindless market to nowhere. No one on control.



Jack Steiman is author of ( ). Former columnist for, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

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© 2015

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.

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