Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
Gold and Silver Bullion Buying Opportunity for 2017? - 4th Dec 16
First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - 3rd Dec 16
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16
Referendum Puts Italy's Government to the Test - 30th Nov 16
Why We Haven’t Seen Gold Price Rally after Trump Victory - 30th Nov 16
Breakdown and Slide in Crude Oil Price - 30th Nov 16
A 'Wicked Rally' in Gold Price Predicted - 30th Nov 16
Silver Market Sentiment Looks Golden - 30th Nov 16
Indian Demonetization Denotes Severe Stress in the Global Gold Market - 30th Nov 16
Owning Gold and Silver in Troubling Times - 29th Nov 16
Trump's Presidency - Stock Market Crash or Start of New Mega-Trends - 29th Nov 16
Prime Minister Modi's War Against Corruption, Black Money and Fake Currency Notes in India - 29th Nov 16
Can President Trump Really Drain the Swamp? - 29th Nov 16
President Trump’s Economic Plan Isn’t Going to Work - 29th Nov 16
The US Bond Bear Market Has Begun! - 29th Nov 16
Simple Yet Powerful Technical Trading Tools - 28th Nov 16
Public Infrastructure – Welcome to the World of Waste, Fraud, and Abuse - 28th Nov 16
Fifty Years Later, Moore's Computing Law Holds - 28th Nov 16
An Elusive Stock Market Top - 28th Nov 16
This Past Week in Gold - 27th Nov 16
Italian Bank Collapse European Sovereign Bond Carnage, Criss-Crossed Fuses & Lit Bonfire - 27th Nov 16
How to Beat UK Savings Crisis with Child Junior Cash ISA, Pension's and Life-time ISA - 27th Nov 16
Castro Was Not Who You Thought He Was - 27th Nov 16
Understanding the Trump Presidency , Beyond Merkel - 26th Nov 16
US Stocks Bull Market New All Time Highs - 26th Nov 16
Silver Mining Stocks Q3 2016 Fundamentals - 26th Nov 16
MSM's Stock Market Druck'n Suck-In Continues - 26th Nov 16
Gold Price Down 13.5% In 13 Days - Opportunity For Geometric Price Cost Averaging - 26th Nov 16
Tips for Trading Options with Elliott Waves - 26th Nov 16
Germany Pulls the Plug on Market Oracle site for 24 hours, German Election BrExit GerExit Warning Shot? - 26th Nov 16
New NS&I 2.2% Savings Bond Ahead of 2017 Stealth Inflation Theft of Purchasing Power - 24th Nov 16
Establishment Controlled Mainstream Media Launches War on Alternative 'Fake' News - 24th Nov 16
Black Friday Cheap Christmas Lights, How Long do they Last ? B&M Stores Review Video - 24th Nov 16
War On Cash Goes Global – India and Citibank In Australia - 24th Nov 16
Stocks, the Politically-Driven S.O.D. to Lose Again - 24th Nov 16
One of the best buying opportunities in history? - 24th Nov 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

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