Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
SPX/NDX/NAZ Hit New All-time Highs - 27th May 17
GBPUSD Top in Place, GOLD Price Ready to Rocket? - 27th May 17
Silver Mining Stocks Fundamentals - 27th May 17
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Stock Market Sentiment...Looking At The Technical World.....

Stock-Markets / Stock Markets 2016 Feb 20, 2016 - 04:27 AM GMT

By: Jack_Steiman

Stock-Markets

The market is showing some very interesting pattern set-ups on the daily index charts. The oscillators on the attempted pullback on those daily charts are holding nicely with many of the bear market stocks not showing a move lower on those oscillators as their price pulls back. A sign of many bear-market stocks bottoming? It could very well be, but that answer only comes with certainty when we experience the next strong down move. So far so good. Many stocks are in very deep bear markets, even though our indexes are not. Individual stocks from all over the stock-market world are experiencing some horrific moves lower. There are some signs based on positive divergences that this process may be in the very beginning stages of turning around.


Too early to be certain, but when you see daily chart positive divergences after a prolonged down trend, you have to take notice. When some of these rallied recently they mostly failed on their first test of the 20-day exponential moving average from underneath. When they sold a bit they found quick support at the gap just below. Those gaps created when the market rallied off the recent 1810 S&P 500 lows. A good sign to see the bulls fight at the first gap just below, which created some decent reversals off the lows today. A sign of hope. This market is extremely complicated, but I have to trust those positive divergences that live just about everywhere we look. When they are created they will normally last more than just one good bounce off the bottom.

There's usually some life to them and should last at least a month or so. It would be highly unusual for them to give one blast and be gone and done with. That's what you would experience from a short-term sixty-minute positive divergence. Daily ones should have some staying power, thus, my belief we should get to and exceed those daily, 50-day exponential moving averages before heading back down some. That means there should be more upside left. It doesn't have to be immediate, but down side should be somewhat limited now unless the unforeseen occurs overseas. let's hope short-term most of that is built in to the market. Interesting times as we discover where the market really wants to go short- and long-term. A time of great learning for us all.

Two weeks ago the updated number from the bull-bear spread was actually -14.5%. This past week was at -13.3%. Next week's number will probably read roughly -5-8%. Week after week now below zero, which tells me that the bears are really rocking in now, and, of course, too many bears equate to a market that wants higher simply due to strong, short-covering rallies. There doesn't have to be any great fundamental reason for a rally. Enough shorts in the market will accomplish that feat. If we look at things fundamentally you'd have a very hard time buying anything, but the market doesn't care about fundamentals, if the bears are loaded up, and apparently they are.

The other thing is if the fundamentals get a drop of good news out of the blue that should be enough of an excuse to get the bears running for cover. The bears aren't the gutsiest group of players. They cover on any fear that comes their way. Things are bad everywhere, so it's possible that good news just isn't out there, but if one pops up out of the blue they will cover quickly. Remember, though, that we don't need good news if there's too many bears. The market can rise without it, but any good news would really get them running. Sentiment is important only at extremes. Three consecutive minus readings are an extreme, and, thus, needs to be given the respect it deserves. It guarantee's nothing, but sure needs to be respected for its possibilities.

S&P 500 1940 is the 50-day exponential moving average. That's the number we'll be focusing on going forward. If the S&P 500 can cross above with a bit of force, then the market may be able to surprise a bit to the upside short-term. Critical support comes in at 1895/1898 gap, and also the 20-day exponential moving average at 1900, so the 1895 to 1900 is very important support for the bulls if they're ever going to get this over 1940. So now, it's really just a two percent game between 1900 and 1940. It's unclear who will win, but there's reason for hope short-term if you're a bull. Medium- to longer-term is still very much up in the air folks. We'll deal with that down the road as needed.

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