Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16
Vauxhall Zafira Fires - Second Recall Issued - Inspection Before Bursting into Flames? - 21st Aug 16
Will the Stock Market Bubble Pop Regardless if the FED Never Raises Rates? - 21st Aug 16
US Government Spending - 3 Big Stories Not Being Covered – Part III - 21st Aug 16
Silver Analysis - 20th Aug 16
SPX New Highs, Correction Next? - 20th Aug 16
Housing Bubble - The Marginal Buyer Holds The Pin That Pops Every Asset Bubble - 20th Aug 16
Gold Miners Q2 2016 Fundamentals - 19th Aug 16
Which Price Ratio Matters Most in a Fiat Ponzi? - 19th Aug 16
Big Policies, Bigger Failures - 19th Aug 16
Higher Crude Oil’s Prices and USD/CAD - 19th Aug 16
Here’s Why You Should Look for Dividend Stocks and How - 19th Aug 16
Deglobalization Already Underway — 4 Technologies That Will Speed It Up - 19th Aug 16
These 6 Charts Show Why the Average American Is Fed Up - 18th Aug 16
SPX Easing Lower - 18th Aug 16
Low / Negative Interst Rate’s Legacy - 18th Aug 16
The 45th Anniversary of The Most Destructive Event In Modern Monetary History - 18th Aug 16
USDU - An Important Perspective on the US Dollar - 17th Aug 16
SPX Completes Wave 1 Decline - 17th Aug 16
How to Quickly Spot Common Fibonacci Ratios on a Chart - 17th Aug 16
When Does a Forecast Become a Trade? - 17th Aug 16
Kondratiev Wave - The Financial Winter Is Nearing! - 17th Aug 16
Learn "The 4 Best Elliott Waves to Trade -- and How to Trade Them" - 16th Aug 16
Stock Market Bears Turning Bullish At New All Time Highs - Time to Get Worried? - 15th Aug 16
Job Seekers Sacrificed to the Inflation Gods - 15th Aug 16
A Look At Commodities and Financial Markets Trading Week Ahead - 15th Aug 16
Stock Market New Top Forming? - 15th Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

How to Trade Elliott Waves

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