Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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.


© 2005-2022 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