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
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
BBC Inside Out Tesco Rip off Offers - Determined to Lose Big Spend Customers! - 13th Feb 17
Is the UK An Economy Built on Debt? - 13th Feb 17
Stock Market VIX Cycles set to Explode in March/April 2017 – Part 2 - 13th Feb 17
Stocks At Record Highs - Will Uptrend Accelerate? - 13th Feb 17
US Dollar: 'Rumors of My Death are Greatly Exaggerated' - 13th Feb 17
Is This The Top Commodity Play For 2017? - 13th Feb 17
Trump a New Jacksonian Era? - 13th Feb 17
Stock Market at High Tide - 13th Feb 17
Channel 4 War on 'Fake News' Ends - The New News Age - 12th Feb 17
Uptrend in Silver (XAG/USD) Continues to Strengthen - 11th Feb 17
Greece Debt Crisis Outrageous Malevolence - 11th Feb 17
SPX Stock Market 1-year Anniversary New Highs - 11th Feb 17
Gold and Gold Stocks Hit Upside Targets. Now What? - 11th Feb 17
Moving Stock Market Targets: Investors Need to Discriminate! - 11th Feb 17
Sheffield Trees Felling Crisis, Police Dawn Raids and Arrest, Amey £2bn PFI - 11th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

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.


© 2005-2016 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