Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Earth Overshoot Day - Human Population Growth - 28th Apr 17
Misunderstanding GDXJ: Why It’s Actually Great News For Junior Miners - 28th Apr 17
What Makes Bitcoin Casinos So Remarkable? - 28th Apr 17
Financial Markets Improvised Explosives - 27th Apr 17
More Stock Market Short-Term Uncertainty As Stocks Get Close To Record High - 27th Apr 17
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

More Economic Problems...Jobs...Nasdaq Breaking Down...

Stock-Markets / Stock Markets 2016 Feb 06, 2016 - 04:03 PM GMT

By: Jack_Steiman

Stock-Markets

The market has had every excuse to use economic woes as a reason to fall hard this past week. Poor numbers from the ISM Manufacturing sector, and then a hard decline in the ISM services sector. The market refused to fall, but it was somewhat understandable since the market had taken a massive hit lower and was simply trying to unwind oversold oscillators. The bear flag, if you will, that we have been seeing on all the daily index charts. Today was day fifteen, or exactly three weeks, but it seems as if the fifteenth day was the bad one for the bulls as the market could not withstand the Jobs Report, which came in 34,000 jobs shy of expectations. 151K versus 185K expected. The futures fell initially, only to come roaring back to green for a few seconds ahead of the open. It then began to fall, and, thus, we actually gapped down across the board with the Nasdaq taking the biggest hit. The market tried a few times to come back, but it seemed as if all attempts to rally were sheared off by the bears. They seemed angry today. Enough of these flags seemed to be their mantra for the day, especially in the world of high P/E stocks.


They've played second fiddle to the bulls for a very long time, but have begun to make progress in terms of taking over the primary trend the bulls held for the better part of seven years. The market has held up well considering the global economic situation, even though it was oversold. It could have gotten more so, but seemed alright with just hanging around no matter how bad the news got. Today was sort of that last hope gone away scenario. Most of the important earnings reports are over and too many weren't good enough. With manufacturing and services on the decline that too took away a lot of hope. The Jobs Report seemed to be the icing on the cake. The last straw. Whatever you want to call it, but the market said enough and down she went. Not a crash. Not the end of the world, but more of the bears taking over the landscape from the bulls. It hasn't been and won't be easy, but they are getting things to go their way more frequently now. A true change of the seven-year trend prior. Of course, maybe we should say six years since last year was the churn year where we were down a drop. Any way you slice it, today was not a good day for the bulls as the bears continued their progression to taking things over slowly, but quite surely.

When trying to understand a markets message the best place to look is at froth or the Nasdaq. This is the land of the greatest and most outrageously over valued stocks. You know the story there. In bull markets folks love beta and froth and thus they run to these stocks at every chance. The Nasdaq is the leader no matter what market you're in. When things are good, it well out performs the rest of the market. However, when things are bad it also out performs, but to the down side as those froth stocks get totally taken out and crushed. We have seen the Nasdaq struggle the most even in the current bear flags. Unable to get to moving average or above them the way the Dow and S&P 500 have been able to. So when today's bad Jobs Report hit we immediately saw the Nasdaq lead lower as the fang stocks once again led lower. Add in the reports on earnings from Data and LinkedIn Corporation (LNKD) and things really took off down in comparison to the rest of the market. The lesson on holding stocks in to their earnings reports showing its ugly side today. Some complete Nasdaq stock annihilation. As long as the market is led down by the Nasdaq stocks you can expect the trend lower overall to continue. There will be days when the Nasdaq leads up, but that will be mostly from oversold bounces. The key is a trend, not a day or two. For now, the market has no thirst for anything related to froth or high P/E's. Follow the markets message and you'll survive.

Markets rarely, if ever, crash or fall apart in a moment. Too much in terms of protection out there from all sorts of places from Government intervention to Fed intervention. In fact, most crash days turn out well. You get massive moves back up the same day as everyone who can help out comes to the rescue. Bear markets or down trending markets are usually slow and methodical with the occasional swoon over a few week's period, such as we just saw in January. Most bear markets only have a few or a couple of these types of events. Most of the time is spent moving up and down with a small trend towards lower. The big two or three legs are the crux of the bear in terms of points lost. That happens only over a couple or a few months time. If a bear were to last a year you'd see the worst of it in a very small window of time. Bear markets are often very hopeful for the bulls only to see them get frustrated as sustainable upside is hard to come by. The worst thing for the bulls is the bear-market rallies that last a while as their guard comes down only to get hurt again when the bear reasserts itself. If we lose S&P 500 1869 we then focus bigger picture at 1812, or the most recent lows from the January down trend. 1946 remains important resistance. Day to day with the trend clearly lower but don't forget lots of up days in between.

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