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
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Odds Favoring the Stock Market Bears This Time

Stock-Markets / Stock Markets 2016 Jan 10, 2016 - 03:55 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. After all, the daily charts were oversold with a 30 RSI, a number from which the indices have typically blasted off during sell-offs in this bull market.

Plus, the market got some good news out of China, which blasted up 2 percent overnight. Then came the jobs report, which was shockingly high. S&P 500 futures were already up, and jumped another 10 points on the news, as the market appeared ready for a big day.


We gapped up huge and that was it, downhill all the rest of the way. Nothing terrible, but the 30-point upswing 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.

The S&P 500 is very close to the trendline at 1925. For 7 years, this up trend line on the weekly S&P 500 chart has been tested numerous times only to see the market launch higher. Will it be different this time? The S&P 500 closed at 1922, which is not a breakdown. However, this test is 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. Moving averages are crossed badly, and those monthly charts have had a chance to flash deeper, negative divergences with each new high. None of this guarantees a strong move lower below this key trend line level of 1925. But the odds are at least far higher than we've seen before.

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. It is quite unusual to see this market lose 1925 on an intraday basis. That type of important support break usually, if not just about always, results in 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.


© 2005-2022 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