Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17
Global Currency Reserve At Risk - 14th Jul 17
Picking Great Gold Stocks - 14th Jul 17
BBC Tree Expert's Verdict on Sheffield Amey / Labour City Council Tree Felling's - 14th Jul 17
SPX Cycles, Fed Funds and Gold - 14th Jul 17
Should Platinum Be More Expensive Than Gold? - 14th Jul 17
What's Next for US Dollar, Stocks, Bonds and Gold? - 13th Jul 17
India Gold Imports Surge To 5 Year High – 220 Tons In May Alone - 13th Jul 17
Gold and Silver: Your Stomach Is Probably Wrenching Right Now - 13th Jul 17
Gold Industry Is In A Deep State Of Dysfunction, Delusion And Denial - 13th Jul 17
Cryptocurrency Bloodbath! Sell Everything We Were Totally Wrong! - 12th Jul 17
Gold to Silver Ratio - Preparing for THE Bottom - 12th Jul 17
Iran and North Korea: Brothers in Nuclear Arms - 12th Jul 17
Down Dollar Down: Time for "UP"? - 12th Jul 17
Most Tech People Are Too Young To Remember That Silicon Valley Hasn’t Had A Real Crisis In 17 Years - 11th Jul 17
Stock Market Rally May be Over - 11th Jul 17
Silver Price Plunge Is Nearing Completion - 11th Jul 17
Soaring Global Demand for Lithium Presents Triple-Digit Profit Scenario - 11th Jul 17
Gold Price Outlook Increasingly Bullish - 11th Jul 17
Sheffield Street Tree Protestors / Campaigners vs Amey Labour City Council 2017 - 11th Jul 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Finally, Some Stock Market Buying....What Is It Telling Us?......Scenarios Discussed...

Stock-Markets / Stock Markets 2016 Jan 23, 2016 - 04:53 PM GMT

By: Jack_Steiman

Stock-Markets

What's unique about the stock market is its unpredictable nature. We're always trying to understand the message being sent through the oscillators along with price action. What is it saying! It can be very confusing and always emotional. Is it only a correction within a bigger picture bull market that's still on going? Is this a counter-trend rally that will fail on a weekly basis below the uptrend line at 1935? Will it head fake well above 1935 only to close back below on a weekly basis? It's really hard to know what's taking place when the move off then top has never shown classic bear-market distribution on any of the key daily index charts.


If it had shown distribution I would be fairly certain that this is just a counter-trend rally. Since I never did see anything off tops related to big money selling I am cautious to say we're in a definite bear market. I think the odds are strong that we are in a bear, but by no means am I 100% sure. I will need to be convinced by seeing the bears say you cannot cross above 1935 on a closing basis at the end of any given Friday. In fact, show me that you can keep things from really ever getting above that trend line. Maybe a brief intraday breach, but nothing more than that. It has been seven years so the onus remains on the bears to keep the door shut with regards to that seven year up trend line.

Looking at today's action is interesting. We saw futures ramp over night as European and Asian markets simply exploded from oversold situations. We followed along and blasted up as one would expect. The market flowed higher all day. No real selling episodes whatsoever. The bulls had their way with things from the opening bell. We see counter trend, powerful rallies all the time so this is not unusual. The question is whether this can continue on for some weeks and it seems to me it should. The daily oscillators are so deeply compressed down it would make sense for the bulls to have control for a few weeks.

Not every day, but overall. It's not impossible that the market can stay crazy oversold since we were overbought for so long, but that's just not the way markets work. They almost always trend higher so the natural thinking is that we'll rally further before trying to fall once again, and we should do that. It'll be the next selling episode over time that will be more interesting than not. My one big concern for the bulls being the action in the banks which continues to be downright awful. Even today it wasn't anything to get excited about.

After we clear 1921 there's the 1935 uptrend line, and then the 20-day exponential moving average at 1945 on the daily chart. By the time it would get there the 20's may come down near 1940 with the uptrend line also approaching 1940. The 1940 level roughly a week from now will be the key to this whole mess. If we just blow through it with force and get near the next gap at 1985 we probably only experienced a correction in an ongoing bull market as hard as that may be to believe. Never tell yourself there's only one experience to come. Never be permanent in your thinking what the outcome has to be.

While a bear market seems right based on the monthly charts, and a slowing global environment not to mention ridiculous valuations, the bull could still rage on. Doesn't seem appropriate, nor likely, but it is definitely possible. We must see the uptrend line hold and then another huge move down. That would be the confirmation. For now, it seems the market is done with heavy down side action for a while to come un less there's something unforeseen from China. It should be rest time. Watching how high we go and how the oscillators react is all that matters.

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.


© 2005-2017 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