Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
The Best Reasons to Buy Gold in the Age of Trump - 22nd Feb 17
Silver, The Return of Stagflation - 22nd Feb 17
Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - 22nd Feb 17
Gold: Short End US Rates Matter More Than Long End Real Yields - 22nd Feb 17
CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry - 22nd Feb 17
Here’s Proof Rising Rates Are Good for Gold - 21st Feb 17
Gold and Silver Weekly Update - 21st Feb 17
US Dollar and Gold Battle of the Cycles - 21st Feb 17
NSA and CIA is the Enemy of the People - 21st Feb 17
Big Moves in the World Stock Markets - Big Bases - 21st Feb 17
Stock Market Uptrend Continues - 21st Feb 17
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17
Gold Stock Volume Divergence - 17th Feb 17
Gold, Silver, US Dollar Cycles - 17th Feb 17
Inflation Spikes in 2017, Supporting Gold Prices Despite Increased Odds of March Rate Hike - 17th Feb 17
Roses Are Red... and So's Been EURUSD's Trend - 17th Feb 17
Gold Trade Note Sighted - 17th Feb 17
Gold Is Undervalued Say Leading Fund Managers - 17th Feb 17
NSA, CIA, FBI, Media Establishment 'Deep State' War Against Emerging 'Trump State' - 16th Feb 17
Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson - 16th Feb 17
Maps That Show The US’ Strategy In Asia-Pacific - 15th Feb 17
The Trump Stock Market Rally Is Just Getting Started! - 15th Feb 17
Tesco Crisis - Fake Prices, Brexit Inflation Tsunami to Send Food Prices Soaring 10% 2017 - 15th Feb 17
Stock Market Indexes Appear Ready to Roll Over - 15th Feb 17
Gold Bull Market? Or was 2016 Just a Gold Bug Mirage? - 15th Feb 17
Here’s How Germany Buys Time From China - 15th Feb 17
The Stock Trader’s Actionable Guide to Trump - 15th Feb 17
Trump A New Jacksonian Era? The Fourth Turning (2) - 14th Feb 17
Stock Market Yet Another Wall Street 'Witch's Brew' - 14th Feb 17
This Is Why You Don’t Own A Lot Of Stocks - 14th Feb 17
Proposed Tax Reforms Face Enormous Headwinds - 14th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Stock Market Rally Dies....1925 The Bull/Bear Line.....Slight Close Below....

Stock-Markets / Stock Markets 2016 Jan 09, 2016 - 06:05 PM GMT

By: Jack_Steiman

Stock-Markets

After 1,200 points down on the Dow over six trading days it made sense for the market to try and rally hard for a few days since the short- and long-term charts, or the 60 minute and daily charts, were oversold. 30 RSI on the daily index charts is where this market has blasted off from. It did hit 20 RSI on the last nasty plunge a few months back, but this bull market has laughed at the bears when it gets anywhere near 30 RSI on the daily charts except that one time. So what could be the solid catalyst for this rally was the question folks were asking.


Most felt there didn't need to be a catalyst other than 30 RSI. Some good news would be a huge help. First came China when it rocked up two percent last night. That alone should have been more than good enough. In fact, the futures did ramp up nicely. Over 20 S&P 500 points. That wasn't the end of the good news.

The jobs report came in shockingly high, which was much better than expected. The S&P 500 futures jumped another ten points. The market was ready for a big day. The bulls would be celebrating as the S&P 500 was about to bounce back up and further away from key support, to be discussed later in this article. We gapped up huge and that was it. It was downhill all the rest of the way. Nothing terrible, but the thirty-point up swing went into the toilet. Surprising, to say the least, and a major change of trend to what the bulls have gotten used for nearly seven full years. There have been lots of changes lately that we're not used to in terms of this bull, and, thus, maybe we should all take notice. The market has been frustrating the bulls for over a year now, but it has done so by moving laterally. Now we're starting to trend down. The frustration after today has to be ramping higher for the bulls. This was their day, but it didn't materialize. Maybe Monday. Maybe, if we get another strong session out of China the bulls will get their day and based on oversold they are due. We shall see if they get what they're hoping for Monday morning. That said, today was a total disappointment.

You will see the S&P 500 weekly chart this evening. It's self-explanatory. The seven-year up trend line on the weekly chart has been tested numerous times only to see the market launch higher. The question being will it be different this time or not. No one knows for sure. It seemed as though the end was at hand many times, only to see the market fool the bears. Relieved bulls always gaining the upper hand on price. So here we are again. Very close to the trend line at 1925. We closed at 1922, but that's not a breakdown. There are changes in this test different than what we've seen in the past. More and more stocks are trading in bear mode by far. More and more sectors are broken than before. Moving averages are crossed badly, but now only beginning to do so, and those monthly charts have had a chance to flash deeper, negative divergences with each new high. None of this guarantee's a strong move lower below this key trend line level of 1925. It's so easy to get bearish thinking it has to happen. It doesn't have to happen, but the odds are at least far higher for success than we've seen before. The bears certainly have the right to be more hopeful, but they know hope doesn't get the job done.

It's always about price and volume on the break of price that's so critical to the short to mid-term direction of this market. Study the chart. Recognize the difference on both sides of that trend line. You would think the bulls would fight hard to keep it up. And they will, but there's only so much they can do if big money wants this market to go away. It's unusual to see big money not blast this market up with so much good news today, so maybe they're no longer interested in doing so. We are close, and it's quite unusual to see this market lose 1925 on an intraday basis. That type of important support break is usually, if not just about always, happens with a large gap below. Will China afford the bears that opportunity this weekend? Maybe. Maybe not. Maybe it has to be something else no one sees, since so much attention is being paid to China now. We're going to find out soon enough folks.

Next week is going to be more than interesting.

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!

© 2016 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.


© 2005-2016 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

Catching a Falling Financial Knife