Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Fed Message.....Global Economy Stinks!!!!...

Stock-Markets / Stock Markets 2016 Jan 28, 2016 - 10:48 AM GMT

By: Jack_Steiman


Fed Yellen made herself known to the world today by saying that she would keep the rates at 0.25 percent, for now, because she wanted to watch how things go globally on the economic front. That's what she said. What she didn't say, but clearly implied, was that the global economic situation is worsening far worse than I had envisioned. I blew it big time, and I don't know what to do. Someone help me as we're toast. She might raise 4 times, but it'll take many, many years for that to happen. She wanted to please the markets a month ago, so she raised a quarter, and said she'll keep raising in the hope the global situation would correct itself. It didn't! It worsened and worsened hard. She's stuck, and she knows it, and doesn't have a clue as to how to right her wrongs. Wrongs she continued after Bernanke blew it, and Greenspan blew it before them. No one worse than Greenspan.

Yellen told everyone things stink, and, thus, after opening and immediate going to the downside, reversing to solid gains, it reversed again after the Fed announcement, and made lower lows. It did hold the last vestige of hope at S&P 500 1869, or the gap up still in place, so that's the number we need to watch closely because once that's lost the market is in short-term trouble, oversold or not. When your Fed Governor tells you things are bad, you listen. When she leaves the Disneyland dream behind you should take notice. She told everyone there is no more Disneyland available for us any longer. Don't worry folks, it'll return some day, and sooner than you think, but, for now, it's on an extended vacation. The Fed blinked today. The market didn't like it. No death sentence yet as 1869 held, but you can't like the message sent from the almighty leader of our 401K's. She blinked and blinked hard. Not good!

What's really interesting is that intraday we took out the recent high in the bull flag off the bottom at 1909. All systems go in a normal market environment. This is not a normal environment, but it was surprising to see that break above fail with such ease. Without even the slightest bit of a fight from the tiring bulls. You have to wonder what the average, always-bullish person is now thinking about the market, and if maybe they'll soon stop chasing moves down, and, thus, stop the process of buying weakness for which they've become so accustomed. How many failures are they willing to take, I wonder.

If they stop chasing, then the job gets that much easier for the bears in terms of taking the market down without a fight. Stock after stock fails miserably on back tests of those lost 20-day exponential moving averages, and since those 20's are now the lowest average due to moving average bearish crosses, the bears are having their way with things. The 50's are above the 20's and the 200's are above the 50's, and that's never good for the bullish case. Stock after stock is getting hammered once they back test. The list literally hundreds long. Probably thousands. Today was a real failure for the bulls even though they held the 1869 gap. Things looked promising. They didn't end that way.

The biggest problem other than the Fed facing this market is the continued poor action coming from the world of earnings. There are always some good ones out there, and some are being graced some mercy due to their falling so much ahead of their reports but overall the news out of earnings land is bad. Apple Inc. (AAPL) and The Boeing Company (BA), two giant market leaders, were just crushed today on their weakening reports. So much bad news coming from these leaders, and not just from their reports on the last quarter, but, more importantly, on the guidance going forward. Looking out ahead to the next quarter or the entire year is not very promising. Some amazing lowering of guidance. They don't like what they see at all. If you're high beta and/or a high P/E stock, it's look out below if you don't completely blow out the numbers and guide upward.

I never want to hold a stock in to earnings, even in a bull market let alone this type of market. The risk is so amazingly high now. Why put yourself through that type of risk? Makes little to no sense to me whatsoever. Now, more than ever, you need to be smart and appropriate. You need to stay ahead of the game by not taking on any unnecessary and needless risk. Be smart and wait for this all to pass in time and it will. For now, we watch 1869 and see if the bulls can hold the line. A huge night of earnings is ahead of us so the focus will be there for the bulls and bears alike. Texas Instruments Inc. (TXN), QUALCOMM Incorporated (QCOM), Facebook, Inc. (FB), and eBay Inc. (EBAY) head the lineup, but there are many others from Tractor Supply Company (TSCO) to Vertex Pharmaceuticals Incorporated (VRTX). A very interesting night ahead. Be careful folks. The road is a dangerous one for now.


Jack Steiman is author of ( ). Former columnist for, 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!

© 2016

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 - 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