Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18
Stock Market Investing 2018 - “I Hope I’m Making a Bad Buy” - 11th Jan 18
S&P 500 Fluctuates As Stock Market May Be Topping, Or Not? - 11th Jan 18
SPECTRE Microprocessor Security Flaw - Big Brother = You - 11th Jan 18
7 Market Forecasts 2018 from the Brightest Financial Minds I Know - 11th Jan 18
It’s Not Enough to Be Contrarian - 11th Jan 18
Stocks That Take One for A Roller Coaster Ride Through the Thick And Thin Of Every Single Investment Made - 11th Jan 18
Police Arrest Tree Protester on Meersbrook Park Road, Sheffield - 10th Jan 18
Stock Market Aggressive Sell Signals - 10th Jan 18
The 2018 Decline in Precious Metals - 10th Jan 18
Gold Hits All-Time Highs Priced In Emerging Market Currencies - 10th Jan 18
TMV : 3X Leveraged Short on US Treasury Bonds - 10th Jan 18
Here are the Key Levels in Gold & Gold Miners - 10th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Stock Market Another Day In The Downtrend....7-Year Uptrend Line Gone For Now..

Stock-Markets / Stock Markets 2016 Jan 16, 2016 - 04:09 AM GMT

By: Jack_Steiman

Stock-Markets

We had a confluence of events come together this morning. Last night we had the usual bad action out of China, which naturally put some pressure on the global markets. Europe follows China and we follow Europe, thus, step one took place. Step two was the price of oil, which is definitely affecting the markets. Oil got crushed overnight and this too had an adverse effect on our futures. Lastly, and in my opinion, most importantly, we had a cascade of bad earnings reports from two key sectors in the market. In the world of semi-conductors, we saw Analog Devices, Inc. (ADI) warn on future guidance. They are a key supplier to Apple Inc. (AAPL), and this also verifies the reports coming in that AAPL is seeing a slowdown. Intel Corportation (INTC) joined in with the bad news as well.


They warned on future guidance, which saw the stock get crushed today. In the world of the financial stocks we saw bad news come out leaders Wells Fargo & Company (WFC) and Citigroup Inc. (C). Both stocks following the guidance trail lower. Both stocks hit very hard with the rest of the sector taken down in sympathy. These stocks are part of a theme since the earnings season began. We've seen Tractor Supply Company (TSCO) as well as CSX Corp. (CSX) tell the same story. They're everywhere, and what's even more interesting is that many companies are coming out ahead of their earnings date to let everyone know things aren't very good. Even if the past quarter was fine it's what they're saying about the future that has everyone disturbed. It's harder and harder to justify Disneyland.

Those ridiculous P/E's are finally taking a little hit. Markets never really care about froth or insane valuations. However, at times, the market has to reluctantly pay attention. It never wants to, and that is the truth, but every once in a while for a few months the market takes those bloated valuations down some. It never lasts all that long and eventually those Disneyland valuations will come back, but for a while, the market is making them pay a bit, and for those who haven't exited, the pain is fairly intense. So while today wasn't anything to get too upset about, it was as bad as yesterday, in fact worse, and yesterday gave the bulls a lot of hope. A big up day was taken back with an even larger down day today. No celebrating for those frustrated bulls this three-day weekend.

The market is dealing with incredibly oversold oscillators rarely seen. The question is whether it's ready to stay that oversold or bounce. The problem in terms of bouncing is what the bears have been able to do technically. Yesterday the market rallied hard, and back tested the S&P 500 1925 weekly uptrend line that has been in effect for seven years. We closed a couple of points below, but this still gave the bulls hope since the market was so deeply compressed at oversold. It was not to be, and the problem was just doubled. 1925 is trend-line resistance now, but you can now add in massive gap resistance at 1921. The bears made a statement with this gap down. It puts a wall between current price and 1925. Nothing is impossible for this market, especially when you're talking about a bullish scenario. That said, the market bears did something they haven't been able to do for nearly seven full years.

Lose the weekly uptrend line, and put a large open gap between current price and that 1925 level. Good work by the bears. Can they make it stick with the market so oversold. You'd think not, but we shall see if this gap actually somehow prevents a move back above. The technical damage is real. A very interesting thing to do with regards to making this trend line more difficult to take back. Very interesting work by the bears. The bulls have their work cut out for them no doubt. A tough job just became quite a bit more complicated. They'll need to find a catalyst to get the job done, and what they may be in this environment, is a mystery to me. The bears have done their first good work in seven years. Now they need to keep the door shut on 1925 S&P 500.

Leadership is basically gone. No matter where you look, whether at individual stocks or individual sectors, there's just no leadership. Technology stocks were the leaders, but even the fang stocks are getting hit harder now. Nothing too sever, but they are struggling more and more as time moves on. AAPL had more bad news from ADI today. That stock has seen a tremendous move lower. No real end in sight for now. It will bounce like everything else, but sustainable upside is not on the docket for now. Semiconductors, transports and just about everything else is in a down trend. I don't need to tell you how bad the world of commodities is. There's really nowhere to turn where you can hide your dollars.

The global stock markets aren't doing any better. It's not as if you will have a better experience if you trade out of the United States. This is a global situation and that makes it harder to have a good experience with equities. The real message being to keep things very light. Don't chase strength when you see it. We are very due for a strong bounce, but the loss of S&P 500 1925 with a strong gap down puts that in question. very interesting times for sure.

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.


© 2005-2018 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