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 House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
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

Stock Market Positive Divergences...Market Wants Higher....Banks Atrocious....Fed Scary....

Stock-Markets / Stock Markets 2016 Feb 11, 2016 - 10:52 AM GMT

By: Jack_Steiman

Stock-Markets

The market is begging to move higher based on how far it has fallen in such a short period of time. Quite the intense move lower, but what makes it look so technically bullish short-term is the very powerful positive divergences that exist in many areas of the market. While the S&P 500 and Dow didn't make new lows you can see by the MACD's, if they had, they would have created massive, positive divergences. The Nasdaq has been lagging badly and did make a new low. That new low has the potential for a positive divergence to kick in. The divergence is nowhere near as powerful as those of the S&P 500 and Dow, but a divergence is a divergence, and the Nasdaq has one, smaller in size though it may be.


There were some statements made in Europe last night regarding defending Deutsche Bank AG, a critically important bank that has been getting killed lately, and then a rally ensued. This rally caused our futures to reverse up, with some real power behind it. We gapped up huge, but then came the reality of the Ms Yellen to interrupt with the good tidings that were taking place. The banks had been rocking up early on, and were responsible for carrying the market higher, but then came Janet Yellen to spoil the move in the banks on a dime. She was asked about the possibility of using negative rates here at home as we saw done in Japan.

While she didn't say yes to that possibility she also didn't say no. She left the door open, which implied how weak things are on the economic front. Banks don't like the prospect of lower rates, and so the selling began in earnest in that sector alone. They are heavily weighted and took the Dow and S&P 500 off their highs. Without the banks performing in the future, it's not easy to get excited about what those MACD positive divergences are capable of doing. Again, those divergences on the S&P 500 and Dow are large. Very large to be honest. The type of large that can bring about many weeks of upside action overall. Yellen took away what would have been an explosive up day for the market. That doesn't mean the market still can't play out at least some of those divergences allowing for decently higher prices in the next few weeks. Only time will tell us what's possible. Yellen is usually the person who rocks the market higher. Today she was the Grinch.

I think what's troubling the market deep down is the lack of confidence from Ms. Yellen. When you look at how our economy is falling with regards to manufacturing and services it's scary enough. The market would look past the numbers if the Yellen would speak in a way that said not to worry. If she would talk confidently about how she sees the economy is improving, and how rates can continue to rise without fear of hurting the economy, we would be rocking up. Keeping in mind, the market ALWAYS want to go higher, and if she showed confidence, the market would run with it. The problem is she's showing fear and anxiety. To even think about negative rates means she's uncertain. If she's uncertain so is the market. We can't know what she knows, so we look to her for signs. We have all learned to read her body language when she talks. Today that body language was one of nervousness. One of uncertainty. She's being honest which is good and necessary.

At least she's deflecting things and hoping things get better, so she can tell a better story later on down the road. She's just being honest and telling us that she's not excited about our economy, especially the global economy, and so things could worsen here at home. This likely puts a halt to anything wonderful for the market once and if those divergences play out to the up side. Try to keep in mind just how far and fast we fell. Normally, even in a bearish environment, you'd see some strong retrace back up. Market wants it, but we'll see how much we can get. The banks today painted a not so rosy picture, but even the banks can be dragged up some if those MACD's play out over the next few weeks, but they'll likely lag behind other stronger areas. Careful where you go if you decide to play long.

It's possible that we'll just meander around, back and forth, for some weeks, with an upward bias to work off the divergence and unwind daily and short-term oscillators. The environment couldn't be more difficult if it tried. So many opposing forces currently at work. Positive divergences versus poor banks. The need to unwind oscillators up versus bears getting more aggressive on rally attempts. Again, we should rally and rally hard, but we'll have to see the banks firm up in a big way before getting excited about a bigger rally with some staying power. Day to day as I try to figure out this nonsense.

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